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U.S. hotel spas, a great source of revenue

NEW YORK – In 2015, hotel spa department revenue grew at a faster pace compared to other sources of hotel revenue. According to the recently released 2016 edition of Trends in the Hotel Spa Industry, U.S. hotel spa departments were able to increase their revenue by 5.6 percent from 2014 to 2015. This compares favorably to a 3.3 percent rise in rooms revenue for the properties in the survey sample, and a 5.5 percent increase in total hotel revenue. This is the first time since the 2007 edition of the publication that spa revenue growth surpassed rooms revenue growth.

“CBRE Hotels’ Americas Research is projecting modest gains in rooms revenue for the next few years as the U.S. lodging industry operates at the top of the business cycle,” said Mark VanStekelenburg, managing director of the CBRE Hotels practice in New York City. “Therefore, hotel operators will need to look at other operated departments, like the spa, in order to accelerate the growth of total hotel revenue.

“Health and wellness is becoming an increasingly important component of everyday life. Though historically considered as an exclusively high-end hotel amenity, the integration of health and travel is now expected, at almost all hotels,” VanStekelenburg added.

In 2015, spa revenue grew more robustly than total hotel revenue at both urban and resort hotels, as well as hotels with more than $1 million in spa revenue. Spa operations with less than $1 million in sales were the only properties where spa revenue growth lagged behind the increase in total hotel revenues.

CBRE Hotels has surveyed the profitability of U.S. hotel spa performance for ten years. The annual review compiles revenue and expense items within spas operated by U.S. hotels. Not included in the survey are hotel spa operations that are leased to an outside party, day spas or destination spa properties.

Strong Profit Growth
While hotel spa revenue is showing relatively strong growth, hotel spa department profits are increasing at an even greater pace. In 2015, hotel spa department managers were able to convert the 5.6 percent increase in revenues into a very strong 17.7 percent boost in department profits. In accordance with the Uniform System of Accounts for the Lodging Industry, department profits are calculated before the deduction of undistributed and fixed operating expenses.

Spa managers were able to achieve such strong gains in profits because they controlled their expenses. From 2014 to 2015, the combination of cost of goods sold, labor costs and other operating expense increased by just 2.1 percent.

“Labor costs comprise approximately three quarters of operating expenses for a hotel spa. Given the surge in hotel labor costs that we have seen in recent years, spa managers should be commended for achieving such strong flow-through within their departments,” VanStekelenburg noted. “In fact, it was a reduction in other operating expenses that offset the 5.8 percent increase in labor costs and allowed hotel spa departments to achieve the strong growth in profits.

“Because of scheduling challenges, spa department managers always have relied heavily on contracted employees. Now, in an effort to control labor expenses, we are starting to see other department managers increase their use of contract and leased employees to stem this rising cost within their departments,” VanStekelenburg observed.

A Bright Future
Recent economic reports have indicated increases in retail sales, auto sales, building materials and health and beauty products. “This is an indication that people are spending on themselves and bodes well for travel. Additional research shows that travelers are mindful of their well-being when choosing their lodging. Hotels have an opportunity to take advantage of this trend not just by promoting their spas, but by offering other health and wellness amenities and services throughout the hotel,” VanStekelenburg concluded.

* OPINION:

I think a lot of people are looking for spa hotels in order to relax. They make beauty farm trips in order to get, a balance, physical and emotional apart from the day to day. There have to be hotels of all kinds, but as we can see, the volume of business in these types of hotels is increasing.

Europe hopeful for steady 2017 after 'crazy' 2016

European hotel industry performance in 2017 will remain steady if unspectacular according to speakers at Whitebridge’s annual New Year Hotel Investment Summit, although that could change if any unpredictable, 2016-esque events occur.

LONDON—“Interesting” was how Nick Pattie, managing director of hospitality industry advisory Whitebridge, summed up the 12 months of 2016.

Whitebridge Director Philip Camble went one step further, speaking at the company’s 12th annual New Year Hotel Investment Summit, saying that 2016 was “one of the craziest years in history.”

“And 2017 will be chock-a-block full of events waiting to happen,” he added.

Pattie said of both years that “actual results are likely to be different from forecasted results.”

The terrorism incidents that befell France, Belgium and Turkey, Pattie said, stood large “against the grain of actual improved performance in Europe.”

“In the United Kingdom, demand dropped somewhat due to the weakness of the pound (sterling) … investment paused after Brexit, then there was a shrug of the shoulders,” Pattie said. He added the world will remain cautious of the political arena throughout 2017.

