After the recession in 2007, hotels struggled to gain revenue from segments other than room rental until 2014, when an emphasis on spending money in other areas began to take hold. One particular area that saw significant growth was the hotel spa. Let's investigate PKF Hospitality Research's 2015 Trends in the Hotel Industry.
Previously: Spas a Key Factor When Consumers Book Hotels
Hotel spa revenues increased by 5.1% in 2014 alone, with spas operated in urban hotels bringing in a 7% revenue gain. Resort hotel spas, however, only enjoyed a 4.4% increase. While skin care and body work was second on the list for generating 17.1% of hotel spa revenue, it was second to massage services, which generated 54.5% of revenue, making it by far the most lucrative hotel spa department.
With greater power comes greater responsiblity, of course. With the higher numbers hotel spas saw in revenue, they also saw in expenses. Hotel spa operating costs increased by 3.4% from 2013 to 2014, consisting only of labor, goods sold and other operating supply costs. Labor costs particularly took up 57.3% of total department revenue, making them the greatest expenses for hotel spas. Further, from 2013 to 2014, labor costs increased by 2.9%. Costs of goods sold grew 5.3%, with retail sales only growing 4.1%. The silver lining, however, is that all other department expenses were limited to a 0.6% increase.
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Because revenues grew more than expenses in 2014, hotel spa departments showed a 10.5% increase in department profits. Urban spas received a 13.1% bottom-line boost, with resort hotel spas showing a 9.8% profit gain. Resort hotels, however, were more efficient in converting spa revenues to profits than ubran hotels, showing 28.1% against 18.4%.
Industry moves: Grand Hotel Tremezzo Revamps T Spa
After everything is said and done, trends show a bright future for the hotel spa segment. In the coming years, with increased guest counts combined with a growing need for healthy experiences, spa department revenue and profit should continue to enjoy solid gains.
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