The Metrics That Will Best Help You Analyze Your Spa’s Performance
It’s important to understand why spa KPIs (Key Performance Indicators) matter. As the old adage says: you manage what you measure. We need to clearly identify what metrics mean the most for our spas, then set goals, and actively monitor. If the results start to veer away from desired outcomes, then it’s time to take action to improve your business. Tracking the right KPIs gives you a more practical and meaningful way to measure success, so you can make the most of your time and money — two of your most precious assets.
Our vast experience within the spa industry has led us to believe the following KPIs are the best factors to measure, specifically for your spa business.
1. Hotel Guest Capture Rate For Treatments
A percentage calculated by the Total Spa Guests / Total Hotel Guests
This reveals how many of the guests in the hotel saw the value in visiting the spa. These hotel guests booked an appointment for a spa day and committed time on their trip to wellness and self-care. The higher this number, the more relevant your spa is to the hotel.
2. Revenue Per Treatment
An average calculated by the Total Revenue / Total Number Of Treatments
This describes the revenue each treatment is contributing to the total profit of your spa business. By learning more about this KPI, you can easily refine your menu to increase the overall profitability of your treatment offerings.
3. Revenue Per Guest
An average calculated by the Total Revenue / Total Number Of Guests
This discloses the average spend per guest and helps determine the relevancy of your treatment offerings and retail inventory, as well as whether or not adding new treatments or retail products will result in new revenue.
4. Treatment Room Occupancy
A percentage calculated by the Total Treatment Hours / Total Treatment Room Hours Available
This shows you the total usage of your treatment rooms and whether or not your spa is operating at full capacity.
5. Number Of Treatments Per Guest
An average calculated by the Total Treatments Sold / Total Amount Of Spa Guests
This brings to light how many treatments each guest books during their spa day, an important figure used to evaluate the average spend per guest to help identify opportunities for up-selling and cross-selling services.
6. Treatment Room RevPAR
An average calculated by the Total Number Of Treatment Rooms Available / Total Revenue
This provides a glimpse into the number of rooms booked at your spa and how much revenue is being generated from those bookings, allowing you to evaluate your overall revenue management strategy and how to maximize the revenue generated per room. If the RevPAR of your spa is increasing, it must mean your average booking rate or occupancy rate is increasing!
7. Payroll Cost
An average calculated by the Service Providers’ Wages / Total Revenue
This uncovers the true cost of the payroll process to help identify any areas where you can reduce expenses, such as overtime paid out to employees.
A percentage calculated by the Total Number Of Employees / Total Revenue
This represents how busy service providers are during scheduled business hours. To improve productivity and reach your staff’s optimal output, ensure your team is well versed in your products, services, and specialties. This knowledge can help lead to a more productive team that can both answer client questions and steer them in the direction of their favorite products or services.
9. Retail Sales
An average calculated by the Retail Sales / Total Sales
This tells you how much product is being sold inside your spa, and therefore, whether or not you’re curating the right inventory for your clients, or if you need to train staff on efficient sales techniques and product knowledge, or if you should provide more incentives to sell.
10. Transient Guests vs. Local Guest Capture
A percentage calculated by the Number of Non-Hotel Guests / Total Spa Guests
This measures the relevancy of your spa to guests who are not staying at the hotel. It can also indicate how irrelevant your spa is to the hotel guests.
KPIs are undoubtedly one of the most important management tools in your tool kit. Understanding what they are and how they affect the profitability and success of your spa operation is absolutely crucial.
KPIs tell a story and paint a picture of the current situation whether positive or negative: they can highlight areas where you need to drive revenue, possibly with an additional promotion or offer; they can identify training issues within the team; and they can also bring to the fore areas of your business that are just not working and need to be changed.
Now more than ever, spas need to identify KPIs and set business goals for their employees as they improve and adapt for a thriving future. Spa KPIs are beacons for the team to aim towards and can stretch the spa’s results well past the average. Are you ready to learn how we can help your spa grow into a booming success? Reach out to us and book a discovery call.