of spa operations in the Americas , the answer is no . “ I think it ’ s a time when we are so short-staffed that we ’ re turning away so much demand . So how do we sort of utilize that high demand ?” Holbrook asks . The process , Holbrook notes , is likely to require a considerable amount of training and education . “ How do we educate the spa leaders in the industry to make this mainstream ? I think there has to be structure and guidance around it . It ’ s got to be about the education of our young leaders and even our tenured leaders ,” says Holbrook .
Despite the effort that may be required throughout the spa industry to dispense with tradition and embrace revenue management strategies more broadly , Damien Craft believes that the present moment , already marked by change and innovation , is an ideal opportunity for spas to get more intentional about driving profits . “ The world is changing ; the way we do business is changing . It ’ s not a far-fetched idea to think that this is the best time for people to start implementing new practices and procedures ,” Craft says .
The high level of demand for spa services that Alena Stavnjak is seeing at her spa was part of the motivation for choosing this month to test out her spa ’ s variable pricing initiative . “ The spa ,” says Stavnjak , “ is beating our numbers from 2019 , which is amazing . We felt that there is a demand for the spa [ that will help ] increase our revenues .” Though she will not know exactly how much of an increase to those revenues her new strategy will produce , she estimates that they could add an amount equivalent to nearly 15 percent of the spa ’ s budget .
MEASURING IS A MUST
Stavnjak ’ s estimate about the potential impact of implementing a new revenue management strategy is , of course , not drawn from thin air . It ’ s only by carefully measuring the past performance of your spa ’ s offerings and understanding which services are most popular , which services deliver the greatest margins and when the spa is typically busiest that a spa leader can effectively track the effects of the strategy they are adopting . “ You ’ ve got to know your numbers . You have to understand your business trends ,” says Damien Craft . “ It ’ s really important to know what your top-selling services are .”
Just as importantly , notes Suzanne Holbrook , spa leaders must be able to cross-reference their best performing services ( in terms of both popularity and profitability ) with the spa ’ s high-demand periods . Doing so will help determine which offerings should lead the spa ’ s revenue management strategies . Holbrook advises starting broadly
and sorting your menu items into distinct groups . “ Break it down into high-demand treatments that make big profits , high-demand treatments that make low profits , low-demand treatments that make high profits , and so forth ,” Holbrook says . “ So [ spa leaders ] can identify which treatments at a busy time they can really drive .”
Craft , Holbrook and Stavnjak each agree that a clear understanding of a spa ’ s booking software is also key . After all , to effectively implement a revenue management strategy , spa leaders must be able to not only efficiently gather and sort historical data but also to automate adjustments to service pricing or availability based on the parameters of the strategy they are putting in place .
Ultimately , the question of how effective revenue management can be in the spa industry is a factor of the number of spa leaders willing to think beyond the traditional and embrace new practices . Nothing is guaranteed , but there is plenty of evidence to suggest that veering away from “ the way it ’ s always been done ” may be the key to unlocking the spa industry ’ s true earning potential . �
FEATURED SOURCES
DAMIEN CRAFT Executive Director of Spa & Wellness AMRIT OCEAN RESORTS & RESIDENCES
SUZANNE HOLBROOK Senior Corporate Director of Spa Operations MARRIOTT INTERNATIONAL IN THE AMERICAS
ALENA STAVNJAK Director of Spa and Retail TRILOGY SPA HOLDINGS 1 HOTELS
Special thanks to FRANK PITSIKALIS for providing background information and valuable feedback on this article .
20 PULSE � OCTOBER 2021