How To Make Your Resort SPA Profitable

By. Judy Singer 20th May 2002

My name is Judy Singer and I, along with my business partner, Patty Monteson, am the owner of Health Fitness Dynamics, Inc. (HFD). HFD is a nineteen year old spa consulting company, based in Pompano Beach, Florida, specializing in planning, marketing and managing health spas for fine hotels, resorts, mixed-use developments and day spas. Since 1983, HFD has completed over $600 million of completed spa development. In addition to our turn-key spa consulting services, we also conduct a lot of economic and consumer research as well as write articles on all facets of how to create and operate marketable and profitable spa facilities and programs. If you are interested in reading any of this information, look at our web-site

During this session , I want to give you an overview of the eleven factors that need to be considered if you want your resort spa to be a viable business. For those of you who have a day spa with no lodging component, I anticipate that there will be valuable and pertinent information in this presentation since many resort spas offer a day spa experience to the local community.


The market should drive your decision on whether or not to have a spa and what kind of spa you should have. Everything you do needs to be market-driven, you need to understand and serve the people who you expect to visit your spa.

Know Your Market: You need to know your market and develop a concept, facility, program and service standard that they will want and appreciate. If you do not know your clientele, there is no way to give them what they expect and deserve.

Depending on where your resort spa is located, the following are the potential markets:

  • – Local Market: this could be day guests or members from the community
  • – Resort Market: this could be the leisure guests, conference guests, companions of conference guests, niche markets and affinity groups

Know Your Competition: Once you know your guest profile and what they want, make sure you can deliver it and that none of the competitive resorts offer what you do. You need to be different and better. You can not be a “copy cat”…you need to have your own unique selling points and personality.


The concept is your vision and the foundation of everything you do in order to capture and please your market. There are five main focal points in developing your concept:

Be Unique: You can not be a “me too.” There is a careful balance between being unique and being so unique that you limit your market. Points of uniqueness could be the services, products, facilities, guest clothing, price point, etc.. Your uniqueness should create curiosity and demand so that you get people in the door. What you do to get them to return is another key element to your success.

Be Consistent: Know your concept and be true to it. Share it with your guests and staff. Everything you do should reflect the concept.

Make It PR Worthy: Magazines should want to feature and/or write about you. Let the media tell your story. This is a more credible and marketable strategy than placing ads.

Be a Leader: Stay one step ahead by offering new products and treatments. Don’t get lost in the crowd by being good. Excel in every way.


Whenever we read about a spa, the selling points almost always focus on the size, number of treatment rooms and cost. There are, however, several other important features that are the media may not mention but that are critical to an operationally efficient, comfortable, marketable and profitable facility.

Consistent with the Concept: The facility and design must reflect the concept. If you have a tropical spa, the design elements, lighting, foliage, etc. should connote this feeling.

Efficient Flow: The flow should help you control payroll as well as be stress free for guests.

Balance between Profit Zones, Comfort Zones and Back-of-House: How you allocate your space can affect your success. The spa needs to make money with treatments and retail. There needs to be enough social and private comfort areas where people can stay and relax. In order to run a business, you need to have the functional areas like offices, workstations, etc.

Create Experience: One area that warrants special attention is the wet facility area. This is one of the most expensive areas in the spa. We need to re-examine what is put in this area and whether it should be an experience worth paying for or a loss-leader. We think there will be more emphasis on the former.

Design with Flexibility: The facility should allow for growth and development. Think of your expansion plan during the initial planning stages so that you do not compromise the efficient flow. It’s hard to predict the future, but think long-term, e.g., will you operate everything in-house, will you lease out some space to complementary resource people, etc.


People typically go to a spa because they want to take a treatment, although the treatment is the medium to help them relax, get rid of stress, feel pampered, etc. There are some key factors to consider:

Consistent with Concept: Treatments and products must be in line with the concept

Competitive Pricing: Look at what everyone else is charging, the length of the treatments, the overall experience, etc. then determine what you should charge. Do not under sell yourself, but do not price yourself out of the market.

Charge More but Offer More: If you can create convenience, people will pay for it, e.g., charge $5 – $10 more for your deluxe manicure but give people the polish.

Don’t Discount…Do Value-Added: Offer value by doing add-ons or with give-aways, e.g., after a body polish, give people the loofa mitt; after a pedicure, give them the emery board; etc. Don’t discount or de-value what you offer….strive to enhance the value.

Gift Certificates: Un-used gift certificates mean that you may have lost a marketing opportunity. You need people to come in if you want them to come back. Encourage people to use these.

Up-Sell and Link-Sell to Create an Experience: People should have an experience and not just a treatment. For instance, up-sell by suggesting the four handed massage rather than the two handed massage and link-sell by suggesting a hair style after a facial. Think what you can do to create a memory and a “wow.” Create excitement and you will have ambassadors who will do your word of mouth marketing.

Personalize: Each service should be customized and modified to meet the guest’s needs and desires. People want it “their way” not your way or they will take the highway to the next spa in order to get their own Special Personalized Adventure (SPA).


Products are important because they are directly related to the concept, treatment experience, retail opportunities, branding and profitability. Here are some points of consideration:

Branded Product Lines: Branded products can be a wonderful option because of the packaging, name recognition, liability insurance, etc. Be careful, however, with how many lines you have. Carrying too many lines can dilute your bargaining power for pricing, training, collateral material, free samples, etc.. If there are minimums, you could also face a spoilage problem.

Private Label: There is a wide gamut of options from having a generic product and package with your name on it to creating a product formula, fragrance and packaging. Having your name on a bottle is a great way to establish and enhance your image if you create a good product line, but there are lots of risks if you don’t. The mark-up value can be enticing, but the price of entry can be substantial. If there is not a strong “home spa” sales program, this may not be a cost-effective option.

