Luxury Hotel Spas Feel Global Economic Pinch

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(NASHVILLE, TN) -- According to data released today by Smith Travel Research (STR), luxury spa participants in the Spa STAR performance report continued to show declining performance metrics through the third quarter of 2009.

Through September year-to-date, the Average Treatment Rate (ATR) for the participating spas was US$146, a decline of 10 percent from the first nine months of 2008. For the same time frame the Average Daily Rate (ADR) for luxury hotels tracked by STR decreased 17 percent to US$240.

"As spa and hotel operators in the upper end of the market are looking for the next winning formula and are trying to attract a more value conscious market it should come as no surprise that ADR and ATR are falling in lock step," said Jan Freitag, VP at STR.  "Unfortunately, the utilization rates of treatment room hours and guest rooms were also falling."

Through September, treatment room utilization fell 3.7 percent to 29.8 percent. STR reported that luxury hotel occupancies for the first three quarters were 61.9 percent--12 percent below last year's figure.

"The rate of decline in the treatment room utilization is so much less than in the guestroom occupancy, which could be an indicator of a better capture rate of hotel guests or more promotions to attract a local audience," Freitag said.

Data from the Salon portion of the luxury spa report matches the declining trend in Treatment room performance. Through September, the Average Salon Rate (ASR) declined 3.1 percent to about US$62.  For the same period, the average salon station utilization declined 12.5 percent to 20 percent.

"The more moderate ASR decline is a good sign," Freitag said. "It will make rate increases easier once the demand numbers improve."

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