Last week, we introduced some of today’s most challenging issues surrounding yield management in the spa industry. Furthermore, we stressed the importance of bringing an integrated approach into revenue management capable of providing spas with the opportunity to measure time as a crucial variable to understand revenue-production performance.
In our previous post, we briefly introduced RevPATH as the key performance indicator (KPI) that will allow us to measure time effectively. In the following lines, we would like to further explain the benefits that this KPI provides to spas and wellness centres in terms of revenue management. We would like to continue to use the reference document Spa Revenue Management from Sheryl Kimes and Sonnee Singh. Let’s take a look.
La semana pasada presentamos algunos de los retos más importantes de la gestión de rendimiento en la industria del spa. Sobre todo, hicimos hincapié en la importancia de incorporar un enfoque integral en la gestión de rendimiento capaz de dar a los spas la oportunidad de medir el tiempo como una variable fundamental para entender el rendimiento producción-ingresos.
En nuestro post anterior, introdujimos RevPATH como el indicador clave de rendimiento, ICR, (KPI, por sus siglas en inglés) que nos permitirá medir el tiempo de manera eficaz. En las siguientes líneas, nos gustaría explicar en más detalle los beneficios que este ICR puede brindar a los spas y centros de wellness en materia de gestión de rendimiento. Para ello, queremos seguir utilizando el documento de referencia Spa Revenue Management de Sheryl Kimes y Sonnee Singh. Demos un vistazo.
Why time matters
As we stated last week, the spa industry uses two main KPIs, amongst others, to implement revenue management: The Average Therapist Occupancy and the Average Treatment Room Occupancy. While looking at the spa’s capacity is an essential element of yield management, we strongly believe such an approach is incomplete if it does not bring into consideration the ‘time’ variable.
Time is an essential component of the way our industry works. In fact, customer demand changes by time of the year, week, day and time of the day. According to the Spa Revenue Management report “each spa’s managers must be able to forecast their operations time-related demand so they can make effective pricing and capacity-allocation decisions to manage the shoulder periods”.
How to calculate RevPATH
Today, spas can bring ‘time’ into revenue management using the so-called revenue per available treatment-hour (RevPATH). This KPI, “can be calculated by multiplying the treatment room occupancy by the average treatment-related expenditure per person or by dividing the revenue for the time period in question by the number of treatment-hours available during that interval.”
In practical terms, this means that a spa with a treatment room occupancy of 70% and an average-related expenditure of $200, has a RevPATH of $240 (70% x 200). Similarly, a twenty-room spa that makes $1600 on Fridays between 6:00 and 7:00 AM, has a RevPATH of $80 (1600 / [20 x 1]).
Different spas calculate their RevPATH according to their goals. While high-end spas may favor higher expenditure per guests, regular spas may prefer high volumes of business. The bottom line is that “the trade-off between occupancy and average expenditure is a strategic one, and one that must be carefully considered when positioning one’s spa”.
Building a strategy
Once spas and wellness centres have been able to understand their RevPATH patterns, it is time to use that information to build a solid strategy towards the future. Such a strategy, which needs to be designed around the spa’s structure and its core services, may include different kinds of actions aimed at increasing RevPATH.
For instance, “during the busy periods, the manager may want to consider requiring a credit card guarantee for reservations, reducing the amount of time between treatments, or offering premium services. During [their] slow periods, [they] may consider offering specially priced treatments for customers who are available on weekdays”.
In all this process, the manager also needs to keep an eye on the ‘fair’ reasons that are given to customers when different prices are applied to the same kinds of services. If the customer perceives an ‘unfair’ treatment, he/she will walk away from your business. Because of this, it is essential for the spa manager to develop logical conditions (rate fences) capable of explaining the price differential.
A solid implementation of those rate fences, which can be both physical (e.g. room size or location, treatment type, amenities) and intangible (e.g. affiliation, time of day or week, treatment duration), will have a significant impact on revenue management. This is why using discounting as the only option to deal with revenue management could be a dangerous strategy if it does not have the support of coherent and logical rate fences.
Considering all of the above, we agree with the Spa Revenue Management report on the importance of developing and implementing strategic differential pricing instead of making of it a tactical, sporadic approach. Likewise, we believe the long run success of revenue management depends on the spa’s ability to “market and manage every available moment of the spa as a distinctive product”. If we know how to take full advantage of RevPATH, we will certainly enhance our revenue management and overall performance.
