What Can a Spa Do for the Hotel?

months, it seems as if, wherever one turns, hotel owners and hotel operators are adding spas to their package of products and services. From the most luxurious hotels such as Mandarin Oriental and Four Seasons all the way to Butlers and Center Parks, everyone is getting in on the act.

Hotel branding companies such as Star wood have added spa brands to their portfolio and we've got hotel brands like Six Senses which have a spa as a core element of the offer.

In the 1980s, every hotel seemed to feel the need to add water beds, faxes and a mini-bar into the bedrooms and in the 1990s every hotelier felt obligated to add a fitness room, outsource food and beverage, implement branded breakfasts and later internet connectivity and game joysticks. In this decade, we've seen a headlong rush to add flat screen TVs and free WIKI - and now spas. As the historic examples illustrate, sometimes such fashionable elements of product or service become embedded in the core expectation of guests and remain permanent features in brand standards. But some trendy items prove an expensive side show in the long term. Are spas here to stay as a core element of hotels or are they a passing fad?

Some recent assignments have allowed us to research the matter and to form some tentative conclusions. Adding a spa typically represents a very considerable capital expense and usually considerably more per square meter than the investment in an equivalent space devoted to bedrooms. The treatments that are sought are subject to quite rapid change as fashions come and go making the requirement to frequently change and refashion the treatment rooms. This is a business that needs a large capital injection up front and the ability and willingness to inject further capital fairly frequently.

At the same time, the service that is being offered is very labor intensive. There is typically a one-on-one relationship between the customer and the treatment provider and with service being offered seven days a week for ten hours a day or more; the staffing cost implications are considerable. The spa business can be characterized as one that has both a high capital and high operating cost.

So the first question that needs to be asked is whether adding a spa to the hotel will better enable the hotelier and the brand to add to the lifetime value of existing guests and segments and/or significantly attract new segments either from competitor hotels or competitor locations? We believe that this can only be answered by robust research.

Our experience is that there is a lot of 'noise' but actually not a great deal of valid research findings available in the public domain. There is no shortcut and a serious investor needs to commit time and energy to researching the specific market under analysis. While in many situations the spa will serve the in-house population, there will be examples where the spa can be a tool to serve the local business and/or residential population better. For both the internal and external populations, adopting a well-known brand for the spa may be an important element in attracting and reassuring the market.

There is no template but it seems that the core income stream will be from treatments. Setting the price of a one-hour treatment at the level that the market will bear and using the same yield management techniques (fencing rates, volume discounts, packaging, advance purchase discounting, etc.) as are employed elsewhere in the hotel to sell hotel rooms (and on the golf course to sell golf rounds) should ensure that revenue is maximised for each of the one-hour slots available for sale in each treatment room each day.

Membership income may not be the largest income stream but it will be important to have a large enough membership to offset the peaks and troughs of hotel occupancy, yet a small enough membership so that hotel guests can be offered and they can take up packages that include spa elements. Membership income is usually made up of two elements - an initial signing on fee and an annual fee. Local demographics and other factors will determine the rate of churn in membership and the signing-on fee can be a significant element of long-term value.

Our findings suggest that when the investor injects the right amount of capital recognizing the revenue that can be earned and the profit generated, a spa in a hotel can indeed contribute to long-term value. The savvy investor will avoid developing spas that are too large, too expensive, in the wrong hotel business or the wrong town, with the wrong number of treatment rooms or offering the wrong treatments, unbranded or not operated professionally, with inadequate regard to health and safety legislation.

Cross-sell to Provide Service in the Hotel Industry

Guests of hotels and resorts at the top end of the hospitality range of properties are being under-serviced. The impact is felt directly on the top line of sales and potentially indirectly through return visits.

The under-servicing is manifested at the organization level through low levels of up-selling and cross-selling. Most hospitality staff do not see the value in cross-selling and up-selling for themselves or for their guests.

However, research by The Forum Corporation of North America confirmed that 88% of customers value being advised on products and services that better meet their needs. Further, 73% are interested in hearing about new products and services and 42 percent buy "sometimes" or "frequently"

The hospitality industry more than any other, has segments which desire to have their wants satisfied as well as their needs and appreciate an appropriate cross-sell or up-sell.

Guests using four star and five star resorts and hotels consist of three basic segments:

- Leisure (tourist) guests

- Conference guests and

- Business guests

The needs and wants of the guests in each case go beyond the provision of somewhere to sleep, somewhere to eat and somewhere to conduct meetings.

