Spa Trend - Incorporating CRM in your spa

---

By looking at past information on bookings, guest stays, purchased rates, and guest behavior and activities, hotels can now personalize experiences for individual customers. Within this framework, the hotel sector is shifting towards Customer Relationship Management (CRM), focusing on aligning all hotel operations with the expectations of the right customer at the right time.

The spa sector stands to gain significant advantages from the hotel industry in terms of yield management and revenue optimization. Given the similar challenges in pricing and rate management, embracing the customer-focused strategies of the hotel industry seems like the most appropriate path for the spa industry to follow.

First, it’s important to understand the concepts of yield management and revenue management.

Yield Management – understanding, anticipating and influencing guest behavior to maximize profit.

Yield Management is a subset of Revenue Management that specifically targets room occupancy, while Revenue Management encompasses all revenue optimization strategies across the establishment. Both aim to enhance hotel occupancy during low-demand periods and increase hotel revenue during high-demand periods.

---

From revenue management to price management

The idea of revenue management, based on capacity-driven tactics, emerged in the early 1980s following the deregulation of the airline industry in 1978. Revenue Management Systems (RMSs), previously based on capacity-driven approaches, factored in various elements such as a set quantity of resources, the availability of those resources, the price passengers were prepared to pay for their seats, and the categorization of products offered on a flight.

The groundbreaking and prosperous method was quickly adopted in various fields, such as the hotel sector. However, by the 1990s, it became clear that what worked well for airlines was not entirely suitable for hotels. As a result, the hotel industry shifted from a capacity-focused revenue management system to a new model where pricing took precedence in the strategy.

This marked the moment when dynamic pricing strategies were first introduced, revolutionizing revenue management in the hotel sector. By implementing price management techniques, hotels can boost their revenue by as much as 5%.

---

How does CRM help increase hotel revenue?

Hotels utilize customer relationship management software to access guest information and manage interactions with guests throughout their stay, including online check-in, message exchanges, loyalty campaigns, and more. Teams responsible for guest relations leverage this software to analyze client profiles and tailor the guest experience, ensuring a seamless and personalized journey that meets their expectations and needs at various points during their stay.

By looking at past informationon bookings, guest stays, booked rates, and guest activities, hotielers can now create customized and personalized experience for various customers. In this scenario, the hotel sector is progressively transitioning from price management to Customer Relationship Management (CRM), a fresh strategy aimed at aligning all hotel operations with the preferences and expectations of the right customer at the right time.

---

The Spa Industry has historically lagged behind

During the 1980s and 90s, spas were still a developing sector that looked to the hospitality sector for its business model. Over the years, the spa industry encountered difficulties in establishing standardized performance measures, particularly as technology progressed and spa visitors became more selective. Some might argue that spas faced an identity crisis, needing to differentiate themselves from their hotel counterparts. The spa approach involved creating a list of services, setting time limits for these services, and charging clients accordingly. By staying true to the core concept of offering an escape from daily life within the allocated time, this model remains relevant today.

---

The Next-Generation of Spas

By familiarizing oneself with the guest and understanding their expectations and needs, the hotelier can tailor the services and recommendations provided to them. By inquiring about their preferences, the guest is more inclined to seek advice and request any necessary assistance from the hotel during their stay. Sound familiar?

Most spas are currently gathering this data but failing to utilize it for analyzing trends and tailoring their services to match consumer purchasing behaviors. This challenge has been a one of the most significant obsticales for the spa industry for the past decade.

Similar to hotels, spas face a major hurdle in establishing a comprehensive brand encompassing their entire service offerings. To achieve this, spas must adopt a holistic logistical strategy, leverage modern technology extensively, and engage actively with customers. While this may seem daunting, this emerging challenge also presents the most significant business opportunity for the spa sector now and in the future.

---

Hey Next-Geners,

Let's talk about this. Share your thoughts, ideas and challenges you face incorporating CRM in your business. Join the Certify Delight discussion online.

Kimberly