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Setting one of the hottest hospitality trends of recentyears, spas are being designed into almost every new fourand five star resort. To maintain competitive positioningand retain market share, established resorts are alsoadding spas to existing facilities. For most resort proper-ties however, the spa is not expected to be a significantcontributor to the bottom line. Rather, the spa is addedto compliment their core business of selling rooms or realestate – not as a device to drive new business. Knowing

the spa may well be a marginal financial contributor to overall resort opera-tions, considerations must be given to how much they invest in spa technol-ogy. Management must be concerned with how they’re able to realize a posi-tive Return On Investment (ROI). For the purpose herein, the ROI is consid-ered as the ratio of net benefits to the cost of adding the new technology.

It’s a surprise to see some respectable multi-national hospitality groups bring-ing in a mix of non-conforming, non-standard IT systems into their spa andleisure facilities. For instance, a company’s resort in Thailand may use VendorA, their resort in Oman uses Vendor B, and their resort in the Caribbean usesVendor C.

Some of these groups have made a significant effort to standardise on a singlePMS, but have failed to carry on with IT standards in their spa and leisurefacilities. Since the spa is often viewed by IT as a non-critical department, sys-tems selection is often left to the spa manager who either has experience withanother system or receives a special price to bring another solution in.

Standardization on a single spa IT platform can be a significant step towardachieving a positive ROI for several reasons. First, working with a single sys-tem will help reduce the amount of time and effort required to collate andanalyze data from spa sites around the world. A single interface and a singlemethod to collect data should make it easier for the corporate office to reviewvital sales and revenue data.

Standardization should also facilitate the vendor-client relationship, givingthe multi-national more leverage when requesting specific software andreporting enhancements. This improved vendor-client relationship shouldalso result in better site-by-site service pricing helping improve the ROI.

Working with a single IT supplier will also allow the group to internalizea portion of the systems training and support. Corporate IT should be able totake on the first level of systems support, helping provide quicker response toissues at their sites around the world.

Bill Healey

SPA

INVESTING IT DOLLARS IN YOUR SPATHE BEST CHANCES FOR ROI

Surprisingly, there are still several resort spasmanaging their treatments agenda with pen-cil and paper. Daily and monthly statistics arestill maintained on an electronic spreadsheet.Typically, the most advanced technology in aspa is the POS system installed to link clientcharges back to the PMS.

Employee productivity can be positivelyaffected by the installation of a proper spamanagement system capable of tying in thebooking agenda, therapist capabilities, dailyand monthly statistical reports and theresort’s PMS.

The increased employee productivity willresult in improved customer service, betterutilization of available times, better match-ing treatments with therapists and clientrequests, etc.

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When reviewing the impact an IT implementation will have on spa performance, it should not be anevaluation based on the amount of data the system will generate. Rather, the system’s impact shouldbe considered on how relevant information can be given to the right group to influence business devel-opment and help the spa reach its goals.

To determine the system’s ROI, consideration should be given to how the system can combine bothleading and lagging indicators to positively impact business. A "leading" indicator is a predictor of eco-nomic behavior--what will occur; a "lagging" indicator is a report on what has occurred. Leading indi-cators look for cause-and-effect versus correlations. They are used to reflect processes that achieve out-comes. Leading indicators tell the directors what they should be doing today to impact profitability inthe future. At one property, a spa manager had been looking at lagging indicators and noticed Marchwas historically a low-volume month. They saw that the calls and visits by locals were proportionate-ly higher for local guests than they were for out-of-town guests.

The indicators also showed that the treatments preferred by in-town guests were different from theseselected by out-of-town guests. This data allowed the facility to alter their marketing approach for themonth of March in future years. They put more of a focus on prospecting for local clients with specialsduring the month of March. It had a positive impact on the spa’s profitability.

Though the resort’s chief focus is in selling rooms, the Spa was able to boost their off-season num-bers by catering more for the local clients helping achieve a better ROI. It’s important to restate thatit’s not the amount of data the system provides, but rather how the system presents the data for mod-ifying and enhancing future business.

The most significant benefit of using the lagging andleading indicators provided by a quality IT solution isthe ability to use the data to maximize yield per cus-tomer. Yield management is more than a buzz word,but can be an effective tool to help the resort maximizerevenues to achieve a quicker ROI.

