Investing It Dollars In Your Spa Gaming and Leisure Magazine, Spring 2008
INVESTING IT DOLLARS IN YOUR SPA
THE BEST CHANCES FOR ROI
Setting one of the hottest hospitality trends of recent Some of these groups have made a significant effort to standardise on a single
years, spas are being designed into almost every new four PMS, but have failed to carry on with IT standards in their spa and leisure
and five star resort. To maintain competitive positioning facilities. Since the spa is often viewed by IT as a non-critical department, sys-
and retain market share, established resorts are also tems selection is often left to the spa manager who either has experience with
adding spas to existing facilities. For most resort proper- another system or receives a special price to bring another solution in.
ties however, the spa is not expected to be a significant Standardization on a single spa IT platform can be a significant step toward
contributor to the bottom line. Rather, the spa is added achieving a positive ROI for several reasons. First, working with a single sys-
to compliment their core business of selling rooms or real tem will help reduce the amount of time and effort required to collate and
estate – not as a device to drive new business. Knowing analyze data from spa sites around the world. A single interface and a single
the spa may well be a marginal financial contributor to overall resort opera- method to collect data should make it easier for the corporate office to review
tions, considerations must be given to how much they invest in spa technol- vital sales and revenue data.
ogy. Management must be concerned with how they’re able to realize a posi- Standardization should also facilitate the vendor-client relationship, giving
tive Return On Investment (ROI). For the purpose herein, the ROI is consid- the multi-national more leverage when requesting specific software and
ered as the ratio of net benefits to the cost of adding the new technology. reporting enhancements. This improved vendor-client relationship should
also result in better site-by-site service pricing helping improve the ROI.
Working with a single IT supplier will also allow the group to internalize
a portion of the systems training and support. Corporate IT should be able to
take on the first level of systems support, helping provide quicker response to
issues at their sites around the world.
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 and
leisure facilities. For instance, a company’s resort in Thailand may use Vendor
A, their resort in Oman uses Vendor B, and their resort in the Caribbean uses
Surprisingly, there are still several resort spas
managing their treatments agenda with pen-
cil and paper. Daily and monthly statistics are
still maintained on an electronic spreadsheet.
Typically, the most advanced technology in a
spa is the POS system installed to link client
charges back to the PMS.
Employee productivity can be positively
affected by the installation of a proper spa
management system capable of tying in the
booking agenda, therapist capabilities, daily
and monthly statistical reports and the
The increased employee productivity will
result in improved customer service, better
utilization of available times, better match-
ing treatments with therapists and client
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With a proper IT solution, spas are better able to analyze
membership data and service clients, which will have a
positive impact on the property’s yield and ROI. The
data will allow the managers to create a clear CRM
philosophy and drive a fundamental change to their
When reviewing the impact an IT implementation will have on spa performance, it should not be an
evaluation based on the amount of data the system will generate. Rather, the system’s impact should
be considered on how relevant information can be given to the right group to influence business devel-
opment and help the spa reach its goals. Keeping a closer eye on inventory can speed inventory turns
To determine the system’s ROI, consideration should be given to how the system can combine both and reduce the amount spent on slow-moving products.
leading and lagging indicators to positively impact business. A quot;leadingquot; indicator is a predictor of eco- Further, a well maintained inventory should assist the spa’s
nomic behavior--what will occur; a quot;laggingquot; indicator is a report on what has occurred. Leading indi- boutique shop in ensuring the faster selling items remain in
cators look for cause-and-effect versus correlations. They are used to reflect processes that achieve out- stock. In addition, knowing what is on the shelf also sends
comes. Leading indicators tell the directors what they should be doing today to impact profitability in a message to staff, naturally results in less staff pilferage.
the future. At one property, a spa manager had been looking at lagging indicators and noticed March Each of these can help increase the return on investment in
was historically a low-volume month. They saw that the calls and visits by locals were proportionate- spa technology.
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 these
selected by out-of-town guests. This data allowed the facility to alter their marketing approach for the
month of March in future years. They put more of a focus on prospecting for local clients with specials
during 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 that
it’s not the amount of data the system provides, but rather how the system presents the data for mod-
ifying and enhancing future business.
A common missing link between the spa and resort is an
The most significant benefit of using the lagging and enhanced link between the spa IT solution and the resort’s
leading indicators provided by a quality IT solution is PMS. Often the only connection between the two is a
the ability to use the data to maximize yield per cus- posting link allowing charges to be posted back to
tomer. Yield management is more than a buzz word, the client’s hotel folio. Vital information on the client
but can be an effective tool to help the resort maximize is often hidden from the spa. This is data that would be
revenues to achieve a quicker ROI. important in servicing the client for the current treatment
Maximizing revenue is a balancing act between the contradictory goals of maximizing yield and in future marketing.
(price-per-treatment) and maximizing the number of clients in the spa. Sharing profiles between the spa system and the resort’s
Most spa directors will recognize that the demand for treatments greatly exceeds the supply PMS, also reducing the time associated with profile
during certain parts of the week, or even certain parts of the day. Using historical data, they can duplicates, re-entering data and providing the client with a
recognize when demand is strong, when it is moderate and when it is weak. This is a key step single itinerary.
in optimizing the spa's revenue. Using this data, management can set pricing strategies to man- Attaching spa reservations to a guest’s profile in the PMS
age demand at each level. In times when demand is strong, prices could be increased to bring is important, as it helps reduce missed revenues from no-
demand more in-line with supply. For times when demand is weak, perhaps catering to locals shows. Without a fully integrated spa and PMS solution, it
with lower priced treatments will be an effective measure to increase demand and boost rev- is common for a guest to cancel or change a hotel reservation
enues. Yield management is an effective tool to improve the ROI. without notification ever making it to the Spa. When the
guest is a no-show at the spa, they lose the guest’s revenue
Retention and use of client data is extremely impor- and have a therapist not being utilized.
tant in judging the value of an IT investment and It is quite important that a full-link exist between the
improving the ROI. Properly educating staff and resort’s PMS and the spa booking system. This will improve
developing standard practices for data input will relations with clients and will reduce lost revenues by
dramatically increase the value of a spa’s IT invest- missed cancellations. An enhanced link between the spa
ment. Trying to maintain proper historical and system and the resort’s PMS is a key factor in increasing the
medical data on a client through manual means is a tedious task, and nearly impossible. ROI.
70 SPRING/SUMMER 2008
INVESTING IT DOLLARS IN YOUR SPA
Virtually every transaction within an installed sys-
tem should be recorded in a log data file, providing
a fingerprint of each user’s activity. This secure log
file can aid in tracking incorrect or inappropriate
activity, reducing loss and increasing the return on
• 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
• 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 to
improving a system’s ROI.
Most spa solutions should be capable of adding some
value to the spa, particularly in providing a booking
engine for spa treatments. These systems should also
be quite capable in providing advanced reporting to
help spa and resort management in analyzing
data. These alone should provide some return
More sophisticated systems however, should be
able to work seamlessly with the resort’s PMS to
provide direct access to client profiles, allowing a
single point of access for all bookings at the resort.
This added customer service provides an increased
return on investment.
For multi-property sites, working with a single
supplier can reap additional benefits for the spa, the
resort 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 to
implement a proven spa management system, and to
move away from the pencil and paper and electronic
spreadsheet options. In most cases, the reduced costs,
enhanced analytical tools and increased customer serv-
ice are benefits that exceed the level of investment.
It’s been said that human beings read 250 words per minute. That
Based in Bali, Bill has been consulting, equates to about 9 hours to read this issue of G&L. You know the
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