Average Treatment Rate (ATR) for Hotels?

For hotels with a spa or wellness center, understanding the Average Treatment Rate (ATR) can help you maximize revenue and elevate the guest experience. 

ATR, defined as the average amount each guest spends on spa treatments during their stay, is a vital indicator of your spa's financial health and guest engagement. Let’s take a look at its impact and how you can work to increase it for your services.

Why Does ATR Matter for Hoteliers?

Understanding your ATR gives you a competitive edge. This metric offers valuable insights that can transform your spa operations and significantly add to your hotel’s revenue. Here’s how:

1. Measure and Maximize Spa Profitability

Spas are crucial revenue drivers for full-service hotels, often delivering higher profit margins than traditional amenities. ATR is a powerful tool for assessing and improving your spa's financial performance in the context of your hotel operations. 

• Compare ATR against operating costs to gauge your spa's financial performance.
• Identify high-margin treatments and services to focus your efforts.
• Use ATR trends to forecast revenue and plan staffing levels more effectively.

2. Craft Winning Pricing Strategies

Did you know that adjusting your pricing can be an effective way to boost your earnings? Your ATR data can inform dynamic and strategic pricing decisions, helping you maximize revenue without compromising guest satisfaction. 

• Analyze ATR patterns across seasons, days of the week and guest demographics.
• Implement dynamic pricing for treatments based on demand and occupancy rates.
• Strategically position premium services to elevate overall ATR.

3. Develop Targeted Promotions

By giving you further insight into what services guests want (and what they’re willing to pay for them), your ATR can help you create compelling offers that drive both guest spending and satisfaction.

• Create enticing package deals that boost ATR while enhancing the guest experience.
• Design loyalty programs that incentivize repeat spa visits and higher spending.
• Tailor promotions to different guest segments, from business travelers to couples on romantic getaways.

4. Enhance Guest Experience and Loyalty

A strong ATR often correlates with high guest satisfaction. Use this metric to inform decisions that improve the overall spa experience.

• Use ATR insights to know which treatments and equipment to invest in.
• Train staff to upsell and cross-sell effectively, focusing on guest needs and preferences.
• Leverage ATR data to personalize spa recommendations for returning guests.

5. Streamline Operations

Your ATR data can reveal opportunities to enhance operational efficiency across your spa and hotel, which also results in reduced costs.

• Adjust spa hours and staffing based on periods of high ATR to maximize efficiency.
• Identify and eliminate underperforming treatments or services that drag down your ATR.
• Use ATR insights to negotiate better deals with product suppliers and treatment providers.

How to Calculate Average Treatment Rate 

We know that guests will pay an average of $160 per visit to a hotel spa, but it’s also important to understand how that total is split between services — that’s where the Average Treatment Rate comes in. First, let’s define some terms: 

• Total Spa Revenue: This includes all income generated by the spa, such as massage treatments, facials, body wraps and other services.
• Number of Spa Treatments Sold: This represents the total number of individual spa treatments booked by guests during the analyzed period.

Here's the ATR formula:

ATR = Total Spa Revenue / Number of Spa Treatments Sold

Now, let’s consider an example: 

Let’s say your total spa revenue for last year was $20,000, and the number of treatments sold was 100. 

This is the formula you’d use: ATR = $20,000 / 100 = $200

So, your hotel’s ATR would be $200, indicating that on average, guests spend $200 per spa treatment. 

‍

3 Ways to Optimize Spa Revenue with Technology

According to a recent study by Statista, the global wellness tourism market is expected to reach $8.47 trillion dollars by 2027. 

By embracing innovative technology like Canary Technologies' hotel management software and focusing on guest personalization, you can capitalize on this growing market and unlock significant revenue opportunities within your spa operations. 

Here's how Canary can help you improve your spa's average treatment rate:

1. Personalized spa service recommendations: Canary AI analyzes guest data to recommend tailored treatments that align with their specific needs and interests. This can lead to higher treatment selection and increased spending.
2. Convenient booking and scheduling: Allow guests to easily book and manage spa appointments through their mobile phones, potentially increasing bookings.
3. Upselling and cross-selling opportunities: Canary's platform facilitates targeted communication with guests, allowing you to offer enticing upsells and spa packages to encourage higher spending.

By creating a seamless and personalized spa experience, Canary can help you drive guest engagement, increase ATR and ultimately, boost your spa's overall revenue.

Looking for additional ways to enhance your hotel's guest experience? Explore our blog post featuring creative ideas for in-hotel guest activities.

‍