How to Increase Revenues for Your Spa Business

The ability to take advantage of a well-structured menu of spa services (low-, medium- and high-margin services) is essential for increasing revenues. Revenue management techniques, such as dynamic availability and the reduction of the list of available services during peak hours, can have a tremendous impact on profitability. Performance management is the process of adjusting the price of a product or service in response to market factors such as demand or competition. It is a common practice of airlines, which were the first to implement it in the 1980s.

When the plane fills up fast, prices increase. When it isn't, prices are lower. It is most commonly applied when there is limited or limited capacity, such as seats on the plane, or in the case of a spa, the availability of service providers. With a spa management software that offers performance management capabilities, you can set up the system to adjust prices in response to market conditions. You can also adjust prices in other ways, such as charging different prices for advance bookings vs.

walk-ins. But you should do some research to find out what your customers will accept. Robert Shumsky, professor of operations management at the Tuck School of Business in Dartmouth and an expert in performance management, told Book4Time in an interview that performance management should be done using data and market research, rather than simply inventing things as you go or copying what your competitors are doing. If your spa doesn't have online and mobile bookings, you're definitely leaving money on the table. Add-ons or spa upgrades are another way to directly increase your average ticket and generate additional revenue.

Look to offer a wide selection of additional options and allow guests to select from a list of upgrades that can be added to their service without increasing the appointment time. Essential oils, scalp massage, eye or lip treatment, and enhanced masks or exfoliation options, such as dry brushing, are great options. Make these upgrades available on your online booking site so that the guest has the option of adding them to your service directly at the time of booking. In addition, this could be part of your admission process and something that your therapist can offer to the guest as part of a consultation before the start of their treatment. Give your therapists incentives in terms of the number of add-ons or enhancements they sell, or their overall average entry, and create an internal competition that makes it fun for everyone.

Here are our best ideas for generating income in the spa:

• Online Bookings: If you haven't joined the 21st century yet, now is the time to do so and offer your customers the ability to book their services online. Although people are spending more and more time on their phones, they actually make fewer phone calls than ever before (that feeling when the screen time notification reaches OUCH).
• COVID-19 Tax: There is no way around it; you will have additional costs when you reopen. Cleaning during this time is crucial (and expensive). Many companies are opting for a “COVID-19 tax”.

  Rather than changing prices for individual services, these salons and spas are adding a small percentage to all services. Consider something around 5% or less.

• Customize Experiences: Find ways to make your customers' experiences special. He knows their names, knows their tastes and knows how to please them. Encourage your employees to customize the spa experience for each customer, whether they are that customer who loves extra towels or who doesn't like to stay alone too long.
• Advertise Locally: Once a customer believes that you are taking special care of it, you have largely eliminated your competition.

  For local day spas or those looking to attract more local guests, it's important to advertise on social media and make sure the booking link is available through your bio on all your social media pages.

GOCO Hospitality's sister company, Horwath HTL Health& Wellness, has published a white paper describing the many ways in which spas can assess their profitability, improve revenues and control expenses. Spas are uniquely positioned to promote and encourage many different aspects of health and wellness as this trend continues to increase. As salons and spas reopen, they cannot operate at the same capacity they had before the coronavirus pandemic. As independent day spas are catching up with hotel spas by offering high-quality services but at a lower price, GOCO Hospitality believes that unique heat and water experiences remain one of the key points of differentiation that a hotel or resort spa can offer. Research has shown that this increase in market growth is not only due to increased services and prices in the industry, but is more closely aligned with consumer interest in health and fitness as a way to increase body image concerns and improve health physical and mental. A well-designed and structured menu of spa services can help increase flexibility and schedule resources that maximize spa outcomes. Keep in mind that this figure includes data for nearly 22,000 spas of different sizes, so if you're running a small business, your income can be very different.

So what is your spa's position in terms of average spa income per day? How are you up to the competition? Knowing this can help you see how well you're doing and set goals for the future of your business. As such, spas are no longer a side outlet that simply works, but a space that should and should be highly profitable. We have clearly seen the spas transition from “pleasant to have” complementary facilities to well-established core elements of the service platform and guest experience.