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Investing It Dollars In Your Spa Gaming and Leisure Magazine, Spring 2008


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Investing IT Dollars in Your Spa
Published in Gaming and Leisure Magazine
Spring 2008

Published in: Technology, Education
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Investing It Dollars In Your Spa Gaming and Leisure Magazine, Spring 2008

  1. 1. SPA Bill Healey 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 Vendor C. 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 resort’s PMS. The increased employee productivity will result in improved customer service, better utilization of available times, better match- ing treatments with therapists and client requests, etc. Subscribe free at and you could win $500! See website for details. 69
  2. 2. SPA 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 corporate practices. 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
  3. 3. 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 investment. • 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 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 on investment. 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 installing and supporting solutions in the global decision makers for your products and services read G&L. How golf and leisure industry since 1982. He has been much time do you suspect they have to read anything else? Join us involved with over 1000 systems installations in for the next issue by calling us today at 702.547.4545 or email us at 40+ countries from North America to Africa to Spend wisely. Asia & Australia. Subscribe free at and you could win $500! See website for details. 71