Retail In-House: Retail is the only “annuity” a spa has. If people like the spa experience, they will want to take it home with them in terms of spa products, accessories and themed gift baskets. If you expect to sell products, you need the right line, space, incentive program, “sales” people, etc.

Mail Order: Database retailing is important in terms of establishing a relationship with your guests. Your product company should be your partner in the “after spa” sales efforts. This can be through marketing, fulfillment house services, etc.

Re-Order: Know lead time of ordering products so you don’t tie up money by heavily stocking your shelves.


Payroll is the most costly expense you have so it is critical to have the right compensation program. There are many ways to pay your service providers to show that they are valued and that they are part of your success. As you put together a compensation program, consider the following:

Hybrid Compensation: There are lots of options but some type of hybrid program can give people security as well as incentive. For instance, offer an hourly salary plus a productivity incentive or give people a weekly salary with an incentive. These could be draws against their actual earnings.

Commissioned Staff: You may want to have people on a fee-for-service program. This would be a treatment fee rather than a percentage.

Team Incentives: When everyone works together to achieve departmental and team goals, there can be greater earnings for the individuals as well as for the spa owners.

Benefits: Think about a benefits menu so that your staff can select what is important to them, e.g., health and dental insurance; discounts on treatments and retail; meals; uniforms; training; conferences; day care services; etc.


The spa business is a people business, e.g., everything you do revolves around your staff and your guests.

Invest in Your Team: Hire well, continue to train them, help them to grow personally and professionally and reward them in terms of recognition and incentives. Make your success their success and celebrate the success of the individual and the team. Create an environment that reduces turn-over and builds loyalty.

Invest in Your Guests: Personalize each guest’s experience, use people’s names, remember birthdays and special occasions, etc. Never forget to say thank you and welcome them back. As with the staff, it is important to establish a relationship and to make their feel that they belong and that you cherish their loyalty.

Invest in Your Community: You and your staff should participate in community events that are consistent with your concept. Do volunteer work, make charitable donations, reach out and invite people in. Be a good neighbor.


It is important to control operating expenses. The types of operating line items and the financial assumptions depend on if the spa is an IBU (independent business unit) or a department within the resort. The following are some of the more expensive operating expenses:

Credit Card Commissions: It’s important to negotiate rates but maybe spas should be offering preferred rates or give some type of “gift” when guests pay with cash.

Laundry: When a guest spends a full day in the spa, it is not uncommon to use 25 items per person per day. The laundry expenses will vary based on whether it is done in-house or out-sourced. You should do a laundry analysis, e.g., sometimes if out-sourced, the laundry company will buy all your robes, slippers, terry, etc. but will charge a bit more to launder each item.

Marketing: Most spas will be part of piggy-back marketing plan with the resort. However, there may be direct marketing costs the spa will incur for local marketing, membership sales, etc.

Professional Supplies: You may want an inventory plan so that you do not waste products. Think about pre-measuring products, setting up a requisition program, keeping track of pars and re-order times, etc.

Utilities: It makes sense for a spa to have an environmental consciousness program because this is consistent with the “health” message plus there are economic benefits.


Internal Marketing: A guest should never be at your resort and not know that you have a spa. There are numerous ways to promote awareness starting with hotel reservations booking your hotel room as well as your massage. Awareness strategies can include, but not be limited, to direct mail, e-mail blitz, newsletters, referral programs, frequent user and loyalty programs, in-room collateral, a spa button on your phone, etc.

External Marketing: If people like your program, make them your “ambassadors.” Offer them some type of incentive program to let their friends and customers know about the spa. Ambassadors could include wedding planners, gift stores, liquor stores, real estate agents, travel agents, etc.


If you have been able to establish a strong brand and a solid business plan that can be implemented impeccably and consistently, maybe it’s time to see how you can create additional revenue streams.

“House Call” Services: Be the provider of spa services to other hotels, private residences, condominiums, etc. Set up an “out-reach” program which can help you be a good neighbor while bringing in additional revenues for you and your staff.

Spa Parties: When people want to celebrate special occasions, create the spa party either at the spa or at a person’s home. This can include spa services, gift baskets, spa food and beverage, etc.

License Your Name or Set Up a Franchise: This is a major step but if you have something that is reproduceable, you might want to consider this option.


The spa business is not an easy business to operate and there is minimal room in which to make an error. It is not as profitable as people may think but there are rewards that go beyond the monetary. Your success formula should include the following:

Well Thought Out Plan: Create a solid and realistic business plan; plan a facility that has a good flow and feel; hire and reward well-motivated and service-oriented staff; continue to do on-going marketing; stay focused.

Impeccable Execution: Pay attention to detail; provide small and consistent surprises; be pro-active; make sure the facility adheres to the most stringent cleanliness standards; etc.

Stay Ahead of the Competition: Visit the competition and make sure you’re better than them; never be satisfied…if you stand still, you’ll fall behind; keep learning what else you can do and how to do things better. Strive for perfection and never be content.

Look at Trends: Stay on-trend by being aware of what is happening in spas, hospitals, recreation, health clubs, family vacations, leisure time pursuits, etc. Understand the past and present, but think in the future.

Spas are not a passing trend. They are an expected and necessary component of a resort. They must also be planned and operated as a viable business. Stay focused and deliver the promise.

About Judy Singer

Judith L. Singer, Ed.D., ISHC, is the President & Co-Owner of Pompano Beach, Florida-based Health Fitness Dynamics, Inc. (HFD Spa) ( an internationally recognized and pioneering spa consulting company that specializes in planning, marketing and operational advisory services for spas within fine hotels, resorts, day spas and mixed-use developments. HFD is dedicated to helping spas be marketable

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