Just Lie Back And Smell The Profits

Just Lie Back And Smell The Profits

SINGAPORE: A spa brand can play an important role in attracting guests to both the hotel and the spa. Spa brands operated by spa management companies such as Mandara and Aspara typically have the benefit of being able to produce more focused and targeted marketing. But Banyan Tree and Raffles’ Amrita Spa have proven that a hotel company can develop successful spa brands as well.

However, running a hotel spa is by no means an easy business. “Budget, labour, marketing strategy, spa concept, and service, are the main considerations. To have your own spa means total investment in training and management,” says public relations manager of Bali Hyatt, Anastasia Lijadi (Anastasia.Lijadi@hyattintl.com). According to the Spa Integration: Guidelines for Hotels, Resorts, Apartments and Similar Facilities (www.intelligentspas.com), hotels would do well to assess current market conditions and the level of its own spa experience. So if a hotel is located in a competitive environment and with little or no experience in spa operations, using the services of a reputable company would be a prudent alternative to establishing a new inhouse spa outfit.

Ari Widianingsih (Ari@ balimeridien.com), marketing coordinator of Le Meridien Nirwana Golf & Spa, Bali, believes this is sound thinking. “It’s a good move if the hotel does not have the necessary resources,” says Widianingsih. “But it would also be more costly, especially for a small-scale hotel on a tighter budget.”

“On the flip side,” adds Lijadi, “revenues generated by hotel-owned spas can be higher as there are no management fees to pay.”

But this isn’t entirely true, says Jeff Matthews (jmatthews@mandaraspa-asia.com), president and chief operating officer of Mandara. “It depends,” he adds. “Hotel-owned spas may enjoy higher gross revenues but must also shoulder the expenses and difficulties that come with running spas. So they may not make the same profit on the bottomline as when a third party assumes the bulk of the costs.”

Declining to reveal contract fees, Matthews points out that the more contracts and resources a spa management company has, the better the chance for a higher bottomline as many of the operating costs are naturally reduced, including for training and recruitment.

On the flipside, hotel-run spas do enjoy greater management flexibility. “We can have our own unique inhouse treatments. Most of the bigger hotels in Nusa Dua prefer to run their own spas while spas in three- and four-star hotels may be operated by spa management companies,” adds Widianingsih.

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