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How Spas Can Stop Losing Money!

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Recently I was sitting in the lobby of a neighborhood spa in Bangkok. I was the first person there and the therapists were still prepping their rooms so I had a chance observe front desk operations. It was nightmarish. 

A group of three came in requesting 10 am Thai massage. Apparently those rooms were already booked. But what shocked me was that the receptionist didn’t offer another service or suggest a time later in the day or even that they schedule for the next day, same time.

How much money in treatments and retail sales is this spa losing due to poor management?

Check out this article excerpt  from Spa Executive that addresses this very problem.

Turn-Away Tracking

You’re probably losing more revenue than you think from turning away customers. On average, a spa loses about 15% of a day’s business from turning away. So, if you lose 15 out of 100 appointments a day at $150 dollars on average, that’s $2250 a day.

For a spa that is open seven days a week and closed only at Christmas and New Year’s, that’s a total revenue loss of $816,750 — or more than three quarters of a million dollars.

A regular customer might come back, but first time customers who are turned away are unlikely to return.

Yield Management

Yield management is the process of adjusting the price of a product or service in response to market factors like demand or competition. It’s a common practice of airlines, who were the first to implement it back in the 1980s. When the plane is filling up fast, prices increase. When it’s not, prices are lower. It’s most commonly applied when there is limited or finite capacity, like seats on the plane, or in the case of a spa, the availability of service providers.

A successful yield management system will optimize intake, minimize downtime, increase revenue, and improve efficiency. American Airlines reportedly credits yield management techniques for a revenue increase of $500 million per year, while DELTA says it generated additional revenues of $300 million per year. Marriott Hotels, meanwhile, credits yield management for an additional $100 million in revenue per year.

Want more info on how to fix the problem. Read here .

Linda Harding-Bond
Linda Harding-Bond is shifting the paradigm on spa retail training. Her Express Online Retail Training Course is exactly what's needed for post-COVID-19 spa re-openings. Designed to bring your therapists' retail skills up to speed, it will quickly position retail as a robust alternate revenue stream. Linda has provided training for many world-class organizations including The Oberoi Group, St. Regis Hotel, Anantara Hotels & Resorts, Shangri-La Hotels, The Resort at Pedregal, GoldenEye Resort and Spa and Six Senses Resorts. She is author of "Listen, Engage, Sell!: The Foolproof Method for Increasing Spa Sales in 7 Days or Less" and "The New Esthy Handbook: an Essential Guide for Novice or Nervous Estheticians". Connect with her at Linda@Moontideconsulting.com .
Linda Harding-Bond

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