Leisure guests at a resort or hotel clearly want to spend time away from their normal environment. Otherwise why would they come? They need good accommodation, pleasant staff, a variety of food experiences and efficient and effective service.

They want, however, to experience many different things which can be retained as a pleasant memory to be recounted amongst friends and family. For leisure guests a stay at a resort or hotel is not just about relaxing but about bragging rights which build their self esteem. They may want, for example, to have a dining experience that is significantly different from anything they would get at home.

Except for reservations staff and some front office staff, hotel and resort staff do not know enough about the services the property they work in provides to be able to advise leisure guests about the services that are available.

Similarly, conference guests need efficient handling of their conference sessions. Audiovisual must work first time, every time. Refreshments must be available at the time of a break commencing. An ability to be flexible in meeting changed break requirements is very desirable. Planned excursions and events must be executed smoothly.

Individual conference guests, however, often have further wants. Guests may want an upgrade in the wine package that is served with dinner. Guests as individuals may want, but be unaware of, the facility to provide a massage. Guests may want to play a round of golf after the conference is completed.

Most staff at a resort/hotel do not bring to the attention of a conference guest extra services that are available. Sometimes this is fulled by a fear of doing the wrong thing by the conference organizer.

Conference organizers will have established rules about what is allowable as an expense or not. However, staff should not feel precluded from informing conference guests about the services provided by the resort/hotel.

The decision by conference guests to use other services is separate to being informed about their availability.

Business guests have needs and wants somewhat of a combination of a leisure guest and a conference guest, with some additional needs attributable to carrying on their daily business whilst out of the office, often in another state or country.

Once again, however, most staff in a hotel/resort do not know enough about the property's services to be able to cross-sell or-up sell to guests from the entire range of segments.

In addition to not knowing enough about the products and services that the hotel/resort sells, hospitality staff generally have two further barriers to cross-selling and up-selling.

They believe that guests do not want to be sold the services.
Most hotel and resort staff either come from a backgrounds or are of an age where attending four and five star resorts/hotels for an extended visit is not within their financial reach.

Staff will judge what a guest wants or needs based on their own background. In doing so, they determine that guests will not want to buy before trying to sell.


They do not know how to cross-sell and up-sell
Cross-selling is not difficult, but does have two basic principles supported by research.

Those principles are:

- Satisfy the guest's initial request for service

- Only cross-sell products and services related to the guest's needs established by sing probing questions during their initial request for service

- Focus on the guest needs describing how the additional product or service will benefit them

To improve the perception of customer service, top line sales and bottom line profits, hospitality staff need to be proactively trained in and tested on the:

- Products and services of the property,

- Asking probing questions

- Servicing the needs and wants of the segments attending the property and,

- Cross-selling of products and services

Hotels: The Good, The Bad and Ugly

Millions of hotels around the world, the hotel industry is certainly very competitive. There are hotels charging thousands of pounds per person, per night - catering purely for the rich, famous and lavish. Yet on the complete opposite end of the spectrum, there are 100% Eco friendly hotels, built towering up in trees, relying on nature to provide everything needed. All sorts of hotels can be hugely successful in their own right, constantly booked up and praised by all.

However for every successful hotel, there are many more unsure, unsuccessful and failing hotels, struggling on day by day, praying for something to come along and magically turn them around. Speaking to anyone around the world with a bit of traveling experience will undoubtedly have a few amusing anecdotes or terrifying tales about previous encounters with hotels from hell.

Unfortunately for the smaller, independent hotel, it is very easy to get sucked into vicious cycles where customers are be put off by dreary and drab decor and slightly run down exteriors. Yet due to the lack of custom, owners are skeptical or nervous about taking out risky loans in order to carry out refurbishments. It is all too easy to become a monotonous place to stay, lacking in character which resembles hotels commonly found at motorway service stations.

What can be done for a hotel wanting to inject a new lease of life into its veins? Well a fresh pair of eyes is a good start, many minor things that could be easily fixed yet create bad first impressions can be highlighted and rectified. Secondly a spring clean will show off your hotel in its best light. Thirdly upping staff moral can create a world of difference, smiling, chirpy staff will reflect in customers, making life easier for everyone.

A super hero like, hotel consultant, character that travels the world, finding the worst hotels and turning them around would make fantastic television. Gordon Ramsey has done it with restaurants; Dragons Den has done it with businesses and now a hotel development extraordinaire needs to be born. Imagine a hotel such as the fictional Fawlty Towers being assessed by an experienced, world renowned, professional hotel consultant. It would definitely be an eye opening, insightful yet extremely amusing situation.

