Spa Development and Asset Management: Development Management
By Peter Anderson Founder, Anderson & Associates | October 28, 2008
If you are not proactive early in this process you will ultimately realize a spa that is poorly designed, inefficient to operate and unable to support you operational needs.
First and foremost, if you are contemplating the development of a spa at your lodging facility, do you already have an unused or underutilized space in your hotel, or will you need to build the additional facility? The cost difference between the two can be significant and because it is all about the revenue per square foot that your spa will generate, and its ability to enhance your existing revenue sources so that you can justify your construction costs. A spa in a lodging environment must compliment and enhance your current operations. Spas are no longer amenities reserved for 4 and 5 star resorts. They are found in many varied lodging products, and when done correctly significantly bolster room rate, extend length-of-stay, fill in low- and shoulder-season demand, augment food and beverage revenues and create added spa and related retail revenue.
How big and How much?
Asking what a spa costs is akin to asking the price of a car. The costs can be all over the map, depending on the amenities and finishes you require. However, a good place to start is to look at land cost in your area. Are you developing a spa within your hotel, on excess land that is part of your resort, or do you have to purchase adjacent land to execute your plan? Land cost will give you an indication if spa development is the highest and best use for your parcel.
If you are looking to convert existing space as a renovation, your cost per square foot may range from slightly over $100 per square foot to upward of $400 per square foot. A good starting point is to think in the $200 to $300 per foot range. We have seen 5-star accommodations built for $200 per square foot in areas where land is relatively inexpensive. Conversely, if there are issues with poor management and numerous change orders, the costs can sky rocket.
New building is a little trickier, and normally ranges from $200 - $500 per square foot. Once again the lower portion of the range correlates to 3 star facilities, while the $350 and above range is normally reserved for the 5-star spas. Like with renovations, poor project management can result in significant cost increases. It is always easier and cheaper to have the architect erase a wall on the blue print that it is have the contractor submit a change order, or worse knock down a wall. Please remember that these are ranges and estimates developed over time from actual projects, anomalies with your project may nullify the linear interpretation of these ranges.