Report: Spas contribute substantially to U.S. hotel revenues

SPAS HAVE BECOME major revenue contributors for U.S. upper-upscale and luxury hotels, according to the HVS 2019 performance report on spa departments. The report’s authors conclude a new focus on wellness by hotels could continue the trend into the future.

Spas in upper-upscale hotels generate 5.2 percent of total revenue of U.S. hotels on average and luxury hotel spas generate 7.4 percent, according to the report, co-authored by HVS President for the Americas Rodney Clough and HVS Managing Director of Spa and Wellness Consulting Mia Mackman. It is based on data from a sample of 59 hotels and resorts, in which 22 are in the upper-upscale category and 37 are in the luxury category.

Points from 2018 through the third quarter of 2019, total spa revenue for upper-upscale hotels recorded as $28,294,259, while the amount for luxury hotels is $122,228,644.

Upper-upscale hotels have an average of 12 treatment rooms, or a median of 8 treatment rooms while luxury hotels have 13 treatment rooms on average or a median of 11 treatment rooms.

The average spa revenue per treatment room in upper-upscale and luxury hotels are $110,524 and $257,323 respectively.

The report further finds an average spa departmental expense ratio of luxury hotels as 76.1 percent and it is 73.2 percent for upper-upscale hotels.

In total, the average spa departmental ratios for expense and profit is 76:24.

"Spas are becoming influential assets for hotels and resorts given the increasing demand related to wellness and lifestyle programs,” Clough and Mackman said in the report. “With growing hotel and resort pillars being developed and dedicated to well‐being, examining the depth of spa and wellness performance has become a fundamental factor of strategic growth and valuation. Moreover, understanding how these assets are performing plays a critical role in core strategic planning, including ADR and RevPAR performance."

This is not the first time U.S. hotel spas increasing their revenue over five percent. A 2015 report shows a 5.6 percent increase in spa department revenue from 2014-2015 as per the CBRE Hotels’ Americas Research.