It’s been a tough five years for hotel spas, but 2012 should a better year, particularly for those hotel operators who approach their spas as businesses, rather than just property amenities. According to a new study from PKF Consulting, hotel spas had sharper declines in revenues and profits in 2008 and 2009 than did hotels overall. And while improvements in the hotel industry started in early 2010, the spa business didn’t begin to get healthy until a year later.

“Because spa services are often perceived as a luxury, the changes in hotel spa revenue since 2006 aren’t surprising,” says Andrea Foster, vice president in PKFC’s Boston office and national director of spa consulting. “Concurrent with the economic recession, spa revenue declined at a greater pace than other hotel revenue sources in 2008 and 2009 and didn’t post a year-over-year increase in 2010 as was observed for [hotel] RevPARs.”

Of course, results vary by location, industry segment and types of customers served. While the average lodging spa saw revenues drop 10.5% in 2010, urban spas experienced less of a decline (down 1.2%) than did resort spas (down 13.6%). In addition, the study shows the smallest and largest hotel spa operations suffered less of a decline than those facilities in the middle. “The mid-sized spas are caught in-between offering the intimate experience of a small operation and the grand showcase facility found in a large hotel or resort,” explains Foster.

Even though the typical spa was able to reduce expenses by 3.9% in 2010, profits tumbled by 27.4%, which followed a 13.9% decline in 2009. Spa profit margins fell as well: from 28.1% in 2009 to 22.8% the following year.

Averages don’t tell the whole story. According to leading spa consultant Judy Singer, those operators who’ve paid attention to running the spa as a business fared better during the recession. “They’ve done better because they focus on the business skills required to operate a successful hotel spa,” says Singer, a principal in Pompano Beach, FL-based HFD Spa, a full-service spa advisory company. “In good times and in bad, these smart operators pay attention to things like marketing, payroll controls, service offerings, etc.”

Both Singer and Foster agree savvy hotel spa operators are marketing harder and smarter to build business. Singer says while social media is an important tool, so is building customer databases for e-mail blitzes touting specials, new services and other messages. “By offering a variety of specials, you can get your regular guests to become ambassadors for your spa and bring in new customers,” says Singer. “It’s also important hotels do a better job in marketing to in-house guests than they did in the past.”

Foster believes yield management can be another important tool. “As hotel occupancies have decreased in recent years, it’s crucial to also focus on the local market through special promotions, spa memberships for those who live in the area and other ideas,” she says. “You can send a message to the local community about specials you have on Tuesdays at 10 a.m. or some other slow time for the spa. You can either offer a discount or a value-added service.”

Foster says many spas also use deal sites, such as Groupon, Living Social and Spa Rah Rah, to generate new spa demand.

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