Hotel Spa Departments Generate Healthy Profits for U.S. Hotels

According to the 2015 edition of the PKF Consulting|CBRE Hotels (PKFC) report Trends in the Hotel Spa Industry, hotel spa department revenues increased by 5.1 percent in 2014, while spa department profits grew 10.5 percent. Spa department profit margins averaged 25.4 percent for the overall sample, and resort hotels (28.1 percent) were more efficient than urban hotels (18.4 percent) in converting spa revenues to profits. "The benefit of having a hotel spa can go beyond the direct financial contributions of the spa department,” says Andrea Foster, managing director PKFC and director of the firm’s spa and wellness consulting practice. “When we compared the performance of spa properties with comparable hotels in PKFC’s Trends in the Hotel Industry database, we found that the spa hotel sample had a higher ADR (spell out) in 2014 and was able to increase its room rates to a greater degree. This does not suggest causation; rather, it suggests a reasonable conclusion that guests find greater value in properties that have more extensive amenities and services available, thus creating the ability to increase rates to a greater extent.”

Spas also can help position a property as a healthy hotel if it also offers beneficial lifestyle options within other departments—rooms, food and beverage, retail, and more—that support guests’ desire to maintain healthy routines. “More and more travelers want to maintain their fitness and nutrition routines while on the road,” says Foster.

Favorable economic and demographic trends foretell a bright future for hotel spas as occupancy rates at the upper-priced lodging segments in which most hotel spas operate are forecast to achieve all-time record levels from 2015 through 2017. Says Foster, “Increased guest counts, combined with a growing desire for maintaining healthy lifestyles and enjoying unique experiences while traveling, should result in a continuation of solid gains in spa department revenues and profits.” For a full copy of the report, visit www.cbrehotels.com. 

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