SPA AS BUSINESS BUILDER

If you own a resort and want to build your average rate and RevPAR, it's time to add a spa to your mix of facilities. Of course, it's not that easy, but statistically speaking, resorts with spas significantly outperform those without. That's what Smith Travel Research President Mark Lomanno revealed during a presentation at last month's fifth annual Resort Management Conference in Phoenix.

In looking at operating statistics at several hundred properties with and without spas, Lomanno found that resorts with full-service spas have an average daily rate of $228.07 versus an ADR of $154.42 for those without such amenities. Likewise, resorts with spas enjoy a nearly 50-percent premium in RevPAR ($150.24 versus $103.42) over those without massage tables, steam rooms and the appropriate trappings.

In a panel discussion following the presentation, Lomanno added that, as logic dictates, the addition of a spa doesn't mean a resort can instantly raise its rates by half or more. Yet, other resort executives on the panel recognized the power a spa or other signature recreation facility has for a resort.

“Even though utilization rates for our spas are lower than we thought they would be, they're the one amenity every meeting planner wants to see when a salesperson walks them through a property,” said Robert McCleary, GM of the Manor Vail Resort in Colorado and a division vice president of Premier Resorts. “A resort without a spa is clearly at a disadvantage.”

Charles Peck, president & CEO of Destination Resorts, says his firm has in the past few years added luxury spas at six or seven of its properties. “We analyze spas both for their profit potential as well as their ability to drive gains in occupancy and rate,” he said. “They also help build business in off-peak periods, such as in Vail after the leaves drop but before the snow flies.”

Similarly, Peck credited the addition of a $10-million-plus water park at the Pointe South Mountain property in Phoenix for a boost in the resorts' annual profits from “the lower single digits to more than $10 million a year.”

The Oasis Water Park, Peck told the audience, builds occupancy for the resort because it attracts a different audience and generates business during Phoenix's hot summer months.

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