ispa 2006 the financial reality

Copyright 2020. Creative Spa Concepts Inc. All Rights Reserved.

What Everyone Should Know About Spa Development Part III


THE FINANCIAL REALITY

As presented at ISPA 2006Prepared and presented by: Mitch Jucha


How much revenue will the spa generate?

How many treatment rooms should be programmed?

THE FINANCIAL REALITY

Is the project financially feasible?


Necessary Information:

Hotel Occupancy

Guest Type

FINANCIAL PROJECTIONS

Consumer Profile

Area Foot Traffic

Local Demographics

Amount/Proximity of Competitors


Leisure Guest

Group Incentive and Non-Incentive

Business Traveler

SPA GUEST TYPES

Local Guest


Resort Hotel X

500 rooms

75% occupancy

SIMPLIFIED PROJECTION

Leisure Guests 450 (80%)Group Guests 112 (20%)

Guests per room 1.50


**Leisure Guests 10%+

Group Guests 5 -15%

Business Traveler 5 -10%

AVERAGE CAPTURE RATES*

*Many factors can impact guest capture rates. Reviewing annual industry benchmarks for your region will ensure accurate projections.

**Leisure capture rates can vary dramatically from region to region. Spa type will also have an impact. For example , Destination Spas will enjoy much higher captures than other spa types, as spa is a central focus of the guests visit.



Total Leisure Guests Available 375Total Group Guests Available 94

Expected Leisure Guest Capture Rate 20%Expected Group Guest Capture Rate 10%

Projected Leisure Guest Demand75

Projected Group Guest Demand 9

Total Spa Guest Demand 84



Guest Demand 84

X

Treatments per Guest 1.50

X

Price per Treatment $100

=

Total Revenue $12,600


SIZE MATTERS

FINANCIAL PROJECTIONS


Is the project financially feasible?

FINANCIAL FEASIBILITY

Investors expect to see a minimum of 20-25% annual rate of return and as much as 50-100%.


DEVELOPMENT COSTS

Architecture and Interior Design

Real Estate

Construction

Spa Consultant

Permits


PRE-OPENING EXPENSE

Furniture, Fixtures and Equipment (FF&E)

Marketing and Public Relations

Operational Expenses

Cash Reserves

Operating Supplies and Equipment (OS&E)

Payroll and Training

Slide Number 1THE FINANCIAL REALITYFINANCIAL PROJECTIONSSPA GUEST TYPESSIMPLIFIED PROJECTIONAVERAGE CAPTURE RATES*SIMPLIFIED PROJECTIONSIMPLIFIED PROJECTIONFINANCIAL PROJECTIONSFINANCIAL FEASIBILITYDEVELOPMENT COSTSPRE-OPENING EXPENSE

ispa 2006 the financial reality

Documents

creative spa concepts

spa types

spa development

total spa guest demand

guest capture rates

leisure guest group

leisure capture rates

total group guests available