Forecasting is an unpredictable business, but among Camble’s educated hunches for 2017 are the following:

London revenue per available room will grow or decline by no more than 1%, with any minuses resulting mostly from continued corporate uncertainty and any pluses mostly from further declines in the value of the pound sterling;
the Eurozone will see more uncertainty, with perhaps Italy being the most volatile market in that region;
revenue per available room in France will grow by a minimum of 5%;
the present government in the United Kingdom will host an election by the end of the year or announce that one will be held in early 2018, and might also do a U-turn on Brexit;
confused messaging in hotel companies with numerous brands might lead to some rationalization; and
capitalization rates might slightly increase by this time next year.

Two slightly left-field predictions from Camble were that hotel rooms will offer by the end of the year at least one virtual reality tool, and 3D-printed food also will be served soon.

That might be showcased at next year’s Consumer Electronics Show in Las Vegas, or “it might come to a (Marriott-Starwood) hotel very near to you,” Camble said.

What we do know Thomas Emanuel, director of business development at STR, Hotel News Now’s parent company, was on hand to sum up 2016 “craziness” in data, the latest figures being year-to-date November 2016.

“In Paris, only 43 nights saw day-to-day occupancy growth in 2016,” Emanuel said.

Performance across Europe, he said, mirrored what he called the Farage Effect, after U.K. politician Nigel Farage, one of the most vocal proponents behind the Leave campaign for the U.K. to exit the European Union.

“The further away from Brussels (markets) are, the better were their performances,” Emanuel said.

European markets that did well in 2016, he added, included Dublin, which recorded a 17% increase in RevPAR in November 2016, and Warsaw, with 10% RevPAR growth.

“Poland had a tremendous 2016,” Emanuel said.

The U.K. industry fundamentals are strong, however, with a number of secondary and tertiary markets in the U.K. showing occupancy levels that are not matched across the rest of Europe, Emanuel said.

Supply in London will continue to be a challenge, with more than 15,000 keys in the pipeline.

“Only Russia, Germany and the U.K. have bigger pipelines than London,” Emanuel said.

Emanuel also gave predictions, led by the notion that demand will drop down to somewhat parallel supply, which is expected to increase across most markets.

There will still be performance growth in 2017, he said, but it will be diminished.

Europe’s star markets in 2016 can hardly be expected to sustain that growth in 2017, Emanuel said.

The U.K. will continue to do well, though, he said.

Secondary and tertiary markets in the U.K. show occupancy numbers that European countries as whole entities cannot boost, Emanuel said.

That occupancy, it is hoped, will absorb increased supply, he added.

Across Europe, the pipeline constitutes only 3% of all rooms, while in the Middle East that figure is 52%.

Following Brexit, STR downgraded performance in London but predicted slight improvement in regional U.K.

*OPINION:

"Brexit's" fault ", London will not increase its sales compared to 2017, will only vary by 1% both positive and negative.

Not long ago, the Ritz Carlton credit card was offering three free nights at a Category 1-4 Ritz Carlton property after you signed up for the card and met a minimum spending requirement. These days, the offer is now down to two free nights after you spend $4,000 on your card within the first three months of account opening.

Practically overnight, the value of this card dropped by 1/3. Is it still worth it? Well, that really depends.

First, the good news. The card is still offering two free nights at any Category 1-4 property, which can be a good value on its own. Considering a night at the Ritz-Carlton Aruba can easily be $800 or more, the signup bonus on this card can still be lucrative.

The problem? The Ritz Carlton card still comes with a $450 annual fee that makes your “free nights” less than free. It was a better deal when you scored three free nights just for signing up, but two free nights? Not so much.

Other Ritz Carlton Perks to Consider

Of course, the Ritz Carlton credit card comes with other benefits that can help offset the annual fee. The first one – and the best one – is the $300 annual travel credit you get as a cardholder each year. This credit card can be used to cover seat upgrades, in-flight meals and wifi, lounge access, and other in-flight luxuries. If you can make use of this credit year after year, that makes a huge difference.

Other benefits the card offers include:

*Priority Pass Select Membership with access to 1,000 airports worldwide (worth approximately $399)

*Global Entry Fee Reimbursement of $100

*An airline ticket discount good for $100 off special flights

*Gold Status with Ritz Carlton and Marriott

*$100 Ritz Carlton credit on paid stays of 2 nights or longer

*Three Club Level upgrades on paid stays of 7 nights or longer

*Is The Two Free Nights Offer Worth It?

