Spa Benchmarking-Everything You Need To Know!

What is Spa Benchmarking?

The word benchmarking was originally a term used by land surveyors and referred to a mark made on a rock or wall as a reference to determine the position or altitude in topographical surveys.

Benchmarks are key inputs for reliable business planning. They enable businesses to monitor performance and industry trends with the aim of improving competitiveness and profitability.

How Benchmarking is done?

The activity of Spa benchmarking incorporates measuring the performance of your Spa business using predefined metrics, and is performed in two major ways:

1. Internal benchmarking tracks and monitors the performance of the Spa business to identify growth or decline in specific areas over time.

2. External benchmarking compares the internal benchmarks of the Spa business against Spa industry benchmarks, the industry benchmarks combine the internal benchmarks of multiple Spas within a specific market.

 Industry benchmarks provide the average performance of those Spas within a specific area or a region.

Why Use Spa Benchmarking?

There are many business benefits to benchmarking. Benchmarks provide a clear understanding of market conditions and enable assessment of how the business is performing within the market.

The activity of benchmarking enables a business to make tactical and strategic business decisions based on facts rather than using gut feelings!

Why spa industry benchmarks Are Important to Higher Management and Investors?

Spa industry benchmarks are critical to the sound development of the industry and provide a clear understanding of market conditions. And it’s used to:

● Track and improve operational performance

● Identify potential business risks

● Highlight areas requiring improvement

● Discover opportunities to expand

● Control costs and increase profits

● Develop business plans

● Communicate goals and standards to employees.

By tracking internal benchmarks and comparing them against industry benchmarks, spas are able to stay on track and maximize their business performance.

Should You Compare to Non-Spa Facilities to Your Spa?

It’s vital to compare only Apple to Apple when it comes to comparing your Spa business analysis against spa industry benchmarks.

It’s not applicable to compare your Spa to beauty salons, hotel massage services, clinics and other types of businesses that do not offer spa treatments, simply because we are comparing them from a guest’s experience point of view, not just a service provider point of view.

How to Benchmarks According to Spa Profile?

Identifying Spa profile enable the characteristics of the spa to be measured. Some key spa type benchmarks are:

● Type of spa : day spa (no accommodation on site) or destination spa (accommodation on site).

● Type of spa by sub-type – club spa, medical spa, hotel spa, resort spa, salon spa, etc.

● Location – urban, regional, island, other relevant to the specific market such as state, province or city.

● Size – total indoor area, breakdown of indoor area and total outdoor area.

● Treatment rooms and stations – total number and breakdown of treatment rooms and Spa capacity

(single or double occupancy) and purpose of use (wet, dry or combination of treatments).

● Business structure – ownership, management and marketing structures.

● facilities available – availability of relaxation and other spa facilities such as : rooms, changing rooms and water-based support facilities : such as plunge pools and steam rooms.

● Treatments and services available – therapies, treatments, services, consultations, programs, activities and classes available.

● Pricing – starting prices of standard spa treatments by treatment time.

All the above information is vital when we are comparing our Spa to other Spas within a specific market in order to come up with accurate and reliable information.

What are Spa KPIs ?

Spa performance benchmarks or key performance indicators to monitor Spa business performance.

Spa performance benchmarks include:

● Revenue – total Spa revenue, average revenue per guest, breakdown of revenue by type of treatment/service, other revenue such as memberships and retail.

● Expenses – total Spa expenses, average expenses per service/product, cost of sale for retail, breakdown of expenses by type of treatment/service, other expenses such as salaries, benefits, training, contracts..etc.

● Guests – total Spa visitors broken down to In-House & Outsiders, average spent per guest or per visit, breakdown guests by demographics (gender, residence,age), repeat guests, and treatments sold.

● Payroll – total Spa employees, , breakdown by job type, qualification levels, salaries and benefits by job type.

What are Spa Metrics benchmark?

The collection of spa profile and performance metrics benchmarks enables the calculation of important analysis metrics which are used to determine the state of a spa business as well as the state of the industry.

 Key spa benchmark metrics include:

● Revenue ratios – average revenue per guest, treatment, occupied treatment room, available treatment room, massage table, square metre, therapist..etc.

● Expense ratios – average cost of, treatment or products sold as a percentage of revenue.

● Guests ratios – average visitors by number of rooms, operating hours and employees.

● Treatment ratios – average treatments per visitor, treatment room/area/station, therapist and average treatment prices.

I track my Spa metrics with the help of software and excel sheets J

What is  the future of spa benchmarking?

With more competitors coming into the market every year, Benchmarking programs are expanding to cover new spa markets and with continued education about ideal research practices and the benefits of benchmarking, the availability and range of reliable spa industry benchmarks is likely to expand.

Please let me know what you think , and let’s share our knowledge :)