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Revenue management for spas — a win-win for spa operators and guests
By Frank Pitsikalis 19 Jul 2016
Frank Pitsikalis is founder and CEO of ResortSuite
Like many sectors of the travel industry, spas have perishable inventory, says Frank Pitsikalis, founder and CEO of ResortSuite, but yet most don’t employ a revenue management system. In an exclusive Thought Leader column for Spa Opportunities, Pitsikalis suggests using dynamic availability can offer a solution that doesn’t mean changing your spa menu – and can be a win-win situation for everyone.

The airline industry, hotels and car rental companies would not dream of operating without revenue management as a core business practice.

Like the spa industry, they all have perishable inventory. If a day goes by and a hotel doesn’t sell a room, that revenue opportunity is gone forever. If a plane takes off with a seat unfilled, it is a lost revenue opportunity — the plane’s fixed costs to operate are still the same and the variable cost to fill one more seat is very low.

These are perfect candidates for revenue management and these industries do it masterfully. But why not the spa industry? Every hour that goes by where a treatment room is unfilled is a lost revenue opportunity.

The spa industry, like the others mentioned, has periods of variable demand. Sometimes the spa is empty, and at other times, the demand is so high that even if the spa had triple the number of treatment rooms, they could fill them all.

Yet the spa industry, with very few exceptions, continues to book all the services that they offer – at the same price – during their high-demand periods.

My philosophy is that people in the spa industry immediately think, “we have a published menu and it would be unethical to change the price” (known as dynamic pricing), and they dismiss the strategy before any further consideration.

But what if you could use dynamic availability instead? An example might be shortening your menu (to higher margin services) or not offering 90-minute or longer services during peak times – you will serve more guests in the spa, creating more retail opportunities, and likely earning more profit per minute on a shorter service than a longer one. You can do all this with the same published menu you have today.

The time has absolutely come that we reach our financial potential as an industry. The ironic thing is that airlines now serve a much wider demographic than before revenue management. So you can do right by your business and do the right thing for your guests too.


News
1 to 12 of 7448 news stories
10 Jul 2020
England and Scotland have become the most recent countries to announce their spas will reopen, following a hard-fought campaign by industry associations, operators and the media. Spas will be permitted to reopen from Monday 13 ... More
09 Jul 2020
Luxury country house hotel, Beaverbrook Hotel and Spa, in Leatherhead, UK, has curated a series of wild wellness experiences to assist with both emotional and physical wellbeing following its reopening on 4 July. The new ... More
09 Jul 2020
WTS International has snapped up Todd Walter as its new president, following the demise of Mynd Spa & Salon – formerly The Elizabeth Arden Red Door Salon & Spa – where he was CEO. Walter ... More
08 Jul 2020
Healing Hotels of the World is hosting a virtual Master Class with wellness experts from luxury destination spas, Rancho la Puerta and The Farm at San Benito. Sarah Livia Brightwood, president of Rancho La Puerta ... More
08 Jul 2020
The government of Dubai has announced that spas and massage centres across the emirate can now open for business following the coronavirus lockdown on 15 March. It revealed the news on 3 July in its ... More
07 Jul 2020
According to CEO of Aromatherapy Associates (AA), Anna Teal, online retail has been crucial for business following enforced closure of spas. Speaking exclusively to Spa Business, Teal shared how the company has pivoted its online ... More
07 Jul 2020
The Global Wellness Summit (GWS) has switched venues from Tel Aviv to the US following travel disruption due to the pandemic. The event will now take place from 8-11 November 2020 at The Breakers in ... More
02 Jul 2020
Planning permission has been submitted for a naturally filtered thermal experience and botanical spa and wellbeing hub on a dutch barge moored in West India Quay, London. Conceptualised by bodywork therapist Nico Thoemmes, the Water ... More
01 Jul 2020
As a wave of spas reopen around the world, it’s clear the industry is going to need to be creative to cater to new consumer needs which will likely focus on prioritising health. In light ... More
02 Jul 2020
The UK spa, beauty and wellness industry is in uproar following a recent Prime Minister’s Question time where the urgent matter of reopening the sector reduced MPs to laughter. William Wragg, MP for Hazel Grove ... More
01 Jul 2020
Kathryn Moore, founder of Spa Connectors, has announced the launch of the Hall of Wellness Awards (HOW Awards) to recognise those excelling in their fields in the global spa, beauty and wellness industry. The awards ... More
30 Jun 2020
Italian destination spa, Borgo Egnazia, has reopened to guests and updated its popular Happiness Break to begin at home, with a new set of pre-arrival digital consultations and classes. Borgo Egnazia’s team of therapists has ... More
     
