{468x60.media}
Ms. Segerberg

Spas, Health & Wellness

Spa Payroll and the Implosion Factor

By Jane Segerberg, Founder & President, Segerberg Spa Consulting, LLC

During the current era of "infatuation with anything spa", it seems contradictory to mention the possibility of the implosion of spa businesses. After all, spas are still the "hot topic" and a highly desired and sought after travel and vacation experience. The reality is the Spa Industry has crossed the bridge from "build it and they will come" to consumer accountability, internal controls and business sustainability. Spas are more prolific now than five years ago. Spa consumers are increasing in numbers and spa consumer expectations are rising. With more spas and more savvy spa consumers, it is a time in the Spa Industry in which the cream will rise to the top and all others will fall by the wayside.

Your spa should provide increased business and visibility for your hotel/resort property as well as be a profitable department. High levels of service in the spa create a powerfully satisfying experience for each guest's visit. The spa experience is much more than just a service. It is a total hospitality experience. The experience not only includes the reserved treatment, but also the guest's entry and welcome to the spa, introduction to the facility, assistance during the pre treatment changing and relaxation activity along with the post treatment relaxation and closing experiences. The entire experience when orchestrated and managed to perfection is one delightfully smooth and consistent package. The challenge is in turning the expected high level of service into profit.

It is easy to understand that creating relaxing and memorable spa experiences for guests adds to the overall satisfaction of the guest's entire stay at your property. Spas can assist in illuminating a hotel/resort's excellent attributes. In addition to being a distinctive element of the property's overall image and positioning, it is also important that spas participate in contributing to overall resort profitability.

Choose your payroll control strategy wisely, or run the risk of creating a negative domino effect.

The very nature of the spa experience that makes it so successful - the high level of nurturing and one-on-one attention, is also the most costly element that can lead to the demise of its profitability. A quick glance at the spa's monthly statement clearly shows that spa payroll is the biggest expense line. Controlling total payroll wisely is necessary for spa sustainability and profitability. But, beware, choose your spa's profitability strategy wisely or run the risk of creating a negative domino effect that affects your spa's level of service and marketability and will eventually implode the business.

Profitability in the spa goes up dramatically when total salaries and wages drops below forty eight to fifty percent. Unfortunately, the spa experience is often seen solely as a treatment delivered by the service provider and not as a series of interconnected service touch points that delight and satisfy guest's needs. Payroll control that is focused on meeting the payroll demands of service providers while cutting back on leadership diminishes the orchestration and management of the full spa guest experience, causing its decline. Lack of strong leadership results in service that is inconsistent or non existent with guests feeling shortchanged. Without expert direction, the downward spiral of business sense continues as forecasting and scheduling staff converts to a lower priority resulting in less available service providers (I can't begin to list the number of times we have visited spas who were turning guests away, yet treatment rooms were empty). The very vision that enables a spa to be more progressive and create more business, including retail sales is diminished. The end result is reduced business, focus, leadership and service.

Managing spa salaries and wages requires a look at the total scope of the business.

Spa management is very sophisticated. Spa operations is basically all aspects of the Hospitality Service Industry under a microscope. Managing the quality of the total guest experience is paramount to the success of the spa. Lowering spa payroll with a focus on management and front line cut backs clearly does not maintain the uniformity and consistency of a quality guest experience. Total spa payroll review, including service provider pay and the effects of service provider pay scale levels will present eye opening results and help to maintain the necessary balance between leadership, direction and service. One key to maintaining profitability and pay roll balance is to ensure that the cost of delivering each single spa service is within a defined percentage. Individual treatment costs (including cost of product and the cost of wages for the service provider) kept below twenty nine percent for each service usually results in a balanced payroll that doesn't overtake total net profit.

Responsible and fair pay scales requires a look at the total scope of the business rather than what the local employee pool derives from the local spa around the corner. Survey other properties similar to yours in your region and include the cost and advantages of the benefits that your property offers. Service providers in resort and hotel spas receive many benefits not available elsewhere. Benefits such as a safe work environment, training, marketing of services, health benefits, provided uniforms, higher tips, and opportunity for advancement often are not available at local spas or as a private business owner. In addition, search for service providers who are well trained and eager to be part of a team. Partner with nearby massage and esthetic schools to help set expectations. Select highly skilled and newly trained students, then train them to deliver the experience according to your property's hospitality philosophy and standards. All the above should be carefully considered when establishing service provider pay and hiring policies.

