HOTEL BUSINESS REVIEW

July FOCUS: Hotel Spa

 
July, 2012

Hotel Spa: The Biggest Challenges

More and more, hotel spas are learning that simply waiting for guests to walk through the door or passively relying on traditional hotel marketing department approaches aren't winning strategies. A marketing department's game plan of placing the spa's brochures in the guest rooms, spa posters in the elevator, a page on the website, all dosed with "luxuriating" descriptors and images of guests having treatments simply isn't enough. Additionally, the spa-goer is forever changed by the recent prolonged unemployment, rising fuel costs and economic instability. As spas increased in number so did those frequenting spas, however, their wants and needs were changing. No longer will the $200 per hour spa service make it in most cities without the recipient feeling that they have really received something with a measurable impact on their health and well-being. The art of consistently satisfying the needs and desires of spa guests results in loyalty and valuable referrals. The July Hotel Business Review will present readers with an insight into some of the current challenges hotel spa operators are experiencing, with case studies from those hotels currently at the forefront of spa leadership.

This month's feature articles...

Greg Miller

In keeping with the distinctive character of the collection, vast varieties of spa services are available to guests and include indigenous treatments. As a result, the Destination Spa Collection is challenged with managing sixteen spas, all unique in their offerings and services, while at the same time, maintaining consistent standards and memorable experiences for spa guests. Our spa team leaders have seized this opportunity to open communication amongst all directors to create a sense of community and alignment. READ MORE

April  Bingham

Spas are everywhere. In fact, it wouldn't be unheard of to come across a hotel/resort spa, day spa, club spa, and medical spa within a 20-mile radius. While this abundance of spas gives consumers endless options, it makes it more difficult for spas to differentiate themselves from the competition. Deals remain to be a main consumer draw, but there are other approaches spas can take to rise above rate wars and give consumers an unforgettable spa experience - on a dime. READ MORE

Michael Haynie, SR.

More than a decade ago during the beginning of the spa trend, spas began cropping up in hotels all over the country. While hotel spas can be a profitable venture in some markets and resort hotels, in this economy, there are hotels in other markets that need to reevaluate the way they provide spa services to their guests. Marketing to outside customers, providing complementary services, downsizing the spa, or partnering with local spas and treatment professionals are just some of the ways that hotels can still offer the luxury of spa services without sacrificing profitability. READ MORE

Jane Segerberg

As we build spas for the future or re-invigorate current spa facilities and re-purpose spaces, the process and results have to make sense for investors. There is a new grading system for value, both from the spa guests' perspective and from our spa owner clients' perspective. Given the importance of value and the intricacies of spa design, the process becomes not just about an investment in the number of treatment rooms or upgraded finishes but how the spa can operate at its best and how we can elevate service levels. READ MORE

Kimberly DeOrsey

By recognizing that you are offering the guests a bonus for what they came for in the first place, relaxation, inner peace and calm, you can extend their experience, by offering a signature line that they can associate with your spa. The probabilities of them returning to the spa for more experiences and ordering product in person or online increases. READ MORE

Kate Mearns

Spas have certainly come a long way in the last 15 years. In that period, growth of the hotel spa segment has been rapid and for the most part sustained at a strong pace. That strong growth was fueled by two attitudes that hotel operators seemed to share: first, a “build it and they will come” mentality, and second, the “keep up with the competition” approach. And at first, the business results suggested it was working - guests were indeed visiting these new spas and strong spa revenues proved it. However, since the early growth days in our industry, we have had to survive numerous challenges to our businesses; and those challenges continue today. This article explores the top 8 key challenges facing spa operators today. READ MORE

Tyra Lowman

In October 2010, Hilton Worldwide launched eforea: spa at Hilton, the first global spa concept from its flagship Hilton Hotels & Resorts brand. The concept has grown to include eleven locations in eight countries around the world with more than 90 new spas currently in development for Hilton Worldwide's full service Hilton Hotels & Resorts, DoubleTree by Hilton and Embassy Suites Hotels brands. Here Tyra Lowman, senior director, global spas, full service and luxury brands, Hilton Worldwide, discusses design challenges intrinsic to the worldwide reach of the innovative spa concept. READ MORE

Melinda Minton

Social media is still a “thing” not completely embraced by our industry. However, those who are doing it right have already captured market share, cut costs and are leaving the others in the dust. Learn more about using social media in your spa and property and implementing it in a significant, yet easy way, right now. READ MORE

Chris Pulito

The amenity spa can and should be more than, well, an amenity. It should be a valuable profit center within the entire hospitality operation. This article focuses on three key areas: people, inventory and average service rate. It provides specific tips, steps and controls that are proven to lead to profit. READ MORE

