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R E V E N U E M A N AG E M E NT Kate Parker looks at how software companies are helping spa operators


implement the right strategies to yield concrete results

f you’ve ever booked a flight, you’ll be familiar with revenue management – a technique employed by the airline industry since the 1980s to maximise revenue during periods of high demand, ensure the greatest amount of inventory is fulfilled during off-peak times, and increase profits in the process. Essentially, it’s about selling the right product to the right customer at the right time and at the right price. The spa industry, with its periods of variable demand, has long been a contender to reap the benefits of this strategy. Spa software companies are helping spas take the leap.

DYNAMIC TECHNIQUES According to Frank Pitsikalis, founder and CEO of software company ResortSuite, the spa industry shares many of the attributes that make revenue management such a success in the travel and leisure industries, including sales via reservation, a segmented customer base, a perishable inventory – and the ability to use price as a driver of purchasing behaviour. Spas have the potential to leverage the rewards of revenue management by employing key techniques like dynamic pricing and dynamic availability. However, many spa managers or owners are put

If we’re falling short throughout the month, we choose our lower volume days to promote the spa and offer lower rates to generate revenue Miranda Henning, assistant spa director, Nemacolin Woodlands Resort

off by the perceived complexity of their operations, which can include a huge variety of treatment types, mixed use of facilities, diverse consumer demographics and issues around competition. So it’s no surprise that most spas are still offering the same services for the same amount of time and at the same prices – even during their most high-demand periods. Dynamic pricing, that favourite of the airline industry, involves altering the price based on capacity, time, or both, and can be applied in a spa by offering services at a reduced price during low-peak times in order to encourage an increase in volume. It might mean offering discounted rates during weekday afternoons, for example – but there can be a tricky balance between price reductions and what the subsequent increase in volume needs to be to positively impact the overall margins. This is where spa software comes into its own. As Amanda Wisell, marketing manager at spa technology company SpaSoft, part of Springer-Miller Systems, says: “Spas are looking for dynamic pricing that is both easy to set up and automated, so they don’t have to think about it once the pricing is deployed. SpaSoft offers reporting on both demand

Nemacolin Woodlands Spa uses SpaSoft to create reporting on both demand and production

98 issue 3 2017


Spa Business issue 3 2017  

Spa Business is the magazine and online community for decision-makers in the global spa and wellness industry