If you’re deciding whether to pull the trigger on the offer with two free nights, it’s important to consider whether you can take advantage of the card’s additional benefits. Obviously, two free nights at a Ritz-Carlton can be worth quite a bit, but are they enough to offset the card’s $450 annual fee?

If you might buy the top tier Priority Pass membership (worth around $399) anyway, then the value of the Ritz-Carlton offer goes up tremendously. If you know you can take advantage of the $300 in travel upgrades each year, then that boosts this card’s value, too. Obviously, it’s smart to get the most out of the Global Entry credit and airline discount as well.

One of the biggest values of this card is on paid upgrades, however. If you pay for Ritz Carlton stays outright, the value of this card can shoot through the roof. At the Ritz Carlton Aruba once again, a Club Level upgrade can be worth more than $200 per night. On a paid stay of seven nights, you’ll easily score $1,400 in value from this one perk.

*OPINION:

itz Carlton is not being fully transparent since it offers 2 free nights. But it is not, since the cost of your card is equal or higher. But this card is not only inconvenient, but also has advantages. This credit card can be used to cover seat upgrades, in-flight meals and Wi-Fi, lounge access and other luxuries on the flight. If you can make use of this year's credit after year, that makes a big difference So when it comes to two free nights you'll have to think about it, since if you're not going to use the card for nothing else it does not come out profitable.

Is the Ritz Carlton Card Two Free Nights Offer Worth It?

Record numbers of tourists

visited UK in 2016

The US is Britain’s most valuable tourism source market, with 4.3 million visits recorded in 2016, up 7 per cent on the previous year.

More overseas visitors came to the UK last year than ever before.

According to official figures out Friday, 37.3 million inbound visits to the UK were recorded in 2016, up 3 per cent on 2015, with visitors spending a total of £22.2bn, in line with what they spent in 2015.

Visit Britain, the body funded by the Department for Culture, Media & Sport which produced the data, said that North America, Canada and the US particularly drove figures.

A total of 25.3 million visits were recorded from the EU in 2016, up 4 per cent on 2015. Last year’s overall figure marks a punchy 25 per cent increase on the level of inbound tourism recorded in 2010.

“The industry makes a significant contribution to our economy, and we will continue to support tourism to grow the sector further and promote the UK across the world,” sports and tourism minister Tracey Crouch said in a statement.

The figures mirror earlier data showing that the slump in the pound since Britain’s vote to the leave the European Union has enhanced the country’s appeal as a shopping destination.

Payment provider Worldpay in January said that spending by Chinese visitors had increased by 24 per cent year-on-year over the Christmas period, at least partially as a result of the fall in the pound.

*OPINION:

We can see that the figures reflect previous data showing that the fall in the pound since Britain's vote to the exit of the European Union has increased the country's attractiveness as a shopping destination. Chinese visitors have increased 24% over the previous year during the Christmas period because of the fall of the Pound.

British tourists flock to Valencia

Valencia received a record 95,106 British visitors in 2016, 19.9 per cent more than in 2015 and, with new direct flights from London Luton, Birmingham,
Glasgow and Edinburgh being launched in the next few months, that figure is expected to grow further this year.

Overall, 976,133 million foreign tourists visited Valencia last year, with Italians being the largest group, followed by the British.

There were 450,000 new seats on international air routes in total, and capacity for the winter 2016/17 season alone increased by 20 per cent.

Ryanair recently announced new flights from Edinburgh to Valencia for winter 2017/18, in addition to a new route from Glasgow starting on March 27th, and the existing flights from London Stansted, East Midlands and Manchester.

Monarch is also launching its first direct flights to Valencia from Birmingham, operating twice weekly from June 22nd.

Finally, easyJet has just started flying three times a week to Valencia from Luton, adding to its existing route from London Gatwick.

Cruise tourism is also on the up, with 403,564 passengers arriving in 2016, a 7.7 per cent increase on the previous year.

A total of 210 cruise ships are expected to dock in Valencia this year, ten per cent more than in 2016, bringing in approximately 450,000 passengers.

Valencia remains a popular destination for British travellers, offering a privileged location by the Mediterranean Sea with a mild, sunny climate, and a great combination of culture, historic buildings, amazing architecture, diverse shopping opportunities, a rich gastronomy and vibrant nightlife.

*OPINION:

Valencia está creciendo como destino turístico, en los últimos meses ha aumentado los turistas y durante este año aumentaran la frecuencia de vuelos desde diferentes aeropuertos de UK y recibiran más de 210 cruceros. Podemos ver que la economía de Valencia está en crecimiento gracias al turismo.