Jacqueline Clarke

There has been a major shift in consumer behavior in regards to spas. This is due to a combination of factors that include lifestyles, the economy, and a concern with health. But whatever the reasons for this shift, wellness is in for the spa user, while pampering is in decline. Today spa users want “results,” this is clear form the latest spa market research published by Diagonal Reports. By results the users spa treatments which enhance wellness or make them feel better. Feeling better for most people means relaxing tense and tired muscles. Massage therapies which re-energize people account for most business in spas. The demand for massage is benefiting large spas and hotel spas in a major way because these spas already specialize in massage therapies. READ MORE

Mark  Wuttke

In spa branding, the retail company you keep is especially critical to preserving the integrity of your own brand. A five-star operation aligns with product brands that are akin in quality and image. Should any of those product brands show up at the local corner drug store or online discount retailer, the ripple effect can be damaging. This article provides a template for spa-retail brand alignment and offers tips for avoiding pitfalls in matching product brands to the spa. READ MORE

Kimberley Matheson Shedrick

The new economy, partnered with the explosive and dynamic growth of “always on” technology, has created multiple channels for hotel spas to engage a highly demanding, knowledgeable and connected clientele. Traditional marketing efforts must be accompanied by a shrewd Internet strategy to effectively engage and deepen the relationship with customers. This article explores practical techniques that can be applied with minimal investment to increase your market share as well as customer loyalty. READ MORE

Judy Singer

Do you want your spa to be profitable? Do you want your spa to help improve your hotel's occupancy and increase the revenue per guest? If yes, have you invested any resources (money, training or coaching) to help your spa director to be a better financial business manager? If you haven't invested in educating your spa director to be a spa "business" director, don't expect your spa to be as profitable as it could and should be. READ MORE

Peter Anderson

High operating expenses combined with increased “discounted” competition with day spas have painted hotel spas into a financial corner, making tight margins skin tight. Given that the average hotel spa can charge a premium of 50 to over 500 percent over the local day spa and still only achieve a departmental profit of somewhere between 9% and 15% is not only staggering, but leaves little room to navigate into more profitable seas. The global economic melt down that started in the latter part of the 3rd quarter 2008 and the tenuous progress that continues today has the potential to make a difficult situation dire. So the question at hand is how should a hotel or resort enhance, expand or reposition their spa and how best can they justify their “enhanced pricing” and still remain competitive? READ MORE

Cassie Hernandez

In the spa world of 2012, the word organic has been tossed around for some time, however the definition relayed to the general public has changed. While retailers, spas and cosmetic companies customarily have some type of organic ingredient in their demographic, not every company incorporates organics for the same reason. Some see organics as offering a higher concentration of pure ingredients and in turn, healthier for the skin while others view organics simply as an ingredient labels which helps sell the product or treatment. And, some see organics as a marketing ploy that doesn't make any difference in retail. Ultimately, we need consumer “buy in” to demand quality organic products on the market. READ MORE

Bill  Kotrba

After location, of course, the three most important profit levers for a hotel are price, price and price. Suppose you are given the opportunity to make a 10 percent improvement in occupancy, price, fixed costs or variable costs. All things being equal, a top-line price increase drives the most dollars in bottom-line profit. This is not a new discovery, although with the intense focus on cost-cutting that many businesses have embraced, it bears repeating. READ MORE

Nitin Shah

The crisis in our economy and the banking industry has focused renewed attention on four banking realities that directly impact hoteliers - and limit the availability of funds for hotel funds: 1. Hotel loans are classified as "special purpose", 2. Hotels are classified as "commercial real estate", 3. "Mark to market" financial regulations reduce asset value, and 4. The FDIC policy on "loss-sharing" agreements encourages unnecessary and avoidable foreclosures. My column examines how these procedures are detrimental to the country's 51,000 hotels - and why leaders in hospitality and banking, including me, are working actively to change them. READ MORE

Holly Zoba

Writing engaging social media content seems challenging, at times even impossible. The truth is there is no quick fix or six easy steps to writing engaging posts - despite the headline claims of so many articles. Instead, writing engaging content requires some research about your product, about your customers and a fair amount of creativity. Balancing entertainment while adding value is hard work, but the payoff of a well-executed plan can be an increase in brand advocates. READ MORE

Scott Nadel

After a guest leaves your hotel they will not remember the beds, breakfast, or building, they will remember how you made them feel. Creating a culture of “making guests feel good” will bring them back as loyal customers. Goals are great, but have the effect of turning a guest into a number or statistic. Remember culture eats goals for lunch. A warm friendly greeting, an open door, solving a problem now by meeting or anticipating a need, not passing it on are the basics of guest service. Whenever or however you touch a guest will make them feel good. Culture; great hotels guests love. READ MORE