Maximizing revenue is a balancing act between the contradictory goals of maximizing yield(price-per-treatment) and maximizing the number of clients in the spa.

Most spa directors will recognize that the demand for treatments greatly exceeds the supplyduring certain parts of the week, or even certain parts of the day. Using historical data, they canrecognize when demand is strong, when it is moderate and when it is weak. This is a key stepin optimizing the spa's revenue. Using this data, management can set pricing strategies to man-age demand at each level. In times when demand is strong, prices could be increased to bringdemand more in-line with supply. For times when demand is weak, perhaps catering to localswith lower priced treatments will be an effective measure to increase demand and boost rev-enues. Yield management is an effective tool to improve the ROI.

Retention and use of client data is extremely impor-tant in judging the value of an IT investment andimproving the ROI. Properly educating staff anddeveloping standard practices for data input willdramatically increase the value of a spa’s IT invest-ment. Trying to maintain proper historical and

medical data on a client through manual means is a tedious task, and nearly impossible.

SPA

With a proper IT solution, spas are better able to analyzemembership data and service clients, which will have apositive impact on the property’s yield and ROI. Thedata will allow the managers to create a clear CRMphilosophy and drive a fundamental change to theircorporate practices.

Keeping a closer eye on inventory can speed inventory turnsand reduce the amount spent on slow-moving products.Further, a well maintained inventory should assist the spa’sboutique shop in ensuring the faster selling items remain instock. In addition, knowing what is on the shelf also sendsa message to staff, naturally results in less staff pilferage.Each of these can help increase the return on investment inspa technology.

A common missing link between the spa and resort is anenhanced link between the spa IT solution and the resort’sPMS. Often the only connection between the two is aposting link allowing charges to be posted back tothe client’s hotel folio. Vital information on the clientis often hidden from the spa. This is data that would beimportant in servicing the client for the current treatmentand in future marketing.

Sharing profiles between the spa system and the resort’sPMS, also reducing the time associated with profileduplicates, re-entering data and providing the client with asingle itinerary.

Attaching spa reservations to a guest’s profile in the PMSis important, as it helps reduce missed revenues from no-shows. Without a fully integrated spa and PMS solution, itis common for a guest to cancel or change a hotel reservationwithout notification ever making it to the Spa. When theguest is a no-show at the spa, they lose the guest’s revenueand have a therapist not being utilized.

It is quite important that a full-link exist between theresort’s PMS and the spa booking system. This will improverelations with clients and will reduce lost revenues bymissed cancellations. An enhanced link between the spasystem and the resort’s PMS is a key factor in increasing theROI.

Virtually every transaction within an installed sys-tem should be recorded in a log data file, providinga fingerprint of each user’s activity. This secure logfile can aid in tracking incorrect or inappropriateactivity, reducing loss and increasing the return oninvestment.

• Security: A spa system should require a user ID and password to access all modules. Users (or user groups) are given varied rights within each system.

• Change Management: All transactions and data modifications are recorded within the system, and are accessible for audit.

The tracking of user activities is a definite bonus toimproving a system’s ROI.

Most spa solutions should be capable of adding somevalue to the spa, particularly in providing a bookingengine for spa treatments. These systems should alsobe quite capable in providing advanced reporting tohelp spa and resort management in analyzingdata. These alone should provide some returnon investment.

More sophisticated systems however, should beable to work seamlessly with the resort’s PMS toprovide direct access to client profiles, allowing asingle point of access for all bookings at the resort.This added customer service provides an increasedreturn on investment.

For multi-property sites, working with a singlesupplier can reap additional benefits for the spa, theresort and the corporate office. A single, standard sys-tem can reduce implementation costs, ongoing sup-port costs, and can significantly aid in the consolida-tion of data at the corporate office.

It’s a good investment for a resort property toimplement a proven spa management system, and tomove away from the pencil and paper and electronicspreadsheet options. In most cases, the reduced costs,enhanced analytical tools and increased customer serv-ice are benefits that exceed the level of investment.

Based in Bali, Bill has been consulting,installing and supporting solutions in the globalgolf and leisure industry since 1982. He has beeninvolved with over 1000 systems installations in40+ countries from North America to Africa toAsia & Australia.

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INVESTING IT DOLLARS IN YOUR SPA

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