Spa Revenue Management

Book Discription

 In principle, spa managers should be able to apply revenue management to spa operations. To do so, however, requires a revision in the way most spas traditionally have viewed sales. Most spa managers track appointments and customer needs, but instead they need to focus specifically on the time element involved in their services. A time-related measure, revenue per available treatment-hour (RevPATH), integrates the price and duration of the treatment as factors in the revenue calculation. Certain elements of current-day spa practice, such as discounting and managing treatment duration, carry the seeds of revenue management, but those are often implemented as tactical measures during particularly slow or busy times.

Spa and wellness is a wonderful industry but spas can often yield low profit margins. Costs can be high, and occupancy and retail revenue are dependent on a variety of factors that are often beyond your control, like political, socioeconomic, and environmental factors, staff shortages, seasons, day of the week and time of day.

Fortunately, there is an almost foolproof way to significantly increase profits at your spa: revenue management. Despite ample evidence of revenue management’s incredible power to boost profits, however, not every spa uses it, which means many people are leaving considerable amounts of money on the table

Few spas have established the necessary strategic approach to assemble those tactics into a coherent revenue management strategy. This report establishes a framework for implementing a spa revenue management strategy and sets a practical road map for its execution