Booking Profits Through Spa and Golf

By Bradley Schmidt • Assistant Editor | November 01, 2007

Favorable capital markets in the once hot U.S. real estate market, coupled with near record RevPAR gains, fuelled a hotel construction boom across the country, especially in city revitalization projects. This development meant one thing for the hospitality industry -- competition. New builds had to come on the market with something fresh to differentiate themselves from more established locales, older properties had to modernize to keep up with the market, and both of these groups were tasked with meeting guest demand.

Key factors in the hot market were spa and golf course development. One way hotels found that they could compete effectively was tight yield management of spa and golf amenities--a new practice in these areas, but one that is catching on at record speed.

Integration: mission critical
System integration is the real driver behind a hotel's ability to use spa and golf management systems successfully. "The biggest thing that golf management systems (GMS) can do for hotels right now is integrate-ability," notes Soren Spiers, regional controller of PGA Golf Properties. "Very few are able to integrate directly into the property management system (PMS), and that is absolutely critical."

Without communication between these systems and the PMS, reservations agents would be unable to schedule facilities and activities directly onto guest records, ensuring miscommunication and inaccurate demand forecasts.

This has the greatest effect on hotels during down seasons when selling tee times and spa bookings for the highest dollar amount is crucial. For Steve Harker, manager of golf sales and performance for Walt Disney World Golf, down times are when integration matters most.

Disney uses the OpenCourse GMS ( www.opencourse.com) which is tied into numerous sales systems including commissioned sales channels for golf packagers and the Disney Vacation Club system. Discounted rates are also made available through OpenCourse to Florida resident members of Disney Golf as well as all of Disney's 58,000 employees.

Harker indicates that each of these sales channels will remain open during a slow booking period until new demand forecasts are issued. If bookings have picked up, Disney will respond to the increasing demand and close off those sales channels which yield lower profits per tee time for Disney. "The idea is to control what different market segments the customer will have available to them," Harker says.

Harker recalls the time before such a system was in place and remembers the drawbacks clearly. "We no longer had to get stuck with one set of rates," he says. "In the golf business, every tee time is a perishable commodity. Every empty slot is one for which you can never recoup those revenues."

Yield management at the spa is slightly different. The end goal is the same, but whereas with golf the property is trying to fill every slot, in the spa it is important to consider what types of services are being booked and when. Darren Graichen, rooms executive at the Hyatt Regency Scottsdale Resort and Spa at Gainey Ranch, cautions that spa management system (SMS) functionality can be easily misused. He notes that successful spa scheduling hinges on layering services that utilize all treatment rooms throughout the day, rather than creating mid-day bottlenecks.

The Hyatt Regency Scottsdale uses the Spa & Sport Software Reservation Assistant by TAC (www.reservationassistant.com) to manage the process. "We certainly use all of the tools that our SMS gives us to run at full capacity or as close as we can get to it," Graichen says. "But you must map out the day so that you don't create spikes that will limit treatments that can be done before and after peak times."

Marketing
When a guest books a tee time, they do it because they want to play golf. The spa, however, has more subtleties. Guests can get facials, scalp treatments, hot rock massages -- you name it. Not everyone books a spa appointment for the same reason. Thus marketing plays a slightly different role on the spa side compared to the golf side of hotel operations. Either way, the GMS and SMS are crucial components to any type of campaign.

"There is a lot of money spent on golf travel in the U.S.," says Harker. "It is a wealthy demographic that is willing to spend and travel. They like to see different courses." Marketing on the golf side, then, is about giving guests the opportunity to golf, if possible at a lower rate, as part of a package.

Judy Stell, spa director at the Umstead Hotel and Spa in Cary, North Carolina, sees 50 percent of her business from the local population around the hotel and 50 percent from hotel guests. This necessitates dual marketing efforts, a phenomenon common to spa marketing.

Stell indicates that most marketing is done via e-mail, the addresses of which are garnered from their Springer-Miller Systems SpaSoft ( www.springermiller.com) system and their PMS. This presents Stell the opportunity to gather information from the PMS and upsell to guests staying at the hotel, but who have not made spa reservations. They do separate targeted e-mail blasts to repeat guests with information from the SMS.

"The integration of the PMS and SMS has helped boost attendance at the spa and increase revenue," she comments.

The versatile nature of the spa guest underscores the importance of the SMS to marketing for Graichen as well. From the system, Graichen is able to extract reports showing the number of visits for each guest, the kinds of treatments they had, how much was spent, and because of integration to the POS, whether they made retail purchases.

"We can tell whether they're in town for a holiday, if they'll be in periodically throughout a particular season or if we'll see them during the high season," Graichen says. "Every week we can approach them differently."

Next stop: Orbitz?
Discussions indicate that despite the relative newness of hospitality-industrystyle yield management techniques to spa and golf management, there is a demand within the industry for something more. The expected evolution of spa and golf management is a national reservations system along the lines of an Orbitz or HotWire booking engine. PGA regional controller Spiers believes offerings straight from the big online retailers would be even better than a separate national golf reservations system.

"Right now there is no national reservation system for golf," says Spiers. "Travelocity, Expedia-- they don't do golf. Being able to patch into those systems would be one of the best decisions that could be made for the industry."

Graichen agrees with Spiers, with the caveat that any national spa reservations system would have to ensure proper mapping around peak times. Overall, he considers it a good idea.

Harker believes that hotels are already moving in this direction. "Hotels are realizing that spa and golf are really good ways to put extra heads in beds," he says. "The more we as an industry can tie systems together to let people customize their vacation experience, the better we're going to do. Customers are going to be more loyal to any one place that can put all of that together." HT

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