Revenue Per Available Treatment Hour (RevPATH) is used to measure profitability of spa operations in a hotel or resort property. It measures revenue generated by treatments and accounts for the number of rooms available during normal hours of operation. It is a very useful metric used in yield management for spa managers.

What is Revenue Per Available Treatment Hour (RevPATH) For?

RevPATH works similar to how RevPAR measures the efficiency of hotel room bookings. RevPATH can be used to identify the times of the day (or days of the week) where a spa is bringing in the most revenue. This allows spa managers to design premium products for upsells during high demand periods. It also helps with identifying periods of low demand where a spa can use promotions to drive additional revenue.

Benefits of Revenue Per Available Treatment Hour (RevPATH)

RevPATH is a useful KPI for measuring spa operations because it accounts for spa turnover. Instead of simply looking at total spa revenue, RevPATH helps spa managers identify hours that achieve a higher yield. This helps spas manage their time more effectively and identify opportunities to drive increased revenue.

Limitations of Revenue Per Available Treatment Hour (RevPATH)

One limitation of RevPATH is that different spas will often calculate RevPATH depending on their specific revenue goals. While RevPATH is a very useful internal metric for improving time management in spa operations, it may not be a good KPI for comparing spa operations across different hotels or resorts.

How is Revenue Per Available Treatment Hour (RevPATH) Calculated

RevPATH is calculated by multiplying a spa’s occupancy rate by its average treatment rate. Average treatment rate is calculated by dividing Total Treatment Revenue by the number of Total Treatments sold. Because occupancy rate is usually expressed as a percentage, it can be easier to convert to a decimal and then multiply it by average treatment rate to achieve RevPATH.

Example of Revenue Per Available Treatment Hour (RevPATH) Calculation

RevPATH = Spa Occupancy x Average Treatment Rate

Spa Occupancy = 70%
Average Treatment Rate (ATR) = $240

RevPATH = 70% (Occupancy Rate) x $240 (ATR) = $168