Spa Space Sponsors ISPA Town Hall with Hospitality Expert Jan Freitag

The National Director of Hospitality Analytics at CoStar Group, joined ISPA Chair Patrick Huey for a candid conversation on the great resignation and importance of innovation and a hyper-focus on guests’ needs.

We were thrilled to sponsor the Town Hall “Mapping the Hospitality Industry's Recovery.” Jan always presents the most useful data on the hospitality industry. This data was especially interesting given it maps the recovery following the week of April 7, 2020—the single worst week the US hotel industry.

 

Here are some highlights from the conversation:

Jan’s Thoughts on Recovery

From a high level, what we're saying is “the recovery” is ongoing, no doubt about it. Travel is here and here to stay. And what we're seeing is that occupancies are coming back quite nicely. From a low of less than half the rooms filled in 2022, we're expecting over six out of ten rooms filled. And then what's good to see is that room rates are coming back quite a bit. Now, we're coming off a very low base, I get that, but still just think about the pricing power that we have in this industry. But that said, we always want to compare ourselves to 2019.

What we're seeing is that rev par revenue per available room, which is the metric that the hotel industry mostly uses, was 50% off, and I was 20% of this year, and then it's almost even in 2020, not quite, we have another chart where maybe you can bring that up crystal where we can talk about how we're doing compared to 2019, when we're indexing it, this is a very different way of looking at the world. 

What's been super interesting to see is how quickly room rates have recovered, especially in leisure destinations. If you have a beach or access to the mountains, you are doing quite well. Places like Miami and Aspen saw a sharp decline in the beginning of 2020, but then in the summer of this year, they have come hack guns blazing, so to speak. Room rates are in some instances at an all time high already. We expect more of that going forward.

 

Labor Is “Giving the Spa Industry Heartburn”

Jan confirmed that workforce issues are the foremost challenges facing hospitality businesses and talked about how our labor costs and hiring difficulties are impacting recovery:

Labor is the single most important topic that gives spa operators some heartburn right now because it's the great resignation, people are switching jobs left and right. The hotel industry has historically not been great at paying very high wages and giving great benefits. We have lost hundreds of 1000s of workers in the hotel space, and we may never see again. So it's a huge issue. I think we're going to see wage inflation…it's really, hard to find people and if you have them, they have one foot out the door. So how do you make sure that they stay?

 

Innovation Through Automation

Jan mentioned contactless check in and dynamic pricing as essential for profitable spa operations going forward. 

We're going to see a lot more innovation around automation. Your phone will be your room key going forward, no need to stand at the front desk in a line 30 deep. Just get a text and you're on your way.

Dynamic availability, (using technology) to book higher margin treatments during peak demand, is something the spa industry should look at more carefully. There's a lot of money left on the massage table. Demand In the spa industry used to be constrained by space, how many treatment rooms they had available, but now they're constrained by staff, how many massage therapists and estheticians are available. It’s a very different way to look at the business.

 

Click here to watch the Town Hall https://www.youtube.com/watch?v=nGJr6EvM3FM

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