David Hogan

Do you know the distinction between a salaried employee and an employee being paid hourly as it relates to your payroll taxes? How well do you really understand the variety of payroll tax regulations? Payroll processing can cause lots of headaches for hoteliers who often have a variety of employees with different payroll tax requirements. Because of the severe penalties associated with missed deadlines, incorrect employee data and unpaid payroll taxes, hoteliers need to make it a point to stay up-to-speed on payroll tax compliance issues so they can focus on what's truly important - running a hotel. READ MORE

Christian  Koestler

The practice of consumers checking, evaluating and analyzing guest reviews and rankings of lodging properties before making reservations is commonplace. Yet the idea of consumers guests actively participating in shaping a brand is a relatively new realization for many revenue managers. This new paradigm presents one of the most significant challenges, and opportunities, for revenue management. Increasingly, online brand management and revenue management intertwine, opening the door to the next step in the evolution of the revenue management profession. Those who can harness and work effectively with the plethora of online information will be those who truly impact their properties' brands. READ MORE

Paul van Meerendonk

Revenue management is not a new concept, yet some are still struggling with its uptake, while others are revelling in the ongoing success it has brought to their organizations. Two recent conversations with global clients have stood out in highlighting very contrasting approaches to adopting revenue management principles. These two organizations have a very similar business model, operating in the same space, with similar stakeholders and yet they have taken two very different approaches to adopting revenue management principles. The first organization has clearly demonstrated the value of revenue management in a way that it is no longer questioned. It is now part of the intrinsic fabric of the company's operations. While the second is yet to articulate what value revenue management can bring. What has made the difference between the two? These three key strategic viewpoints can help companies successfully demonstrate the value of revenue management on a daily basis. READ MORE

Saeed Kazmi

Many hotels are using workflows designed as long as 50 years ago during the age of centralized computing when mainframes were state-of-the-art technology and paper was the accepted form of communication. This started to change with distributed computing - namely, the advent of PC's and databases - which minimized the use of paper, but didn't eliminate it. Now mobile applications are harnessing the power of mobile computing. We are seeing “workflow automation” - and with it, almost no need for paper. The impact is significant on how hotels operate, how staff members perform daily tasks, and how human resources are managed productively. My column examines “how” and “why.” READ MORE

Kelly  McGuire

Most managers appreciate that understanding customer value, and more importantly customer lifetime value (CLV), can help them plan strategies to encourage loyalty behavior, increase revenues, and ultimately drive profits. In fact, companies invest heavily in loyalty and rewards programs primarily to collect customer data that they can ultimately use to calculate customer lifetime value. Casino companies are well known for collecting information on their patrons' spend on the casino floor and across the enterprise, and using this information in marketing, rewards, and pricing. Because of this success, hotel managers are also interested in exploring the opportunities associated with CLV. READ MORE

Steven Ferry

In the wake of mass affluents pulling back on their vacations and businesses also restricting budgets to deal with increased costs of business travel, the tourist industry has had to be even more creative in providing perceived value for money to attract guests in an environment where facilities and pricing do not differ materially within any one category—all while staying within their own restricted budgets. READ MORE

Jim  Suggs

A hotel may be elegant and deftly designed. The materials may be of the highest quality. It may provide five-star service and amenities. But if a hotel looks the same in Chengdu as in Chicago, then it is only an elegant, high-quality, five-star hotel. It says little about the place. And a unique guest experience is inextricably linked to place. What are the challenges and solutions to creating a memorable guest experience by design? READ MORE

Mark Simpson

Think about your business goals as a travel marketer: you want your online visitors to book more trips, extend their trips, book more higher margin trips, add items to enhance or expand their trip—insurance, tickets, car rental, etc. And you have to do this while fighting tooth and nail with competitors, high bounce rates, fickle consumers... you name it. There simply is too much noise, too many pricing wars and so much competition in today's market to not get your online strategy right. So start by following a few crucial fundamentals, and truly put the customer at the heart of your marketing universe. READ MORE

Ryan Day

The way traveler's access information and services has changed dramatically since the introduction of the mobile web. We live in a world where people are often more comfortable asking their computer for advice then actually having to speak with a real person. Today's consumers are less willing to take the word of strangers as fact. Guests want to make their own decisions by evaluating their options through independent research. This trend has penetrated the hospitality industry, having profound implications for the hotel concierge. READ MORE

Ashish Gambhir

Understanding what guests are saying about their stay at your hotel and what is influencing their perspective enables your marketing and operational executives to determine what steps need to be taken to ensure the best experience possible. Mining and analyzing online feedback and summarizing massive amounts of raw text via an intuitive dashboard alerts your executives to operational and marketing strengths, weaknesses, and opportunities per every hotel, region and brand. At a glance, these real-time summary views provide a strategic look at where you are now, where you need to be going, and what needs to be done to get there. READ MORE

Coming up in March 1970...