Prepaid Tickets for Spa Services?

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Categories: Trend Watch
Spas and restaurants have a lot in common; clients have an “appointment” for a particular time, enjoy their meal or services, interact with staff in a way that will hopefully increase the amount of the ticket (retail, wine & dessert) and generally enjoy themselves.  Their likelihood of returning is based on how well the entire experience went; from making the reservation, to enjoying the service or meal, to the rapport, or lack thereof, that was felt with the staff.  Because of these industry parallels, I subscribe to Restaurant Hospitality magazine, and I always get some interesting tips.

In a recent issue, I came across an article on Chicago chef and restaurateur Grant Achatz that I just had to share.  This young man has worked hard to rise to rarified heights in the restaurant industry; his Chicago restaurant, Alinea, was just listed at #7 on a list of the best restaurants in the WORLD (making it the highest-ranking restaurant in North America) along with receiving a 5th James Beard award (and along the way surviving a bout with cancer of the tongue).  But rather than resting on his accomplishments, Achatz has revealed plans for a new, second restaurant with a revolutionary operating model.

The restaurant will be called Next, and it will serve four different menus per year, which will be based on great moments in culinary history, or in the future.  The first menu will feature authentic interpretations from Paris in 1912.  But the really interesting part is that the menus will be prix-fixe, and will be priced according to the day and time they are served.  For example, the menu price may range from $40 to $75, with Saturdays at 8pm being on the high side, and a weeknight at 9:30pm on the low side.  Plus, patrons will purchase pre-paid tickets to eat there, much like purchasing a ticket to the theatre or to a sporting event, and the tickets will be fully inclusive of all charges, including gratuities.  Wine and beverage pairings will be charged supplemental prices starting at $25.  The tickets will be available through the restaurant website, and they are designing their own software to ensure a top-notch customer experience.

I’m sure there will be wrinkles in the plan, as with anything new, but I can’t wait to see how the concept plays out.  The owner gets the money up front, and will have a much better idea of exactly how many diners to plan for each night.  Having a specific menu, along with the pre-sold tickets, will dramatically decrease waste.  And he won’t have to pay people to take reservations anymore.  Says Achatz, “At Alinea, we now pay 3 or 4 reservationists all day long to basically tell people they can’t some to the restaurant.”  Of course, some patrons obviously do get to make reservations, but the combination of the demand of a popular restaurant with technology that already exists make this a really interesting concept.  He’ll still have customer service staff, but he’ll need less of them.

It made me ponder how the same kind of approach could work in a spa.  Prepaid tickets for spa visits, priced by the demand for the time requested?  Why not; clients already understand how this works for a Broadway show or seats to baseball game.  Who knows how the upsell component will work out; maybe a spa wouldn’t sell as much retail this way; on the other hand, maybe we’d sell more, since the client would only be paying for the add-ons at the time of visit, they might be more willing to spring for high-quality body lotion.  I know, I can hear you saying “It’s not personal enough!”  A spa experience does have many more touchpoints than a dinner out, and having a clientele that is mostly undressed certainly changes the experience.  But, I always love to hear about new concepts, and perhaps there is something to be learned from this.  I’ll keep you posted on what I hear as Next evolves.

I’d also love to hear comments below on whether you find this interesting and are curious to learn more, or if you think prepaid tickets for spas visits will NEVER work in any form.

Comments

I read reviews on Yelp about clients who call spas to use the other half of their Groupon. The spa gives them the blow off by putting them on hold for a really long time until the client decides to hang up. Groupons are like a two for one deal. Say two massages for the price of one at $80 (like a prepaid spa ticket!). The spa seems eager to book the first treatment, but when the client tries to redeem the other treatment they are given the run around when trying to make that second appointment.

We have opted not to do a Groupon program. We did Spa Week and that was enough.

I do, however, like the idea of charging more for massages and facials on the weekends when the demand is higher. It's kind of like how the hotels do it. You pay more for a room during the weekend when they are at capacity.

Thanks Lisa! I too am of the belief that Spas are remarkably similar to F&B in so many ways, including Staffing profiles. It helps in drawing parallels to Owners/ General Managers on how to more effectively lead the Spa efforts ~ I like the idea of using Yield Management tools and any other 'profit creating' ideas with Spa Revenues - though trying something new or more strategic can be scary for many. I have been suggesting that Spas located in seasonal locations or tourist locations try pricing by the season, ie high season and low season pricing ~ if Rooms can do it why not Spas? Any best practices from other areas can and should be, at least trialed or tested since creating revenue is entirely more fun than cutting costs.

I think this is a SPECTACULAR idea (Lisa...I think you and I discussed this briefly before). Unfortunately, I don't picture this catching on quickly, or at all. This would work well with a good yield management system, but spas are hesitant to incorporate that, as well.

I think it is a very interesting idea. Many businesses already do this in reverse by discounting last minute unsold "inventory” of hotel rooms and airline seats. Some spas do it as well. Weekend and other high demand time could simply be a little more expensive as compared to "matinee" pricing during the day. This is a better idea than “discounting.”

I find this concept very interesting and would not at all be opposed to it. I manage a spa in Las Vegas. We end up having to discount services to attract guests during our slow times.

I wonder, however, how you would go about paying your services providers for the different costs in services. My providers will want more money if guests are being charged more...or will they just make it up in gratuity?

I think spa's could see an increase of up-sells per visit. If a client has prepaid for a visit, it is much easier for the client to justify and pay for the add-ons since the price "appears" lower for their actual visit at the spa.

But, I think this needs to be packaged differently. Psychologically, there's equity built around "tickets" and venues with tickets, and the image doesn't necessarily fit the experience of a spa. This would need to be presented differently - not like buying a ticket to a baseball game or a show.

@ Cara - I'm wondering if their strategy is the same as the Gift Card industry - sell, and hope customers will not redeem the card. And if they do, there's plenty of fine print to chew through.

What I love about this idea is that it's a completely different approach to the business model, and if it doesn't manage to create revolutionary change, it could certainly spark evolutionary change, getting us to question more of our assumptions about the industry.

I think spas that offer a highly differentiated experience would have the best chance with this model. When you dine in Michelin 2+ star restos, you're not as much in control, and not really telling *them* what you want: they're offering you a highly orchestrated experience (i.e., it's a chef's tasting menu with wine pairing or a prix fixe.) You pretty much surrender to the chef.

I could definitely see this in a resort or destination setting, where people are more willing to surrender!

I'd like to see a spa that takes the opposite approach. In other words, no appointment necessary just come in at any time and they will have something for you. I think one of the biggest hurdles to going to the spa is having to plan it in advance in stead of it being something you can do when you find yoruself with a moment. Pre-paid tickets for a movie or a concert make more sense because they are only available over those dates and so you have to commit if you want to go. It will be great to see how the restaurant concept goes. Spas can learn a lot from the experiments of other like industries. Great article!