
High operating expenses combined with increased “discounted” competition with day spas have painted hotel spas into a financial corner, making tight margins skin tight. Given that the average hotel spa can charge a premium of 50 to over 500 percent over the local day spa and still only achieve a departmental profit of somewhere between 9% and 15% is not only staggering, but leaves little room to navigate into more profitable seas. The global economic melt down that started in the latter part of the 3rd quarter 2008 and the tenuous progress that continues today has the potential to make a difficult situation dire. So the question at hand is how should a hotel or resort enhance, expand or reposition their spa and how best can they justify their “enhanced pricing” and still remain competitive? READ MORE