Spa Professionals Guild

Revenue Management



The right product, at the right time at the right price!

This is the core principle of revenue management.

Do you find your Spa is underutilized and sometimes maybe even empty? It is time to start managing your spa business in a more strategic manner.

Most salons/spas offer their treatments on a first come first served basis meaning that during high demand times a very profitable treatment could be turned away because the treatment room is booked with another treatment which is much less profitable.

In order to optimize revenue, you need to look at ways to attract clients during low demand times and then at the same time boosting profit during high demand times

In order to implement revenue management strategies let’s look at what information you need before you can make any decisions.

Revenue Contribution

Draw a report showing highest to lowest profit treatments and then the contribution of these treatments to total spa revenue.

Productivity Analysis

What day of the week and times of day have the highest demand? What months produce the highest revenue? And which treatments are sold least.

Retail Analysis

Do you have a strong retail-focused team? Is it something that can be improved? What other impulse buys can you add to your retail offering? When is your Average Docket Value highest?

Managing Costs

Do you have an effective cost control system in place? Are there areas you feel you can cut costs without compromising experience? Do you have a system in place where you actively promote higher profit treatments?

The above information will give a clear picture of the opportunities to optimize revenue. Before I share some ideas on how to revenue manage your spa business lets first agree that running a “discounting” business is not a long-term revenue-boosting solution but rather can have a negative result in how customers perceive the value they are getting. Customers will begin to expect discounts all the time.

So instead of setting your treatment prices based on the highest demand level and then discounting to fill up quiet days and times, rather consider the following:

  1. Type of treatment room: Pedi lounge vs. private treatment room. Standard treatment room vs. outdoor room over the lake with private bathroom facilities and Jacuzzi. To give just two examples.
  2. Treatment booking times: Last-minute bookings vs advance bookings, time of day, day of the week and of course duration of treatment
  3. Type of treatment booked: Plain and simple most profitable treatments are offered during higher demand times and least profitable treatments and shorter treatments are offered during lower demand times.
  4. Effective utilization of spa facilities to support treatments booked: This means booking up the least in demand rooms first leaving open the higher demand rooms during peak periods. So, a pedicure example again, you would book a pedicure in a lounge area before booking a treatment room leaving it open to perform a more profitable treatment like a massage.

Some ideas on where to get started with a term a little new to our Industry. Dynamic Pricing as defined in the dictionary is the practice of pricing items at a level determined by a particular customer’s perceived ability to pay.

  1. For starters, Saturday bookings should be restricted to higher profit treatments first at peak prices compared to a Tuesday morning for example.
  2. Offer maintenance type of treatments like manicures, pedicures and waxing on a Monday to Wednesday morning for example at special prices to drive bookings on those days.
  3. Early Bird booking pricing to encourage advance bookings
  4. If you are a spa in a hotel encourage poolside or on the deck massage treatments to maximise the treatment room space in the spa. If a guest is offered this option they will most likely take up the offer so they can relax by the pool while having a massage.
  5. At reservation desk have a clear list of treatments listed from most profitable to least profitable and all bookings start with most profitable offered first. Ensure all staff who take bookings are aware of this.

It is vital to move ahead with this type of revenue management ideas in order to get and maintain growth in the spa business. This type of Dynamic Pricing is not new to the consumer so do this with confidence.

Should you require any further information please contact [email protected]

Spa Professionals Guild is now Wellness Professionals Club.


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