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Finance & DevelopmentFinanceFour Reasons to Build Revenue Management Strategies for Spa Outlets

Four Reasons to Build Revenue Management Strategies for Spa Outlets

Revenue management for hotel guestrooms has been an important part of property strategies for decades. Other outlets—like spas, restaurants, sportsbooks, pools, and retail shops—are typically forgotten about in terms of ancillary revenue opportunities. Moving beyond viewing these outlets as simple ways to statistically boost revenue can do much more for a hotel and create dynamic revenue opportunities.

Among others, there are four reasons that additional outlets should move to a revenue management strategy. Examining revenue management opportunities at a spa can show the amount of revenue that can be realized when implementing a strategy.

Reason One: The World Has Moved Digital

The phrase “digital transformation” has been discussed at length as of late—with good reason. The global COVID-19 pandemic turned customer behaviors upside down. Customers across industries are turning to digital channels, such as websites, first—whether that’s to book services, find information, or communicate with companies. Of course, the hotel industry has been shifting to digital for years, but the pandemic significantly accelerated the process. Companies that weren’t already prepared for the mass move to digital found themselves left behind.

Revenue opportunities for spas lay within digital channels because customers search online first. However, many spas still make online navigation difficult for customers to find the information that they are looking for. And, trying to book online can prove difficult for some customers. Getting the digital basics down—like making it easier for guests to book online—can set up spas for streamlined operations and automation opportunities.

Reason Two: Automation Leads to Revenue Success

Many spas only change their prices twice per year because their point of sale (POS) system doesn’t make changing prices easy, and many spas don’t have the insight into what the prices should even be. While revenue strategies are tough to create manually, a revenue strategy that’s backed by management tools can help ease the process.

Spas can drive revenue by time of day, day of the week, segmentation, and more. Based on data from booking engines and POS capabilities, a hotel spa could have the opportunity to sell out on—for example—Mother’s Day. With those insights available, the spa can work to sell the most profitable services. Or, the data can show that a single massage that usually costs $100 on a slow day could sell for $150 on high-demand days. And, the data could show that weekends are busier than early weekdays, giving the hotel spa the power to charge more on those days.

In addition, data can give insight into top selling or revenue-generating services. If a spa has, for instance, sold $100,000 worth of a particular custom massage per year, it can determine whether it is something that should be added to the regular menu. The key is to have the data in one centralized location with tools that can analyze and drive decision-making.

Reason Three: Manage Costs in a New Labor Landscape

Nearly 500,000 jobs in the industry are forecast to be lost by the end of the year, according to AHLA data. Hotel operations might be working with a skeleton staff. Because of that, spas need to be even more nimble when it comes to scheduling team members.

If a hotel spa has access to on-the-books business and unconstrained demand forecasts, a specific day and time can help with labor planning. If data shows slow business on a certain day, a manager can know to ease up the schedule—and vice versa for busier days that need more employees. Not only can this help control costs, but it allows commission-based employees to make more when there are services to perform and appreciate when they are not overworked with handling demand with less staff.

Reason Four: Break Down Silos Across Departments

The industry has been talking about siloed sales and marketing departments for years. With data—especially data segmented by demographics—departments can work together to market to the correct people and services at the right time. The data can show patrons by gender, how many treatments they’ve purchased over a set period, whether they are hotel guests or locals, their ages, and more. Those insights allow the marketing department to personalize offers. With data-backed insights, a hotel spa can put meaning behind marketing efforts.

Marketing automation can be useful for breaking down silos, too. Correct software tools can automatically forecast soft periods by analyzing customers and their behaviors. So, if a hotel spa wants to pick up treatments for a slow Tuesday, the tool can determine the customers that are likely to book available treatments. Successful marketing campaigns that target the right customers at the right time or in real-time can be easily accessed.

Think Dynamically

Dynamic revenue strategies start with thinking dynamically. The right tools can get hotel outlets in the right place to not rely on manual methods to pricing, which is especially important as the industry heads into a new operating landscape amid a steep labor shortage. Previously forgotten revenue generation outlets can be more important to an ancillary revenue strategy and make more toward the bottom line.

Chris Knothehttps://www.sas.com/en_us/industry/hotels.html
Chris Knothe is principal industry consultant for SAS Hospitality & Gaming, which helps hotels and casinos use advanced analytics to maximize the value of their data. Prior to joining SAS, Knothe led Duetto’s Hospitality Solutions division, helping hotels across the globe implement innovative revenue optimization strategies. Knothe brings an extensive background in both hotel operations and SaaS technology solutions.

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