The price is right

Understanding how to create and implement a coherent spa pricing strategy is essential for maximising yield, says Spa-Balance founding director Sonal Uberoi.

There is no doubt that implementing a coherent pricing policy is one of the key factors for ensuring optimum revenues and higher profits in a spa.

Rather than just considering the cost base (mainly cost of labour and product) and adding on a profit margin of what they find a 'reasonable percentage', spa operators need to consider a number of other variables to maximise yield.

These include: type of spa; target market; type and duration of treatments; extra services or facilities that can be added-on to enhance the spa experience; geographic location; average market rate; consumers' perception of value for money; and how to price spa packages.

Outlined below are some of the factors that should be considered before pricing your treatments and services.

Type of spa

Are you operating a day spa or a spa within a leisure resort? Is it a luxury five-star spa, a four-star spa or a more economic spa?

Day spas will need to be more price competitive and price sensitive as consumers in this sector expect more value for money, whereas spas within luxury five-star hotels will have a higher margin to play with as their clients are more predisposed to spend money on pampering themselves and trying out new spa experiences.

The price point for a day spa will therefore vary considerably to that of a spa within a luxurious leisure resort or a spa within a four-star hotel.

Target market

What type of spa-goer is your target market - periphery, mid-level or core-level?

Your target market should impact your treatment menu.

A less-experienced spa consumer will dictate more of the 'bread and butter' treatments like massage, whereas a more assiduous spa-goer will demand more facilities as well as their treatment, such as hydrotherapy pools, steamrooms and private relaxation areas.

Less labour and product intensive treatments will obviously call for higher profit margins, though the price point will be slightly lower.

Type and duration of treatments

Treatments with lower labour and product costs will yield higher profit margins than signature treatments.

However, the spa operator should also consider the length of time that their therapist and treatment room are occupied.

Print | Email | Discuss this article |

USER COMMENTS (0 COMMENTS)

POST A COMMENT

CLICK HERE TO POST A COMMENT

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Security Code *
Please click post only once - your comment will not be published immediately.