Should Hotels Outsource Their Spas?
Yes, it’s True Outsourcing a Spa means losing a considerable chunk of Money for a Hotel! However, one needs to truly reflect and introspect that Chunk of Money is Real Money, and even if it is, then at what cost?
The growing wellness industry clearly indicates the huge potential of spas and wellness centres. And today, Spas are an essential amenity and an integral part of any five-star hotel.
However, with High input costs, having a Revenue centre as a Cost is detrimental irrespective of the Size and its contribution. The efforts required by the Hotel to have a Successful Spa addressing its indigenous industry-specific challenges of People, Products, Processes and Profits vis a vi the Yield made by it is often a Reverse example of the 80-20 Principle for Senior Hotel Management.
Many Hotels and Brands now recognise this and thus find Outsource Spas a more viable option.
Recently a very close friend of mine in a Senior position (Corporate Spa) of a leading Luxury Hotel Brand shared with me, “Megha, at the end of the day, whatever we do, we can not compete with the Revenues of Rooms and F&B and most of the time treated as a stepchild. Moreover, our operational challenges in relation to our size and revenue potential are more of a headache to the support departments, especially HR. And often feel Spa is treated as a recovery department leading to heavy discounting and complimentary sessions. Overall low morale across and a feeling of left out.”
Having worked in a similar situation, I completely resonate with her and understand their exponential decline in numbers.
An outsourced Spa since its core business has the Muscle, Know-How, Inclination, Resources and Commitment to address all the Industry challenges or at least work towards them.
In my Own Brand, Meghavi Wellness, we have evolved too. From a Single Villa Spa to 20+ Outlets in the past Two Years, it made us realise and incorporate a dedicated Marketing team of 10 Teams.
Members Call centre for inbound and outbound calls, National Digital Marketing Budget, Intelligent Spa software, Per Unit Economics, In House Training Academy, Feedback Escalation, Centralised Purchase & Vendor Management, Recruitment Department, Audit, Compliance and Admin departments, Maintenance and Project team, R&D department etc. to name few. And every single KRA and KPI defined is to enhance Guest’s Spa Experience and Increase Spa revenue, thus driving more profits.
A typical Spa Therapy room revenue varies from 1.5 Lakhs to 2 Lakhs based on Hotel dynamics. In a very special case, it can cross 3 Lakhs and More with a Gross profitability of 60% (that does not involve Rental and HLP and other ancillary costs). Compared to Hotel Rooms, the Sheer capacity, dynamic room rates and profit margins of 80% and more make Hotel Rooms and F&B a major Focus area and hence Spa typically gets on a rear-end seat.
In light of the above, the efforts required to optimise a Spa with Hotel resources are not economically wise and viable. Unlike Spa Partners like us, since this is our Bread & Butter, these efforts are required and tied to our results.
To sum it up may, be at the surface level with a Vendor like us. It may appear parting with a chunk ofNOTIONAL REVENUE. However, aconsistent, assured revenue and quality spa Experience without liabilities is a preferred and optimal solution in the current asset-light approach of hotels.
Discover the power of outsourcing your spa needs with Meghavi Wellness. With our dedicated team and expertise, we handle all industry challenges so you can focus on your core business.
- Delhi NCR