In terms of revenue management, the spa industry has learned lots from the standards that the hotel industry has been using to measure performance. In fact, it was from the hotel industry’s REVPAR (revenue per available room) that we delved into the time element of our operations and adopted REVPATH (revenue per available treatment hour) as one of the most important key performance indicators (KPIs) in our field.
Recently, however, the hotel industry has been questioning some of the restrictions posed by REVPAR. For example, this KPI only talks about room revenue without considering the income generated by other revenue departments such as Food & Beverage and Spa. The same problem has been duplicated in the spa industry with REVPATH, which uses a formula that is almost exclusively concerned with the revenue generated by treatment rooms and that leaves out other important sources of income, such as membership and retail revenue.
The possible solution…
To deal with this pitfall, the hotel industry has now introduced the interesting concept of GOP PAR (gross operating profit per available room), which offers a good indication of the overall profit generated by the hotel property. By moving beyond the income generated by only room revenue, this KPI offers a more comprehensive approach that takes into consideration management control and efficiency.
What should we do?
We now ask ourselves whether the spa industry, and its REVPATH, faces the same restrictions whilst measuring the true performance of our spas as hotels do with REVPAR. Perhaps introducing GOP PATH (gross operating profit per available treatment hour) will give a real picture of what our spa businesses are really worth?
We would love to hear what other industry professionals think about introducing GOP PATH as new KPI for our industry. Email us at firstname.lastname@example.org and let’s continue the discussion!
For more information on this subject, please read the following article: GOP PAR, A Derivative of REVPAR!