Hotel spas, from urban hotel spas to resort spas, enjoy various perks that other spas do not. They have a client base of hotel guests right at their doorstep, the opportunity to tap into their hotel’s resources (Finance, Marketing, Housekeeping, Engineering to mention just a few), and the ability to reach out for support from the hotel general manager when needed.
However, with these perks comes a different set of challenges such as:
1. Increasing hotel guest capture rates.
2. Encouraging repeat visits.
3. Stimulating retail sales.
4. Attracting local (non-hotel guest) clientele.
Apart from these typical challenges, each type of hotel spa has its own unique difficulties.
In this article, we’ll take a closer look at what both urban hotel spas and resort spas can do drive more business to their particular spa type.
What resort spas can do to drive their business?
As a rule of thumb, when it comes to hotel spas, resort spas enjoy higher hotel guest capture rates than urban hotel spas. This is because guests in resort destinations travel predominantly for leisure purposes – people are either on holiday, wanting to explore a new destination, or looking to relax and unwind. These guests are therefore more likely to visit the resort’s spa.
However, although resort spas generally enjoy better hotel guest capture rates than urban hotel spas, resort spas have their own set of challenges:
1. Increasing their hotel guest capture rate (as the spa relies mainly on the hotel guests for its revenue).
2. Encouraging guests to visit the spa more than once during their stay.
3. Competing with other activities at their resort or in their area.
Here are 5 ways resort spas can overcome these common challenges to drive their more business:
1. Integrate Seamlessly with Your Resort
Hotel guests are resort spas’ primary market. This is why resort spas must rely heavily on the rest of the hotel team to drive business. Make sure to build relationships with all hotel employees who are in constant contact with guests, from Front Office staff, Concierge, Housekeeping to Food and Beverage. Share your spa’s news and daily promotions for other staff members to extend. Invite key team members to try spa experiences, and together with other department heads, develop attractive incentive programs to encourage cross-selling initiatives. A fully integrated spa team will give you the support you need to drive more visits.
2. Tap into the Bigger Picture
Total spa revenue generally represents anywhere from 1% to 10% of total hotel revenue. This is why spa managers sometimes feel that their general manager only pays 10% attention to the spa. However, being a part of a hotel ecosystem has its advantages. For example, you could tap into your hotel’s loyalty program to add spa services, or work with your revenue and distribution manager to see how your spa can be included in different Room and Dining packages. With spa management software that connects to your hotel’s software, you can send targeted emails and promotions to the hotel’s VIP guests, loyalty card holders, and other repeat guests, thereby securing more bookings.
3. Focus on Frequency
Resort guests tend to have a longer average stay than those in urban hotels, and are also more likely to visit the hotel spa. But that doesn’t necessarily mean that these guests will have more than one spa treatment during their stay. Implementing a dynamic pricing policy, combining treatments with other wellness activities into attractive packages, incorporating regional therapies into your treatment offerings, and creating activities that allow children to get involved will encourage guests to visit your spa more frequently during their stay. Spas are increasingly becoming social and family spaces, so you should adapt your menu accordingly.
4. Price for Your Region
Be relevant in terms of your pricing strategy and service offerings. It’s challenging to charge the same price for services across the globe. Your client might be prepared to spend over $200 for a massage in the US, but is very unlikely to do so at a spa in Cambodia. Adapting your price points and treatment menu to your location and client mix will make hotel guests more likely to book multiple services with your spa.
5. Leverage Free Time
In the hotel industry, the average length of stay in resort hotels tends to be longer than in urban hotels. Similarly, in resort spas, the average treatment time tends to be longer than in urban hotel spas (up to 80 minutes). Leverage this time advantage to increase spa occupancy and average treatment rates and decrease time wasted in treatment turnover during your peak hours. It is easier to charge more for longer treatments, whilst still maintaining product costs. For example, the product cost for an 80-minute massage is roughly the same as that for a 50-minute one, but you can charge much more for a longer service.
Resort spas that focus on encouraging hotel guests to visit the spa more frequently during their stay will be better equipped to drive their business forward. The way you market your spa and cater to resort client is pivotal. The more visible and integrated your spa is – and the more creative you are in developing tailored packages – the more willing your clients will be to visit to your spa multiple times during their stay.
We’ll now take a closer look at what urban hotel spas can do to optimize their business.
What can urban hotel spas do to optimize their business?
Guest capture rates for urban hotel spas vary significantly across the globe. For example, in China, these figures can go as low as 1%, and in the Philippines and certain locations in Europe, figures can be as high as 8 to 10%. With this relatively low capture rate, spa managers are under enormous pressure to meet their revenue goals.
Due to the low average length of stay and predominantly MICE or business clientele in urban hotels, it’s difficult for urban hotel spas to capture this type of guest. The focus of urban spas should therefore be to tap into other streams of revenue and target additional audiences to drive their businesses forward.
Here are 5 ways that urban spas can tap drive more business:
1. Get Competitive
Urban hotel spas normally face a lot of competition from other day spas in their area that provide budget to high-end services. If you manage an urban hotel spa, the first thing you should do to drive more business is analyze your competitive set. Identify who your direct and indirect competitors are, and clearly define your spa’s strengths and weaknesses in comparison. Then divide your target audience into two different customer segments: hotel guests and local clients. Once you’ve identified your target audiences and your competitors, you’ll be able to come up with a customized menu of services and marketing plan that will draw new clients to your spa.
2. Offer Perceived Preferential Pricing
The general perception among local clientele is that hotel spas tend to be extremely expensive. It’s important that you bring down this price barrier. Identify the price point of each of your customer segments and together with your Director of Revenue and Distribution, create rate fences that are favorable to local clientele. Examples of preferential pricing would be: Memberships, off-peak pricing, local client specials, and loyalty programs, to name a few. Your external client base will grow once local residents perceive that they are getting preferential treatment and pricing.
3. Leverage Unique Selling Propositions (USPs)
Leverage facilities and other benefits that competing day spas in the area might not have. For example, you could include the use of your hotel’s gym, sauna, and swimming pool in your spa memberships. Other benefits such as discounts in your hotel’s restaurants or special room rates also tend to be attractive to local residents. For the business hotel guest, organize brief spa treatments during meeting breaks to entice these guests to squeeze in a few moments of relaxation in their busy schedule.
4. Create visibility in your hotel and community
Make sure your spa’s message is clearly visible and tailored to each of your audiences. For local clients, consider running advertising or social media campaigns that focus on more affordable, quick treatments. Within the hotel, your spa should be mentioned on all hotel collateral and signage. Leave vouchers at the front desk and concierge to encourage guests to visit the spa. You might also run targeted specials for club and executive floors to attract VIP clients.
5. Build a Strong Brand Identity
Your spa should have a brand identity that’s separate from the hotel’s. Create a solid online and offline presence of your spa. Build a database of local clients and send out targeted mailings. Use the hotel’s database to reach out to potential hotel guests or groups that would be interested in your spa services. Having a unique identity will allow you to tap into your hotel guest and local client markets more successfully.
In summary: Urban hotel spas should focus on tapping into their local market as well as catering to their hotel guests. Understanding that there are limitations on hotel guest capture rates and exploring alternative streams of revenue will help urban spas drive their business forward.
Sonal Uberoi makes spas around the world profitable. Spas, hotel groups and wellness companies hire Sonal to help them design, set up and manage their businesses. Her unique finance background and diverse skillset combined with worldwide experience make Sonal the go-to expert for spa optimization solutions. You can read more of Sonal’s work on the Spa Balance blog.