With control and balance in all areas of payroll, it is now possible to ensure that your key areas: front desk, changing/relaxation areas, treatments and retail are under the scrutiny of skilled management. You can expect that your spa will be managed well to provide cutting edge treatments and service with consistent quality. Sound leadership in all areas will increase overall business, service providers will be busy, guests will be happy and the bottom line will improve. Your spa will continue to flourish in an increasingly competitive market while the mediocre will fall to the wayside. It will be sustainable, marketable, and another reason for booking a stay at your property.

Jane Segerberg is founder and president of Segerberg Spa Consulting, LLC., a multi-faceted spa consulting and management company with an industry reputation for creating spas that work –they are compelling for the property’s market, attain recognition, engage guests in memorable experiences and achieve bottom line success. Over Jane’s thirty-year history in the wellness, hospitality and spa industry, she has become recognized for providing outstanding service and keen attention to detail. For company information please view http://www.segerbergspa.com. Ms. Segerberg can be contacted at 912-222-1518 or janesegerberg@yahoo.com Extended Bio...

HotelExecutive.com retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by HotelExecutive.com.

Receive our daily newsletter with the latest breaking news and hotel management best practices.
Hotel Business Review on Facebook
RESOURCE CENTER - SEARCH ARCHIVES
General Search:

NOVEMBER: Architecture & Design: Authentic, Interactive and Immersive

Brian Obie

When people arrive at a hotel they have usually traveled a long distance. They are typically tired and stressed to some degree or another depending on how easy or difficult the journey. When they finally come into our driveway and understand this is where they should be – with the valet right there ready to greet them – they get the sense that they can finally relax. There’s a huge sense of relief. They now can begin their business trip or holiday with the family knowing they will be rested and renewed. READ MORE

Rob Uhrin

When you think of the word resort, what comes to mind? Upscale amenities such as white sandy beaches, luxury pools, first class dining and entertainment and the ultimate spa experience to name a few. The word “resort” probably does not conjure up images of urban cityscapes, or streets filled with busy pedestrians in business suits. There is a new class of resorts coming to the fore in the hospitality industry right now called urban resorts. This article will explore this new type of transformational city design and how to achieve it. READ MORE

Vince  Stroop

In a time when experiences are moments-long and shared over Instagram by many users, it is hard to top the surprise factor when it comes to creating a new destination. Nor should we, as hotel designers, try. With the pace of changing trends that is being communicated to us by branding agencies, designing the next new thing can be tempting. But I am not sure that’s what guests genuinely seek. And judging from the rise of Airbnb, I may be right on my guess that guests want memorable, meaningful experiences, not more selfies. READ MORE

Michael Tall

An urban resort is a property that connects guests to the unique and vibrant elements within a city and outside the hotel. The hotel itself acts as a concierge service, forming a direct link between the local community and those guests who crave localized and authentic excursions. With no signs of slowing down, the urban resort trend is here to stay, and hoteliers can successfully capitalize on this growing segment by keeping the guest experience in mind. At its core, an urban resort is a respite from daily life, offering guests the freedom to choose between relaxed disconnection or active participation within the local community. READ MORE

Coming Up In The December Online Hotel Business Review




{300x250.media}
Feature Focus
Hotel Law: Issues & Events
There is not a single area of a hotel’s operation that isn’t touched by some aspect of the law. Hotels and management companies employ an army of lawyers to advise and, if necessary, litigate issues which arise in the course of conducting their business. These lawyers typically specialize in specific areas of the law – real estate, construction, development, leasing, liability, franchising, food & beverage, human resources, environmental, insurance, taxes and more. In addition, issues and events can occur within the industry that have a major impact on the whole, and can spur further legal activity. One event which is certain to cause repercussions is Marriott International’s acquisition of Starwood Hotels and Resorts Worldwide. This newly combined company is now the largest hotel company in the world, encompassing 30 hotel brands, 5,500 hotels under management, and 1.1 million hotel rooms worldwide. In the hospitality industry, scale is particularly important – the most profitable companies are those with the most rooms in the most locations. As a result, this mega- transaction is likely to provoke an increase in Mergers & Acquisitions industry-wide. Many experts believe other larger hotel companies will now join forces with smaller operators to avoid being outpaced in the market. Companies that had not previously considered consolidation are now more likely to do so. Another legal issue facing the industry is the regulation of alternative lodging companies such as Airbnb and other firms that offer private, short-term rentals. Cities like San Francisco, Los Angeles and Santa Monica are at the forefront of efforts to legalize and control short-term rentals. However, those cities are finding it’s much easier to adopt regulations on short-term rentals than it is to actually enforce them. The December issue of Hotel Business Review will examine these and other critical issues pertaining to hotel law and how some companies are adapting to them.