After a timespan now approaching three years when the world economy has experienced disruptions from Covid, many in the spa industry say the current year feels like the right time to recalibrate. As businesses adjust, a couple of emerging economic realities—product supply and pricing inflation—are frequent discussion topics among spa leaders.
Whether the rate of generalized price increases in the past year is following a natural economic trend or is a byproduct of the pandemic, “the return of inflation was one of the biggest stories of 2022,” as Coryanne Hicks writes for Forbes. “American consumers were coping with price increases the likes of which they hadn’t seen since bell bottoms were all the rage. So it’s only natural for people to be nervous about what’s in store on the inflation front in 2023.” That may be especially true in the spa world and other industries reliant on both professional service offerings and retail sales.
This text is intended to provide spa beginners and veterans alike with a better understanding of financial management.
A financial report, in simple terms, is your success scorecard. “Financial reports provide information on the health of the business. They are your measure of success,” says Rose Fernandez. vice president of sales for North America at Jurlique, based in Santa Monica, California.
Money, like politics and religion, is one of those things that isn’t supposed to be discussed at the dinner table. That said, we’re about to dive into the dollars and cents of the spa industry, so if you happen to be reading Pulse at a dinner table, now might be a good time to relocate.
The 2019 ISPA U.S. Spa Industry Study Compensation Supplement may not provide ideal mealtime conversation fodder, but it does offer a clear breakdown of how spa employees are compensated, what they earn and what the staffing picture looks like across the industry. A closer look at the numbers reveals some notable recent trends.
In an ongoing trend, more spas—especially luxury resorts—are adding automatic service charges to guests’ statements. The additional proceeds largely benefit spa employees, augmenting the general compensation structure that traditionally has included commissions and an hourly rate. Since coming out of the pandemic, some spas are even seeing an increase in the service charge amount.
An ISPA Town Hall session this winter featured a great discussion about the diverse structures of service fees and gratuities that other members are implementing—focusing on what’s working or not working well. Panelists Patrick McDirmit (Trilogy Spa Holdings), Suzanne Holbrook (Marriott International) and Taylor Fields (PCH Hotels & Resorts) joined ISPA Chair Patrick Huey to share their insights and expertise.