Perishable inventory. One might think of
a spas inventory as its rooms and therapists,
but instead, spa inventory should be thought
of as time—or, in this case, the time during
which the spa’s capacity (both rooms and
therapists) is available. If the spa is not
fully occupied for a period of time, that part
of the spas inventory perishes. This is the
key to the strategic revenue management
framework, and it is the element we believe
has been missing in most approaches to spa
revenue management. Instead of measuring
costs or revenue for a given month, spa operators
should measure revenue or contribution
per available treatment-hour (RevPATH).
This measure captures the time factor
involved in the spa business. Revenue can
come from a variety of sources, including
regular and upgraded treatment fees and surcharges
for particular rooms or therapists.