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Print Posted on 04/11/2017 in Category 1

Healthy growth trends for Hotel Spa Revenue

Healthy growth trends for Hotel Spa Revenue

For the first time in 10 years, hotel spa department revenue grew at a faster pace compared to other sources of hotel revenue, according to the 2016 edition of CBRE’s Trends in the Hotel Spa Industry.

Outlining the key findings in the latest issue of Spa Business, managing director at CBRE Hotels Spa Consulting Practice Mark VanStekelenburg, revealed that the report shows that US hotel spa departments increased their revenue by 5.6 per cent from 2014 to 2015. 

This compares favourably to a 3.3 per cent rise in rooms revenue for the properties in the survey sample, and a 5.5 per cent increase in total hotel revenue. 

This is the first time since the 2007 edition of the publication that spa revenue growth surpassed rooms revenue growth. 

During the Great Recession which began at the end of 2007, spa department revenue was hit harder than other hotel revenues, extending the time needed for revenue to recover. It wasn’t until 2015 that spa revenue growth exceeded the pace of rooms revenue growth. 

Spa profits have seen double-digit growth in every year since 2010, with the exception of more modest growth in 2012. 

While hotel spa revenue is showing relatively strong growth, hotel spa department profits are increasing at an even greater pace. In 2015, hotel spa department managers were able to convert the 5.6 per cent increase in revenues into a strong 17.7 per cent boost in department profits. 

Spa managers were able to achieve such strong gains in profits because they controlled their expenses; from 2014 to 2015, the combination of cost of goods sold, labour costs, and other operating expenses increased by just 2.1 per cent. 

To read the full report in the current issue of Spa Business, click here. 

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