WHEN AND HOW MUCH
After calculating the profit margin of each treatment on the spa ’ s menu and sorting them into the appropriate category , the next step in developing a revenue management strategy is analyzing bookings to determine ( A ) when the spa is typically at its busiest and ( B ) which treatments are most in demand from guests . Making these determinations is essential because effective revenue management often requires prioritizing the availability of services that combine a high ROI with high levels of popularity .
Consider the graphic below , which illustrates three different approaches to booking at a spa with three available treatment spaces ( TR # 1 , TR # 2 , TR # 3 ).
● In scenario A , services are booked with no regard to the spa ’ s hour-by-hour demand nor the margin of the treatments being booked . The spa in this scenario simply fills each available unit of time as guest request specific treatments . The spa ’ s high-demand period is filled
TIME
SCENARIO A SCENARIO B SCENARIO C TR # 1 TR # 2 TR # 3 TR # 1 TR # 2 TR # 3 TR # 1 TR # 2 TR # 3
10 am |
UNSOLD |
UNSOLD |
UNSOLD |
UNSOLD |
UNSOLD |
LOW DEMAND
11 am |
UNSOLD |
UNSOLD |
UNSOLD |
UNSOLD |
12 pm |
|
|
|
|
1 pm |
|
|
|
|
HIGH DEMAND
2 pm
3 pm
4 pm
LOW DEMAND
5 pm
UNSOLD
6 pm
UNSOLD UNSOLD
MARGIN $ 100 $ 50
$ 25
# SOLD |
# SOLD |
# SOLD |
3 |
10 |
15 |
7 |
6 |
2 |
13 |
7 |
7 |
TOTAL YIELD : $ 975 *
TOTAL YIELD : $ 1,450 TOTAL YIELD : $ 1,750 * Total represents the combined profit of all services performed under each scenario .
18 PULSE ■ SEPTEMBER 2021