The Financial Impact of Hotel Spa Departments: A Study of 297 U.S. Hotels

Hotel spas are a key amenity for luxury and ultra-luxury hotels, with savvy operators benefiting from travelers willing to spend on spa services. Spas are also mandatory for certain luxury and ultra-luxury brands, as well as required for Forbes Five Star Standards. The average spa revenue per available room (PAR) in 2024 was $6,061, with the highest revenue at luxury hotels and resort locations. Spa revenue as a percentage of total hotel revenue averaged 3.4% in 2024.

Hotel spas have emerged as a key amenity for luxury and ultra-luxury hotels, with savvy operators benefiting from travelers' increasing willingness to spend on spa services. According to CBRE's 2024 Trends® in the Hotel Industry survey, spas are mandatory under the brand standards for certain luxury and ultra-luxury brands, as well as a requirement to comply with Forbes Five Star Standards [3]. This trend is evident in the average spa revenue per available room (PAR) in 2024, which stood at $6,061, with the highest revenue at luxury hotels and resort locations [3]. Spa revenue as a percentage of total hotel revenue averaged 3.4% in 2024, highlighting the financial impact of spas on overall property operations [3].

The demand for luxury and ultra-luxury hotel spas is driven by various factors. Spas are not only a key selling point but also a necessity for many guests seeking wellness and relaxation. The increasing trend of contemporary bathhouses, which combine old-world bathing rituals with modern spa services, has also contributed to the popularity of hotel spas [3]. Additionally, the presence of spas in urban hotels caters to residents and local demand, while large convention hotels use spas to attract group business [3].

The financial performance of hotel spas is influenced by several factors. In 2024, the average spa revenue growth rate was limited to just 1.4%, with the greatest increases observed at urban and luxury hotels [3]. However, expenses and profits within spa departments declined, with labor costs being the primary driver of the increase in department expenses [3]. Despite this, the focus remains on driving additional revenue and traffic through day passes, memberships, and upselling services to increase profitability [3].

The strategic importance of hotel spas is further emphasized by the growing number of luxury real estate investments. For instance, Mubadala Investment Co. and Cain International recently formed a venture to deploy billions of dollars into global luxury real estate, with a focus on luxury hotel properties [2]. This partnership highlights the resilience and attractiveness of luxury properties, even amid financial volatility.

In conclusion, hotel spas play a crucial role in the luxury and ultra-luxury hospitality sector, driving revenue and enhancing the guest experience. Operators must continue to innovate and optimize their spa offerings to capitalize on the growing demand for wellness and luxury services.

References:

[1] https://www.marketwatch.com/story/intercontinental-hotels-shares-rise-on-consensus-beating-room-revenue-9030a12d
[2] https://www.bloomberg.com/news/articles/2025-08-12/mubadala-cain-venture-aims-to-spend-billions-on-luxury-property
[3] https://www.cbre.com/insights/articles/the-role-of-hotel-spa-departments