Hotel & Motel Management - April 21, 2008 - (Page 30)

30 News H&MM April 21, 2008 | HotelMotel.com Revenue mix All hotels – spa department 2006 Revenue Continued from page 4 body wraps and facials, according to the report. The report also attributed growth to alternative sources of revenue such as personal training, fitness memberships and merchandise sales. In fact, clothing and merchandise sales had the highest revenue gains—up 20.4 percent from 2005 to 2006—in hotel spa departments and make up 6.6 percent of hotel departments’ revenue, on average. “As more hotels guests are becoming educated spa consumers, they are incorporating elements of the spa experience into their everyday life by purchasing items that Hotel spas direct operating expenses 2006* Administration 0.3% Contract services 3.6% Cost of goods sold 3.3% Laundry, dry cleaning 1.9% Linen 0.4% Management fees/ royalties 0.3% Marketing 0.2% Miscellaneous 2.2% Operating supplies 2.5% Professional products and supplies 3.3% Salaries, wages and employee beneﬁts 50.7% Uniforms 0.2% Total expenses 68.9% * Does not include undistributed or ﬁxed charges of hotel Source: PKF Hospitality Research Baltin PKF MathesonShedrick NATURAL RESOURCES can enhance the home spa experience. Spa boutiques have become an integral component of the spa business model as they provide products that relate speciﬁcally to individual treatments,” said the report’s author, Bruce Baltin, senior v.p., PKF Consulting in Los Angeles. Resort hotels are advancing the spa trend, according to Baltin. “Volume, particularly at resort hotels, has allowed for higher profit margins on many popular services because of their increased capabilities,” Baltin said. Kim Matheson-Shedrick, president, Natural Resources Spa Con- sulting in New York, atHealth/wellness Other Club use tributes the growth to services revenue 2.9% an increase in public 0.4% 3.6% demand as well as to the Merchandise, hotel spa industry offerclothing revenue ing higher-quality facil6.6% ities, which results in an increase in price point. Membership Matheson-Shedrick fees also credits a gender 5.6% shift that has seen men take advantage of spa services. Additionally, new age groups are incorporating spa services Massage into their lifestyles. 51.3% “More and more people see it as preventive maintenance rather than a luxury. Many consumers are reprioritizing their Retail sales rise ﬁnances to include spa services as Sales in spa retail operations have a health measure,” Matheson-She- grown in part because of the ﬁxed nature of the costs associated with drick said. Faith Taylor, v.p., innovation retail when compared to spa serand product development for vices. In addition, Matheson-SheWyndham Hotels and Resorts, drick believes this increase in retail agreed that Generation X’s great- revenue is a natural outgrowth of er interest in sustainable, healthy better management. “Spas are relatively lifestyles as they begin immature in their busiapproaching middle ness cycle, but many spas age is spurring growth have become better at edin the hotel spa revenue ucating their staff to recmarket. ommend a suite of prod“The GenX market is ucts to their clients,” a big component of this, Matheson-Shedrick said. as well as the [lifestyles of Whether clients buy it health and sustainability] or not, [staff] should recmarket,” Taylor said. Taylor WYNDHAM ommend a regimen.” w ow N /m er om st .c gi m Re jmb . Spa treatment 21.7% Fitness lessons, personal training 0.5% Salon treatment 7.4% Source: PKF Hospitality Research Future growth While the report noted the positive increase in sales, it also found that hotel spas can improve their proﬁt margins. For example, labor costs account for about 73.6 percent of hotel spa expenses, which cuts into hotel spas’ proﬁtability. In addition, urban hotels can improve their spas’ proﬁtability. “Maintaining employees is an industry-wide issue. We need more ﬂexibility in how we keep our employees,” Taylor said. While resort spas might draw more volume, all hotel spas can take advantage of the trend. “With a stronger focus on staffing and a better understanding of the local community, both urban and resort spas have an incredible opportunity to increase their profit margins,” Baltin said. Some caution future growth might be tied to the overall health of the economy. Growth may be slow for the midmarket, but can stay the same for the luxury market, Taylor said. Matheson-Shedrick is more optimistic about the future, citing past economic downturns and their relationship to hotel spas. “The potential recession will slow down growth. Growth will continue, but not in the double digits, as it has in the last few years,” Matheson-Shedrick said. In the past, hotels with spas experienced quicker recovery than those without spas, according to Matheson-Shedrick. In the 2001 recession, for example, people simply went to hotel spas closer to home. hmm@questex.com Kristopher Reed contributed to this article. Meet the Money 2008 ® w w tm Gateway to Hotel Finance CIRCLE NO. 115 Debt and Equity Financing for Hotels ow ister N Regww.jmbm.com/mtm at w Limited Seating Green Valley Ranch Resort & Spa Las Vegas, Nevada CIRCLE NO. 112 May 6-8 2 0 0 8 http://HotelMotel.com http://jmbm.com/mtm http://jmbm.com/mtm http://www.sterifab.com http://jmbm.com/mtm http://www.sterifab.com

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Hotel & Motel Management - April 21, 2008 Contents Vista Affirms Fair Franchising Doctrine HOTEC Panel Explores Green Procurement Spa Revenue Drives Overall Profitability Perspective Legal FAQ Sales Clinic Travel Trends Guest Column Trends & Stats Owners and Operators Feel Pressure to Switch to HD Protect and Clean Stone Floors Coffee On Demand Fitness Equipment Experts Weigh New Builds Vs. Conversions Transactions Ad/Edit Index Marketplace Classifieds Checking Out

Hotel & Motel Management - April 21, 2008

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