6 July 2016

As we hit the middle of the calendar year, our thoughts are split between two aspects, namely (1) how we are performing against this year’s budget, and (2) next years budgeting process. In the coming months, Managers, Owners, and Developers will be casting a critical eye over the spas financial performance; customer satisfaction surveys, while important, will not justify or support poor financial performance.

So, and in preparation for the year-end, what can be done to make operations more profitable? GOCO Hospitality would like to share the following tips and ideas to help spas improve financial performance and that crucial bottom line figure between July and December of 2016.

1. Review & Assess Operating Criteria

What would happen if the spa was to stay open one-hour longer? What would happen if the spa is opened one hour earlier or one hour later? Are the spas opening hours aligning to guest requirements? Are there any opportunities available to improve efficiency by only utilizing the spas current resources? Important is to review the operating criteria and see if there are any small tweaks that can be made to improve performance, guest satisfaction, and efficiency without increasing costs.

2. Revenue Improvement

Are guests being guided to the best treatments and services that are available? Are there opportunities to improve revenue through up-selling and upgrading treatments and services? Consider running an express training program to teach spa team members to effectively up-sell treatment add-ons, enhancements and retail items.

3. Manning & Staffing

Is the spa flexible in its manning? Given that this is a quiet time of year in the Middle East, is there potential for staff to take time in lieu now and then work extended hours during the high season? For example, GOCO Hospitality recommends creating a “therapist hours bank” where the spa director is the bank manager and he or she can make deposits and withdraws as the business dynamics shift. Successful operations are able to quickly respond to guest demands. Just because the schedule is printed, it does not mean that it is cast in stone.

4. Sales & Marketing

Marketing is simply planned communication. The hotel or resort may think that everyone knows about the spa, but management would be surprised to learn that many of the staff inside the hotel or resort will not know what is available at the spa. Therefore, focus marketing and awareness campaigns not only on guests but also to colleagues including the Hotel’s concierge, the Front Desk Team, F&B Teams, Housekeeping, Reservations, and Sales and Marketing. If they don’t know what is available in the spa, then they cannot share and support business growth.

5. Operating Expenses

What goes out is just as important as what comes in. Therefore, controlling expenses, particularly in the low season is extremely important. Review the budget, year-to-date performance and the operating expense detail to identify opportunities to reduce operating expenses between now and the end of the year. Are all of the expenses that are being incurred supporting the wider guest experience? If not, then these expenses might be a surplus to the requirements, and these could be eliminated or reduced, resulting in better flow through and improved perfor- mance.

A well-controlled business will be ready for seasonality, peaks and troughs, and have mechanisms in place to respond quickly to change. Business flexibility is particularly important in today’s current business climate where spending power, travel trends, and economic factors are constantly changing and hard to predict.



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