Should Hotels Outsource Their Spas?_

Yes, it’s True Outsourcing a Spa means loosing a considerable chunk of Money for a Hotel! However one needs to truly reflect and introspect is 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 integral part of any five star hotel.

However with High input costs, having a Revenue center as a Cost is detrimental irrespective of the Size and it’s contribution. The efforts required by Hotel to have a Successful Spa addressing its indigenous industry specific challenges of People, Product, Process and Profits vis a vi the Yield made by it is often a Reverse example of 80-20 Principle for Senior Hotel Management.
Many Hotels and Brands now recognise this and thus find Outsource Spa a More viable option.
Recently a very close friend of mine in a Senior Most position (Corporate Spa) of 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 step child. Moreover our operational challenges in relation to our size and revenue potential is more of a headache to the support departments especially HR. And often I feel Spa is treated as a recovery department leading to heavy discounting and complimentary sessions. Overall a 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 it’s their core business has the Muscle, Know How, Inclination, Resources and Commitment to address all the Industry challenges or atleast work towards them.
In my Own Brand Meghavi Wellness we have evolved too. From a Single Villa Spa to 20+ Outlets in past Two Years made us realise and incorporate a dedicated Marketing team, 10 Team
Members Call center 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 with a sole purpose of Enhanced Guest’s Spa Experience and Increased 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 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). When compared to Hotel Rooms the Sheer capacity, dynamic room rates and profit margins of 80% and more, makes Hotel Rooms and F&B a major Focus area and hence Spa typically gets on a rear end seat.
In light of above the efforts required to optimise a Spa by Hotel resources is truly not an economically wise and viable solution. Unlike for 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 surface level with a Vendor like us it may appear parting with a chunk of NOTIONAL REVENUE however a CONSISTENT, ASSURED Revenue and QUALITY  Spa Experience without  LIABILITIES is a Preferred and Optimal Solution in the current Asset Light Approach of Hotels.

Question to ask what is your Preferred bet?

Love and regards,

Related posts

Leave a Comment