Hoteliers increase spa offerings to ride revenue wave

Posted on by Hotel Leisure Advisors

STR’s HOST report and CBRE’s report on hotel spa industry trends show that spa revenue growth surpassed room revenue growth in 2015. 

Published by: Danielle Hess/Hotel News Now
Published date: January, 2017

Hotel spas are bringing new, refreshing products and treatments, and creating packages to bring in business from guests and the local community. For many hotels, these efforts have led to increased spa revenue growth.

Both STR, HNN’s parent company, and CBRE have released reports looking at data from 2015, which shows that spa revenue growth surpassed room revenue growth at hotels in each of the surveys.

Joseph Rael, director of financial performance, consulting and analytics at STR, said STR’s HOST report includes revenue for 322 hotels. The report shows that total spa revenue increased 4% in 2015 and room revenue increased 3.2%. He added that the majority of hotels in the survey are luxury properties, and that the greatest revenue increases came from salon revenue.

The 2016 edition of CBRE’s “Trends in the Hotel Spa Industry” report shows that spa revenue at hotels in the U.S. increased their revenue by 5.6% while room revenue rose 3.3%.

Mark VanStekelenburg, managing director of CBRE Hotels’ Northeast practice, said both urban and resort hotels saw increases in spa revenue growth, and that many of these spas brought in local products, which helped hotel spas on “the marketing side and on the revenue per treatment side.”

“We saw back in 2008, 2009, the effects of what we’ve dubbed as the AIG affect, where even on the corporate side, add-on spending for spas, for golf, things outside of the traditional food and beverage and rooms at hotels, there was a significant drop off in those,” VanStekelenburg said. “We’ve seen a lot of that come back.

Refreshing spa offerings
To bring in both local customers and hotel guests, sources said they try to stock new products and offer treatments and strategically priced spa menu items.

Kristen Pryor, GM at the Westin Riverfront Resort & Spa in Avon, Colorado, said the hotel’s spa revenue grew 16% in 2016 compared with 2015 while room revenue grew 10%. Pryor added that when looking at spas, pricing strategies have helped determine adjustments.

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