2019 HVS Performance Report: Spa Department

On average, spa and wellness departments run profitably and can contribute significantly to a hotel's bottom line. This report is our second annual performance report published by HVS that tracks and monitors spa department performance and profitability. The data presented reflect spa operating-statement averages and data points from 2018 through the third quarter of 2019.

Across HVS's 40 U.S. locations, our expert associates are continually consulting on hotels and resorts with significant spa and wellness operations, which are captured within their own departmental statement on an operating profit and loss statement. For the last three years, HVS has partnered with Mia Mackman, our Managing Director of Spa & Wellness Consulting, to better understand the accelerating spa and wellness assets and evolving lifestyle market.

This report reflects a sample of 59 hotels and resorts, with 22 in the upper-upscale category and 37 in the luxury category. Hotel, guestroom, and treatment-room counts are summarized in the following table, along with total spa revenue for the survey group.

Survey Participants

Overall comparisons between the two hotel segments show that luxury hotels have larger spas on average, which would be expected (12 treatment rooms on average, or a median of 8 treatment rooms, for upper-upscale hotels vs. 13 rooms on average, or a median of 11 treatment rooms, for luxury hotels). Spa revenue generated per occupied hotel room can also be significantly different between the two product types, averaging $18 for upper-upscale vs. $40 for luxury hotels. Treatment-room averages reflect roughly $111,000 per room for upper-upscale hotels and $257,000 (rounded) for luxury hotels.

Survey Results

Spa Revenue per Treatment Room

Spa Departmental Ratios

Spas are becoming influential assets for hotels and resorts given the increasing demand related to wellness and lifestyle programs. 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.

If your spa is operating at a loss or notably above the typical expense ratio for a spa, as shown here, HVS can help. Also, if you are not driving significant revenue levels from your spa operation (a full-service spa should generate 5.0% or more of total revenue, on average; in our survey, upper-upscale spas generate 5.2% of total revenue on average, and luxury spas generate 7.4% of total revenue on average), our expertise can help you derive strategies for improvement, as enhancing or modifying these evolving services can reduce expense percentages and increase opportunities for new revenue growth throughout multiple departments.