How do I know when it's the right time to increase spa prices?

Start with a review of your budget and actual numbers for the past year, looking closely at treatment revenue and room occupancy. Calculate increases in professional product costs associated with treatments, along with increases in other key areas such as property taxes and rent. Also take time to check out pricing at competitive spas in your area - but do so remembering that pricing is really about your customer service. Consider the 80/20 theory. This means that 80 percent of your business profits come from 20 percent of the services you offer. Chances are that whether these services involve massages or signature skin treatments, your expenses need to be adjusted annually. Remember that the goal is to maintain consistently high quality while making sure your bottom line remains stable (preferably with an upward swing).

The top 20 percent represents the services your clients prefer and will probably be willing to pay more for if presented properly. One creative way to increase pricing on these treatments is to shift price them. Consider raising the price but offering a lower rate (the existing one) during hours when the rooms are least occupied, providing several cost options to frequent clientele.

The other 80 percent of your treatments can be placed in department profit categories to determine whether or not they need to be increased. Many shorter services have a higher revenue production based on the length of time needed to turn the room. Try packaging these treatments with your exclusive services to increase overall revenue.

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