Until a super consultant comes along, all hotel owners should take a step back, just for a second, to identify its own strengths and weaknesses. Think about how to make the customer thrilled rather than just satisfied. Motivate staff with incentives to provide the best quality service around. Any hotel around the world could benefit from an external review being honestly critical, clearly highlighting potential downfalls that the hotel could be aware of, or blissfully unaware.

The Effect of Yield Management on Hotel Chains

Revenue management, is the process by which sales of a limited quantity of goods, such as hotel rooms, airline seats, apartment leasing, rental cars, or etc. are managed in order to maximize profits. Successful yield management focuses on selling the product in such a manner that is timely, price competitive, and directed towards the right subset of customers. An economic concept first posited by Dr. Matt H. Keller, and first used by the airline industries beginning in the 1970s, yield management has evolved in more recent years as an important tool especially for the airline and hotel industries for staying economically competitive in otherwise saturated business playing fields.

The basic concept of yield management is based in the economic principle of supply and demand: when supplies are short, prices go up; when supply is high, prices go down. Yield management is a studied, systematic method by which managers can logically place customers within the supply demand spectrum, and thus gain the highest yield for their products. For example, a customer who has very little flexibility in his or her travel plans is the customer who is most likely to pay a higher price for airline tickets and hotel rooms. The customer with a great deal of flexibility is not as inclined to pay a higher price.

Hotel Chains and Yield Management

Many hotels rate their success by their occupancy levels, but this isn't necessarily the best measure of success. Another way to rate a hotel's performance is by determining its REVPAR, or Revenue Per Available Room. REVPAR is calculated by dividing the total room revenue by the total number of rooms. For example, a hotel that makes $6,000 one night with a total number of 100 rooms has a REVPAR of $60.

The yield manager's job is to maximize the revenue per available room by selling rooms to the right customers, at the right price, at the right time. How does the yield manager accomplish this somewhat nebulous task?

Successful yield management arises from several factors: an understanding of what the hotel hopes to achieve (whether that is room occupancy, REVPAR, or some other measurement); a clear understanding of what kind of hotel the manager is working with, which will lead to an understanding of what a customer visiting the hotel wants in his or her hotel experience, and why customers choose their hotel over another hotel; an ability to measure group sales against the overall goals of the hotel (for example, a hotel whose main goal is occupancy will be happy to host a large group at a lowered rate, but a hotel whose main goal is revenue may turn down a larger group in favor of a smaller group who can pay a higher rate); and a knowledge of what will cause the market to fluctuate (such as holidays, regular regional and local events, etc.). The yield manager will ideally consider all these factors when creating different rates for hotel guests.

Typical Income of a Hotel Management

Hotel managers are in charge of the various aspects of hotel operations, and they are basically responsible for ensuring that the hotel employees abide by company rules and procedures. A hotel manager's salary can vary depending on the level of experience, the company and the industry type. Also, the manager's title, such as a general manager or a front office manager, can determine the level of pay.

Lodging Manager

1. All hotel managers are included within the job description of lodging managers. Lodging managers can be found in various types of lodging establishments, including resorts, hotels, motels, boarding houses and recreational camps. Many lodging managers, especially managers employed in larger hotel establishments have a four-year degree in hotel management, hospitality management or business administration. In 2008, the median annual wage for lodging managers was $45,800, the Bureau of Labor Statistics reports.

Work Environment

2. Hotel lodging managers may work 40 or more hours a week due to the hotel operating hours. Hotels are open 24 hours a day, and therefore, many hotel managers may work overtime hours. These hours can include nights and weekends.

General Manager

3. General managers are typically found within larger hotel establishments. Their authority is set by the hotel owners and executives. The general manager of a hotel supervises the total operation of the hotel, and the assistant general manager supports general manager. General managers and assistant general managers oversee all of the hotel departments, such as guest relations, front desk and housekeeping. Their responsibilities include setting prices, approving spending budgets and event planning. The minimum salary for a hotel general manager is around $39,222, according to Payscale.com. However, the average income of a general manager falls between $50,000 and $60,000 yearly. Payscale.com reports that the average salary of a hotel general manager is $54,576. The average salary of assistant general managers is $36,487.

Experience

4. Job opportunities for hotel managers and the salary will vary according to the overall qualifications, including the work experience. Although the minimum salary of a hotel manager is $30,330, the highest paid hotel managers with a bachelor's degree in business, hotel management or a related field can earn over $100,000 annually, Payscale.com reports. Also, employers typically seek to hire candidates with at least one year of experience. For instance, Payscale.com reports that 39 percent of hotel managers possess one to four years of experience, while 26 percent have five to nine years of experience. Conversely, 6 percent of hotel managers have less than one year of experience.

