Average Treatment Rate (ATR) is most relevant for spa or wellness operations in a hotel or resort property. It can apply to spa operations within a hotel or from an independent operator. It determines the average rate for treatments that guests receive in the spa.
It can also be used to calculate the average spa revenue per occupied room in a hotel or resort. ATR helps with revenue management because it gives a clearer picture of overall spa performance across the variety of treatment packages offered.
What is Average Treatment Rate For?
Average Treatment Rate (ATR) is used to calculate the average rate guests pay for treatment at the property’s spa or wellness center. Because many spas offer different treatment packages, ATR helps revenue managers better understand the overall performance of spa operations within a hotel or resort property.
Benefits of Average Treatment Rate
Analyzing spa operations can be complex because of the variety of treatment packages offered. Calculating ATR gives revenue managers a reliable metric for analyzing overall spa performance without having to calculate the profitability of each individual treatment offered. ATR is a great indicator of spa performance and it helps revenue managers more effectively analyze and apply dynamic pricing to spa treatment services.
Limitations of Average Treatment Rate
ATR can be greatly impacted by a spa’s variety of treatment services. Average duration of services and various pricing packages also influence ATR. The adoption of fluctuating pricing in the spa industry, had made ATR a more accurate and meaningful metric for revenue management.
How is Average Treatment Rate Calculated
ATR is calculated by dividing total treatment revenue for spa operations by the total number of treatments sold.
Example of Average Treatment Rate Calculation
Total Treatment Revenue = $15,000
Total Number of Treatments Sold =$300
ATR = $15,000 (Total Treatment Revenue) / $300 (Total # of Treatments Sold) = $50