The purpose of this paper is to illustrate financial benefits of spa operations in resorts by developing a spa revenue contribution technique/method.
This purpose is achieved by utilizing current industry and academic literature in the fields of hospitality and resort management.
The results show that a hypothetical resort with 300 rooms would achieve a spa revenue per occupied room of $40.08 which translates into additional annual revenue of more than $3,500,000.
One of the implications of this study is that a well‐run spa may contribute approximately US$28 per available room. Another practical implication is that spas are important generators of additional revenue as they may contribute, at times, over 20 percent to room revenue by using considerably less space than resort/hotel rooms do.
This paper derives its value from developing a specific technique to support the common notion that a well‐operated spa makes a significant contribution to resort revenues.
