The Expert: Spas Can Still Do Hotels Good

The average U.S. hotel is likely to suffer a 5.3 percent drop in occupancy and a 7.9 percent decline in profits in 2009, according to Atlanta-based PKF Hospitality Research. A well-run spa operation can contribute revenue that is likely to be increasingly important for hotels as occupancy contracts this year.Spa services also can define the market position of a hotel, provide a competitive asset that is attractive to multiple demand segments and diversify a hotel’s revenue stream. These benefits could be especially valuable for hotels seeking to differentiate their product, increase their market share, achieve revenue stability and maintain profitability during what is widely expected to be an extremely challenging year.These are among the reasons that spa services will continue to be central to the value propositions of several luxury hospitality assets owned by Behringer Harvard. These hotels and resorts include The Hotel Palomar in Dallas; The Lodge and Spa at Cordillera in Vail Valley, Colo.; Hawk’s Cay Resort and Marina in the Florida Keys; and Lakeway Resort and Spa in Austin.Although demand for spa services is likely to soften along with occupancy rates, it tends to persevere longer than demand in other industries. This is because spa customers are generally affluent and aware of the importance of staying healthy even during stressful times, according to PKF.However, like all consumers today, spa customers are also demanding more value for their money. The International Spa Association forecasts that in 2009, spa operators will leverage service customization and innovative marketing to maintain demand and increase customer value perceptions.Expert asset management practices certainly will be imperative for all luxury hotel operators this year, and a successful spa is only one potential component. But it can go a long way toward elevating the customer’s perception of value, improving competitive advantage and attracting a larger share of the market.