How investing in spa facilities can boost your hotel business

An up-to-date, well maintained and professionally marketed spa can enhance your hotel business in ways well beyond the direct income it can generate.

While many independent hotels are deliberating about investing in spas, a good number sit underutilised, often poorly maintained and poorly marketed.

The choice to upgrade existing facilities or to create a shiny new spa facility will often boil down to the availability of ready cash to fund the cost of creating it. Many operators like to wait until the cash is available – which in reality can mean missing out on an entire season or very lucrative promotional opportunity. The alternative is to judiciously use external funding to optimise the opportunity sooner rather than later.

How a spa increases customer satisfaction

Whether you charge or not, having a pleasant looking spa can boost hotel revenues in several ways including:

• Creating a competitive advantage against other local hotels leading to increased bookings / occupancy (and reducing the temptation to discount)
• Enhancing the overall guest experience, leading to positive feedback and reviews which are critical to online marketing
• Keeping guests on site, therefore spending their money in your bar, restaurant etc. rather than somebody else’s
• Referrals and recommendations. There is no better source of business than word of mouth from a satisfied customer
• Purchases of spa-related accessories and consumables.

These benefits will materialise even if the spa is an included facility. Of course, it is entirely reasonable to charge for facilities which will provide a more visible and immediate cash benefit.

How a spa generates revenue in ‘quieter times’:

‘Wellness tourism’ is an acknowledged and growing trend in the leisure sector. As the name suggests, wellness tourists are taking breaks specifically for the benefits that a day in a spa can bring, as opposed to seeking it as a nice extra.

Remarkably, Wellness Tourists are estimated to spend upto 130% more than regular tourism. Coupled with an annual growth rate of almost 9% (50% more than regular tourism), it is a market well worth considering.

It may be too early a stage to make a full diversion into this lucrative sector, or indeed your scope for a spa may be a little limited to fully embrace it; however strategically marketing specific packages to wellness tourists can be a great way to optimise occupancy during traditionally quieter periods.

In turn, the clients attracted will become your recommenders and referrers.

How can I fund a spa?

Once you have decided that a spa facility will be financially beneficial to your hotel, the questions arise of when the investment should be made and how it can be funded.

If you are in the fortunate position to have sufficient cash reserves – with no other use earmarked – then you might well want to pay cash. Alternatively, you might prefer the traditional avenue of ‘saving up until you can afford it’.

However, using external funding can enable you to see the rewards of a lucrative spa facility sooner rather than later; ultimately the revenues it creates should far outweigh the cost of funding.

Our quick guide to deciding if the time is right

• Track your enquiries. See if a spa facility is being requested.
• Ask departing guests if a spa is something that would bring them back.
• Monitor local competition for developments in this area. Check directly on competitor websites but also have a look at Groupon, Living Social and other discount sites for spa packages in your area.
• Consider trying some out to evaluate the quality.
• Investigate if there are upcoming landmark local events that might create an opportunity to fast-track an investment. Big sporting events bringing lots of travellers, as do conferences and exhibitions, wedding fairs and more.

Want to talk finance for hotel growth?

Please call Mark on 07932 075754 or email [email protected]