Front Office Manager

5. Front office managers work directly with the hotel guests and staff. They administer schedules, delegate work duties and resolve guest complaints. Many front office managers are responsible for staff training, assigning rooms and the overall management of the daily hotel activities. According to Salaryexpert.com, the average salary of a front office hotel manager is around $50,000.

Techniques for Hotel Management

I want to do this! What's This?

1. 
   hotel image by Gonçalo Carreira from Fotolia.com 
   Hotel management techniques affect profitability.
   Peter Venison writes about “the three circles of a manager’s focus” in his book “100 Tips for Hoteliers: What Every Successful Hotel Professional Needs to Know and Do.” He explains that hotel managers must focus on things that affect staff, guests and finances, and that these areas overlap; what affects one will affect the others. Managing well in these three “circles” will balance the hotel's problems and successes. All three circles impact and affect profitability.

Operations Management

2. Set clear operational goals for the three main areas of hotel management: customer service, staff management and finance and control. Obtain accurate and verifiable management information to pinpoint problem areas and improvement opportunities. Maintain a constant presence for support and supervision for staff and customer benefit. Work for balance between the three main areas of hotel management and collaboration and teamwork between staff and management.

Customer Satisfaction

3. Ensure the hotel is meeting customers’ basic needs for safety and security in a comfortable environment, and then go beyond that with friendly staff, dining services and extra perks. Survey customer satisfaction at every turn to raise the level of awareness among staff and management. Provide to and require of all staff on-going training in customer service, hospitality, communication and administration. Work with supervisors, staff and customers to create a professional service culture.

Finance and Control

4. Consistent professional accounting practices are just as important as customer service and operations. Budgeting, inventory control, appropriate staffing levels, cost control and good internal audit procedures create a foundation upon which to build profits. The uniform system of accounts for the lodging industry widely used by U.S. and European hotels is key to good hotel financial management. The best operations and customer service practices must be supported by financial controls for profitability.

Marketing

5. Constant promotion and sales support is key to successful and profitable hotel management. Implement pricing policies that are in line with market and seasonal demands. Make public relations a priority for all staff, filtering all opportunities to a public relations manager. Take advantage of every photo opportunity with local and visiting politicians and famous guests and put out frequent press releases for everything from new room service menus to remodeling progress to upgrades of hotel amenities. Seek out travel writers and reviewers for publicity and develop customer loyalty programs to reward and encourage return business.

How to Manage Hot els Effectively

Businesses require competent management to get work completed in a timely manner. The hotel business requires especially resourceful managers due to the fast-paced environment. Managing a hotel, even a small one, is a sizable task. Managers handle everything from organizing the hotel staff to dealing with customer complaints. Effective management of a hotel is not easy, but it can be rewarding.

Instructions

1. Step 1
   Obtain a degree in management. Many hotels will require at least a bachelor’s degree, though larger hotels will often require a master’s degree in management, such as an MBA. The education teaches necessary skills for management, including organization, planning, customer service and effective communication.
   
2. Step 2
   Delegate specific tasks. For example, the hotel's department heads or supervisors should report to the hotel manager, rather than having all of the staff report directly to him or her.
   
3. Step 3
   Plan for every possible problem. Managers need to plan based on worst-case scenarios and what options are available. There should be emergency plans, procedures for customer complaints and plans for budget changes.
   
4. Step 4
   Organize all paperwork for the hotel so that information takes only a moment to find.
   
5. Step 5
   Call repairmen for any repair problems immediately when the problem occurs. Maintaining the hotel and repairing damaged or broken hotel property is an important part of management. Having a list of available repairmen for potential repair problems, such as an electrician or plumber, can make it easier to call in the event of an emergency.
   
6. Step 6
   Look at staff performance regularly, but without a known schedule. This ensures that staff is completing tasks, such as housekeeping, on a regular basis. Never schedule specific days for inspections, to avoid monitoring only staff that works on particular days of the week.
   
7. Step 7
   Handle customer complaints immediately. Happy customers are the most important part of a successful hotel. If the customers are not happy, they will complain and spread the word. Dealing with complaints immediately will avert problems with customer dissatisfaction.
   
8. Step 8
   Set up a training program for all staff members. Staff should always be trained before allowing them to work without the help of other staff members. For example, maids should be trained in the appropriate times to clean rooms, how to make beds and which chemicals to use before cleaning on their own.