More Spa Profitability - How, When, Where...
By Jane Segerberg Founder & President, Segerberg Spa Consulting, LLC | August 09, 2010
As a major player in the Hospitality Industry, spas have become independent profit centers that justify their existence with bottom line income that adds to overall resort profitability. In addition, spas can enhance resort/hotel occupancy, length of stay and occupancy ratios. Spas also provide the type of experience that all guests want and hotels/resorts should strive to provide throughout the property - a memorable experience that is caring, warm, empathetic and creative.
It is no wonder that the number of spas in hotels/resorts continue to grow at a rapid rate. The result of rapid growth, of course, is increased competition. The combination of intense competition, a very savvy spa clientele that demands exceptional experiences and mounting staff turnover requires a serious look at current spa operating and compensation models. Guests want a specialized experience that is more than the plush robe and cup of tea, while spa staff demands a pleasant work atmosphere, motivation and adequate compensation. It becomes rapidly apparent that having an attractive spa that merely provides efficient service is critical but does not define success. As the number of spas increase so do guest and staff expectations and loyalty to any one spa decreases.
The goal, here, is to increase the level of profit while at the same time building an increase in both guest and staff happiness and loyalty that in turn grows more profit and recognition for the resort/hotel property. To remain competitive, spas need to provide superior, insightful service at every service touch point and develop a deeper relationship with each guest. By operating efficiently during periods of high demand and creatively increasing business during mid to slower periods, spas can increase their net profit. Incentives throughout the spa can assist in keeping staff focused on creatively engaging guests in more services and opportunities while also generating better guest service and loyalty.
The Case for Incentives
You probably began reading this article to discover a few tactics to beef up the weaker financial areas of your spa. Actually, incentive strategy programs that are managed well create a perfect cycle of happier employees taking better care of guests who are pleased to spend more for additional services and retail while visiting the spa and are even more delighted to return. Staff is excited to deliver a guest experience that goes beyond normal standard operating procedures. A planned incentive strategy rewards positive behavior which results in a high level of performance at each guest interaction.
The rapid growth of new spas has exposed staff to many more opportunities causing an increase in staff turnover rates. Incentive pay recognizes staff for a job well done and develops a contented staff that will remain loyal to the spa business. Incentives coupled with good communication from management and good communication between spa departments promotes a higher level of esprit de corps which filters throughout the spa to all guests and further increases guest satisfaction.