How to use Spa to drive RevPar & Room Occupancy
bb Bridget Baker Consulting How to use Spa to drive RevPar & Room Occupancy UK Spa & Wellness Conference 10 November 2010 Services to the Hotel & Leisure Sector • Market demand studies and financial feasibility studies • Acquisition & Due Diligence advice • Operational reviews • Strategic advice for existing & new businesses • Planning advice • Market positioning and expansion plans bb What is RevPar? Room Occupancy x AARR Room Occupancy = ratio of total bedrooms sold AARR = Average Achieved Room Rate = Net room rate after taxes, breakfast and discounting Why is RevPar important? • Measure of hotel bedrooms performance • Allows benchmarking against competition • Hotel Bedrooms usually represent more than 50% of total revenue • Hotel bedrooms usually highest profit margin in a hotel What doesn’t it account for? •Other Revenues including Food & Beverage, Spa, other leisure •Non residential business eg Day spa customers •Retail sales, rentals •Revenue per square metre •Cost performance •Profit levels bb Optimising the RevPar Hotel A • Occupancy 55% • AARR £120 ? Hotel B • Occupancy 75% • AARR £88 bb RevPar £66 bb Hotel Performance UK 2010 YTD August Occ% AARR Revpar London 81.9% £127.37 Country House 65.3% £85.54 2009 Occ% AARR RevPar £104.32 81.1% £126.40 £102.51 £55.86 £85.13 £53.97 63.4% Where are the Opportunities? Months December November October September August July June May Ap ril March February January Occupancy % Average Occupancy –London Hotels 95.0 90.0 85.0 80.0 75.0 70.0 2010 65.0 2009 2008 Average Occupancy – Country House Hotels 80.0 75.0 2010 65.0 2009 60.0 2008 55.0 50.0 Months December November October September August July June May April March February 45.0 January Occupancy % 70.0 Seasonality – Days of Week London 105.0 90.0 75.0 60.0 45.0 30.0 15.0 0.0 86.4 86.0 77.2 81.7 88.7 81.3 Days of Week rd ay Sa tu ay Fr id ay ur sd es d ed n W Th ay y da Tu es ay on d M ay 62.1 Su nd Occ % London Daily Occupancy 2009 AARR - London £160.00 £150.00 £140.00 £130.00 £120.00 2010 £110.00 2009 £100.00 2008 Months December November October September August July June May April March February January £90.00 RevPar - London £150.00 £140.00 £130.00 £120.00 £110.00 £100.00 £90.00 Months December November October September August July June 2008 May £60.00 April 2009 March £70.00 February 2010 January £80.00 AARR – Country House £110.00 £100.00 £90.00 £80.00 £70.00 2010 £60.00 2009 2008 Months December November October September August July June May April March February January £50.00 Seasonality – Days of Week UK Regional Upscale 100 102.00 90 100.00 80 98.00 70 96.00 60 94.00 50 92.00 40 90.00 30 88.00 20 86.00 10 84.00 0 82.00 Sun Mon Tues Occ % Weds Thur Fri AARR £ Sat Average Room Rate £ Occupancy % Regional UK & Luxury Upscale (running 28 day total to 9th October 2010) RevPar – Country House Hotels £80.00 £70.00 £60.00 £50.00 £40.00 £30.00 2010 2009 Months December November October September August July June May April March February January £20.00 2008 Seasonality – RevPar UK Regional Upscale Regional UK & Luxury Upscale (running 28 day total to 9th October 2010 100.00 90.00 80.00 RevPar £ 70.00 60.00 50.00 RevPar 40.00 30.00 20.00 10.00 0.00 Sun Mon Tues Weds Thur Fri Sat AARR – Country House & Spa Hotels AARR Country House & Spa Hotels 100 95 AARR £ 2007 90 2008 2009 85 2010 80 75 Country House Spa Hotels Year Non spa Are Spa Hotels Maximising their USP? Occupancy County House & Spa Hotels Occ % Occupancy Country House & Spa Hotels 70% 69% 68% 67% 66% 65% 64% 63% 62% 61% 60% Country House Spa Hotels Non spa 2007 2008 2009 Year 2010 RevPar – Country House & Spa Hotels RevPar Country House & Spa Hotels 65.00 60.00 RevPar £ 55.00 Country House 50.00 Spa Hotels 45.00 Non spa 40.00 35.00 30.00 2007 2008 2009 Year 2010 Spa Packages – Impact on RevPar • Impact on RevPar depends on package breakdown • Are spa packages maximising Revenue? Package choices • Day Package £59 £79 = (1 treatment, lunch, leisure use) • Spa overnight package – £99 per person • Bed & Breakfast £129 - £175) = B&B allocation (after spa use) £40 - £80 bb Issues to consider when setting Spa package prices • Days of week • Bedroom source markets & price points • Slow demand in spa area • Residential versus Day use • Maximising revenue from both bedrooms and spa allocation bb Why should we monitor maximisation of spa use? • Historic Trends give indication of possible future trends • Budgeting with base of knowledge • Where shall we spend our marketing budget? • Assists in staffing rota’s • Proactive not Reactive Decision Making • Maximisation of Revenue & Costs bb Bridget Baker Consulting Ltd Phone 44 (0)1273 560655 Mobile 0794 1461180 [email protected] www.bridgetbaker.co.uk bb
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