Focus: KPI for Spa Revenue Management
04 October 2011
The four most important KPI to measure Spa performance are:
1. Spa Utilization Ratio (SUR)
Do you know what the Spa Utilization Ratio or Occupancy is? Really, what was yesterday’s utilization level of your spa? And how about last week, month, or year to date? Are you measuring occupancy levels of each of treatment room by hour, half a day, and full-day?
To calculate the utilization ratio of your spa you need to define time and space units to be measured. For example, if a spa has 5 treatments rooms and is open from 10.00am till 8.00pm. And during the week you have sold for 250 hours of treatment. The occupancy will be 71,4%. The utilization ratio is calculated as follows:
SUR = hours of treatment sold / hours of treatment available
250 hours of treatment sold / (10 hours * 5 treatment rooms * 7 days) = 71,4%
2. Average Treatment Rate (ATR)
The Average Treatment Rate is the revenue generated divided by the number of treatments sold. The Average Treatment Rate will vary upon the level of demand, day of the week, type of treatments sold …The ATR is a good indicator when using a dynamic pricing strategy.
3. REVPATH
REVPATH stands for Revenue Per Available Treatment Hour, which is calculated by the total revenue generated by treatments, divided, by the number of treatment room hours (treatment rooms multiplied by numbers of hours opened).
Treatment Revenues
Treatment Rooms x Opening Hours
Treatment Rooms x Opening Hours
It is basically the same as REVPAR for your hotel rooms.
Based on the REVPATH results, you will be able to identify trends per of the day of the week and time of day. It will enable you to develop a strategy to sell premium products during specific time slots of high demand or offer a promotion to appeal to clients during lower demand hours.
4. SREVPOR
Spa Revenue per Occupied (hotel) Room is an important indicator to measure how many of your clients, staying in your hotel rooms, are utilizing the Spa. It identifies the relation between the occupancy of the hotel and the results of the Spa. Depending of the season and also depending of your hotel client mix, the contribution to the spa may vary. An interesting KPI that helps you understand the ratio between internal and external utilization levels.
Other Key Performance Indicators that can be useful are:
- Total revenue per client TREVPEC
- Revenue per square meter TREVPSQM
- Therapist Productivity
All these statistics can be calculated from dataextracted from your Spa Management System. You will have to set-up a structural process to analyze the data and KPI, to identify trends and develop a smart Spa Revenue Management Strategy.
Source: Xotels
Pictured: The spa at The Mira, Hong Kong
