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1 U.S.A. Offices Atlanta-Boston-Dallas-Houston-Indianapolis-Los Angeles-New York-Philadelphia-San Francisco-Washington D.C. Resort Spas on the D.O.T. Design,

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Presentation on theme: "1 U.S.A. Offices Atlanta-Boston-Dallas-Houston-Indianapolis-Los Angeles-New York-Philadelphia-San Francisco-Washington D.C. Resort Spas on the D.O.T. Design,"— Presentation transcript:

1 1 U.S.A. Offices Atlanta-Boston-Dallas-Houston-Indianapolis-Los Angeles-New York-Philadelphia-San Francisco-Washington D.C. Resort Spas on the D.O.T. Design, Operations, Trends in Performance Resort Management Conference March 20, 2006

2 2 U.S.A. Offices Atlanta-Boston-Dallas-Houston-Indianapolis-Los Angeles-New York-Philadelphia-San Francisco-Washington D.C. Presented By Andrea Foster –Vice President, PKF Consulting Patty Monteson –Owner, Health Fitness Dynamics Kim Huber –Director, The Spa at Pinehurst at The Pinehurst Resort

3 3 U.S.A. Offices Atlanta-Boston-Dallas-Houston-Indianapolis-Los Angeles-New York-Philadelphia-San Francisco-Washington D.C. PKF CONSULTING Hospitality Real Estate Consultants Tracking the Hotel Industry for over 75 years Publications include: –Benchmarkers & Spa Benchcluster –Annual Trends –Monthly Trends –Southern California Lodging Forecast –Hotel Outlook Available at:

4 4 U.S.A. Offices Atlanta-Boston-Dallas-Houston-Indianapolis-Los Angeles-New York-Philadelphia-San Francisco-Washington D.C. Trends in the Hotel Industry The economy is up; people are traveling and spending money! –Hotel occupancies are up and average daily rates are growing Individuals have a higher expectation of lifestyle today –Design and comfort are becoming higher priorities Our guests have more stimuli and less free time in their lives –Demand for services that offer greater relaxation in a shorter period

5 5 U.S.A. Offices Atlanta-Boston-Dallas-Houston-Indianapolis-Los Angeles-New York-Philadelphia-San Francisco-Washington D.C. What does this mean? The demand base exists to support spa facilities and services The lifestyle focus of spas is in higher demand –Relaxation –Pampering –Surrounded by a serene, possibly luxurious, environment –Focus on healthier living Spa services fit our schedules better than other forms of recreation More revenues and income to resorts from the spa department –One spa treatment can generate more revenue than a round of golf –Less capital-intensive than a golf course –Spa services are more accepted from a gender and corporate perspective

6 6 U.S.A. Offices Atlanta-Boston-Dallas-Houston-Indianapolis-Los Angeles-New York-Philadelphia-San Francisco-Washington D.C. CHANGE IN HOTEL/RESORT GOLF vs SPA REVENUE 2003 to 2004 Source: PKF Hospitality Research, Select group of same-store properties that offer both golf and spa.

7 7 U.S.A. Offices Atlanta-Boston-Dallas-Houston-Indianapolis-Los Angeles-New York-Philadelphia-San Francisco-Washington D.C. Full-Service Hotels Top 52 U.S. Markets Source: STR, PKF-HR/TW Outlook XL F2007F Occupancy67.1%69.4%69.6%69.3% % Change+3.5%+2.3%+0.2%-0.3% ADR$120.00$129.95$136.38$ % Change+4.4%+8.3%+5.0%+3.1% RevPAR$80.54$90.21$94.98$97.43 % Change+10.1%+12.0%+5.3%+2.6%

8 8 U.S.A. Offices Atlanta-Boston-Dallas-Houston-Indianapolis-Los Angeles-New York-Philadelphia-San Francisco-Washington D.C. What is a Spa? “Spas are entities devoted to enhancing overall well-being through a variety of professional services that encourage the renewal of mind, body, and spirit.” -ISPA

9 9 U.S.A. Offices Atlanta-Boston-Dallas-Houston-Indianapolis-Los Angeles-New York-Philadelphia-San Francisco-Washington D.C. What is a Resort Spa? Facilities: –Steam –Sauna –Men’s and women’s locker rooms –Treatment rooms –Retail area –May incorporate a fitness center Services: –Massage –Facials –Body treatments –Nail/salon services, optional Experience!!

10 10 U.S.A. Offices Atlanta-Boston-Dallas-Houston-Indianapolis-Los Angeles-New York-Philadelphia-San Francisco-Washington D.C. What is a Resort Spa? For resort owners and managers, spas are opportunities –To generate more room night demand –To increase revenues –To increase profits –To increase property value –To enhance the guest experience

11 11 U.S.A. Offices Atlanta-Boston-Dallas-Houston-Indianapolis-Los Angeles-New York-Philadelphia-San Francisco-Washington D.C. Hotel/Resort Spa Performance Metrics REVENUES –Spa Revenue as a percentage of Total Revenue –Revenue per occupied hotel room (Spa RevPOR) –Revenue per available hotel room (Spa RevPAR) –Revenue per available treatment room (RevPAT) –Revenue per available treatment room hour (RevPATH) –Revenue per square foot (Rev/SF) EXPENSES –% of Revenues –Per treatment room

12 12 U.S.A. Offices Atlanta-Boston-Dallas-Houston-Indianapolis-Los Angeles-New York-Philadelphia-San Francisco-Washington D.C. Hotel/Resort Spas Mix of Revenues Source: PKF Hospitality Research

13 13 U.S.A. Offices Atlanta-Boston-Dallas-Houston-Indianapolis-Los Angeles-New York-Philadelphia-San Francisco-Washington D.C. Hotel/Resort Spa Direct Operating Expenses 2004 Expense ItemPercent of Department Revenue Administration0.7% Contract Services5.0% Cost of Goods Sold3.2% Health and Beauty Products3.7% Salaries, Wages, and Employee Benefits54.8% Laundry and Dry Cleaning2.4% Linen0.5% Management Fees / Royalties0.8% Marketing0.3% Miscellaneous3.3% Operating Supplies4.7% Uniforms0.3% Total Expenses79.5% Source: PKF Hospitality Research

14 14 U.S.A. Offices Atlanta-Boston-Dallas-Houston-Indianapolis-Los Angeles-New York-Philadelphia-San Francisco-Washington D.C. Resorts with Large Spas are at an Advantage… Source: PKF Hospitality Research 2004 Data

15 15 U.S.A. Offices Atlanta-Boston-Dallas-Houston-Indianapolis-Los Angeles-New York-Philadelphia-San Francisco-Washington D.C. …as they are more profitable Source: PKF Hospitality Research 2004 Data 18.8% 20.4% 24.4% 22.1% 38.9%


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