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Jobs   News   Products   Magazine
NEWS
Revenue management for spas — a win-win for spa operators and guests
POSTED 19 Jul 2016 . BY Frank Pitsikalis
Frank Pitsikalis is founder and CEO of ResortSuite
Frank Pitsikalis is founder and CEO of ResortSuite
Like many sectors of the travel industry, spas have perishable inventory, says Frank Pitsikalis, founder and CEO of ResortSuite, but yet most don’t employ a revenue management system. In an exclusive Thought Leader column for Spa Opportunities, Pitsikalis suggests using dynamic availability can offer a solution that doesn’t mean changing your spa menu – and can be a win-win situation for everyone.

The airline industry, hotels and car rental companies would not dream of operating without revenue management as a core business practice.

Like the spa industry, they all have perishable inventory. If a day goes by and a hotel doesn’t sell a room, that revenue opportunity is gone forever. If a plane takes off with a seat unfilled, it is a lost revenue opportunity — the plane’s fixed costs to operate are still the same and the variable cost to fill one more seat is very low.

These are perfect candidates for revenue management and these industries do it masterfully. But why not the spa industry? Every hour that goes by where a treatment room is unfilled is a lost revenue opportunity.

The spa industry, like the others mentioned, has periods of variable demand. Sometimes the spa is empty, and at other times, the demand is so high that even if the spa had triple the number of treatment rooms, they could fill them all.

Yet the spa industry, with very few exceptions, continues to book all the services that they offer – at the same price – during their high-demand periods.

My philosophy is that people in the spa industry immediately think, “we have a published menu and it would be unethical to change the price” (known as dynamic pricing), and they dismiss the strategy before any further consideration.

But what if you could use dynamic availability instead? An example might be shortening your menu (to higher margin services) or not offering 90-minute or longer services during peak times – you will serve more guests in the spa, creating more retail opportunities, and likely earning more profit per minute on a shorter service than a longer one. You can do all this with the same published menu you have today.

The time has absolutely come that we reach our financial potential as an industry. The ironic thing is that airlines now serve a much wider demographic than before revenue management. So you can do right by your business and do the right thing for your guests too.
MORE NEWS
Jubilation as spas set to reopen in England and Scotland following gruelling lobbying campaign
England and Scotland have become the most recent countries to announce their spas will reopen, following a hard-fought campaign by industry associations, operators and the media.
Wild wellness: Beaverbrook Hotel and Spa develops nature-based wellness experiences
Luxury country house hotel, Beaverbrook Hotel and Spa, in Leatherhead, UK, has curated a series of wild wellness experiences to assist with both emotional and physical wellbeing following its reopening on 4 July.
Todd Walter appointed president of WTS
WTS International has snapped up Todd Walter as its new president, following the demise of Mynd Spa & Salon – formerly The Elizabeth Arden Red Door Salon & Spa – where he was CEO.
Wellness specialists from Rancho La Puerta and The Farm to host virtual masterclass on healing journeys
Healing Hotels of the World is hosting a virtual Master Class with wellness experts from luxury destination spas, Rancho la Puerta and The Farm at San Benito.
Dubai government gives green light for spas to reopen
The government of Dubai has announced that spas and massage centres across the emirate can now open for business following the coronavirus lockdown on 15 March.
Anna Teal: “Spas need to consider re-evaluating the role of the therapist”
According to CEO of Aromatherapy Associates (AA), Anna Teal, online retail has been crucial for business following enforced closure of spas. Speaking exclusively to Spa Business, Teal shared how the company has pivoted its online offering and how the industry can capitalise off demand for online retail.
+ More news   
 
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bbspa&partners s.r.l.

bbspa operates internationally thanks to its large network of partners, with a special focus on Eu [more...]
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DIARY

 

10-11 Jul 2020

IFBA Live

The Slate at Warwick Conferences, Coventry, United Kingdom
16-17 Jul 2020

APSWC Round Table 2020

Naman Resort, Da Nang, Vietnam
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Hitchin, Hertfordshire SG5 1DJ Tel: +44 (0)1462 431385

©Cybertrek 2020

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