Por qué el tiempo es importante
Tal y como lo explicamos la semana pasada, la industria del spa utiliza fundamentalmente, entre otros, dos ICRs para implementar la gestión de rendimiento: La Ocupación Media del Terapeuta y la Ocupación Media de la Sala de Tratamiento. Si bien una consideración sobre la capacidad del spa es un elemento esencial dentro de la gestión de rendimiento, creemos firmemente que este enfoque es incompleto si no incluye la variable ‘tiempo’.
El tiempo es un componente esencial dentro del modo en que nuestra industria funciona. De hecho, la demanda del cliente cambia de acuerdo al tiempo del año, de la semana, del día y de la hora del día. De acuerdo con el informe Spa Revenue Management “los gerentes de cada spa deben ser capaces de prever sus demandas de operaciones relacionadas con el tiempo para que puedan tomar decisiones efectivas de fijación de precios y asignación de capacidad que les permitan manejar los periodos neutrales”.
Cómo se calcula el RevPATH
En la actualidad, los spas pueden incorporar la variable ‘tiempo’ dentro de la gestión de rendimiento haciendo uso del denominado ingreso por hora de tratamiento disponible (RevPATH, del inglés revenue per available treatment-hour). Este ICR “puede ser calculado multiplicando la ocupación de las salas de tratamiento por el gasto promedio por cliente relacionado con el tratamiento o a través de una división entre el ingreso del periodo en cuestión y el número de horas disponibles durenta dicho intervalo de tiempo”.
En términos prácticos, esto significa que un spa con una ocupación del 70% y un gasto promedio por cliente de $200, tiene un RevPATH de $ 240 (70% x 200). Del mismo modo, un spa con 20 salas que percibe $1600 los viernes entre 6:00 y 7:00 de la mañana, tiene un RevPATH de $ 80 (1600 / [20 x 1]).
Considerando su diversidad, los spas calculan su RevPATH de acuerdo con sus propios objetivos. Mientras que los spas de alto nivel favorecen un mayor gasto por cliente, los spas de nivel medio pueden preferir un mayor volumen de negocios. La espina dorsal de todo esto radica en que “el equilibrio entre la ocupación y el gasto promedio es de carácter estratégico, y siempre debe ser considerado con cuidado cuando se trata de posicionar el spa”.
Construyendo una estrategia
Una vez que los spas y centros de wellness han logrado entender los patrones de su RevPATH, inicia el momento de utilizar dicha información para construir una sólida estrategia hacia el futuro. Esta estrategia, que debe ser diseñada en torno a la estructura del spa y sus servicios básicos, puede incluir diferentes tipos de acciones destinadas a aumentar el RevPATH.
Por ejemplo, “durante los periodos de mucho trabajo, el gerente puede considerar diversas opciones como exigir tarjeta de crédito para realizar las reservas, reducir la cantidad de tiempo entre los tratamientos o implementar ofertas de servicios premium. Durante los periodos de bajo movimiento, puede considerar ofrecer tratamientos a precios especiales para aquellos clientes que están disponibles de lunes a viernes”.
En todo este proceso, el director también necesita brindar atención especial a la validez de las razones que se dan a los clientes cuando se aplican diferentes precios para el mismo tipo de servicios. Si el cliente percibe un tratamento ‘injusto’, él/ella se alejará de su negocio. Debido a esto, es esencial que el gestor del spa logre desarrollar condiciones lógicas (cercas tarifarias) capaces de explicar la diferencia de precio.
Una implementación sólida de las cercas tarifarias (rate fences), que pueden ser físicas (por ejemplo, el tamaño o la ubicación de la habitación, el tipo de tratamiento, servicios especiales) e intangibles (por ejemplo, la afiliación, la hora del día o de la semana, la duración del tratamiento), tendrá un impacto significativo en la gestión de rendimiento. Precisamente por ello, usar el descuento como única opción para manejar la gestión de rendimiento puede ser una estrategia peligrosa si no cuenta con el apoyo de cercas tarifarias coherentes y lógicas.
Teniendo en cuenta todo lo anterior, estamos de acuerdo con el informe Spa Revenue Management con respecto a la importancia que tiene una continua elaboración y aplicación estratégica de precios diferenciales diferente al uso táctico y esporádico que se hace de ello. Del mismo modo, creemos que el éxito a largo plazo de la gestión de rendimiento depende de la capacidad del spa de “comercializar y manejar cada momento disponible del spa como un producto único”. Si sabemos cómo sacar el máximo provecho del RevPATH, sin duda podremos mejorar nuestra gestión de ingresos y rendimiento general.
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