Spa Revenue Management

Abstract

In principle, spa managers should be able to apply revenue management to spa operations. To do so, however, requires a revision in the way most spas traditionally have viewed sales. Most spa managers track appointments and customer needs, but instead they need to focus specifically on the time element involved in their services. A time-related measure, revenue per available treatment-hour (RevPATH), integrates the price and duration of the treatment as factors in the revenue calculation. Certain elements of current-day spa practice, such as discounting and managing treatment duration, carry the seeds of revenue management, but those are often implemented as tactical measures during particularly slow or busy times. Few spas have established the necessary strategic approach to assemble those tactics into a coherent revenue management strategy. This report establishes a framework for implementing a spa revenue management strategy and sets a practical road map for its execution.