Inns and B&B's everywhere are usually faced with some limitation on the number of rooms they are allowed. This can have a negative impact on cash flow, but there are creative ways you might be able to create another "room" without violating your local ordinances: create a spa!

Lots of you are offering massage as part of a package. But there's a lesson to be learned from some successful innkeepers that is supported by research from PKF Consulting. Let's look at a real life example.

Once upon a time in a lovely seaside community there was a beautiful inn, a grande dame if ever there was. She radiated warmth, charm, and sophistication. She welcomed guests from around the world year after year and rewarded those returning guests with an ever increasing level of service and guest experience. Rooms were constantly updated; trends were always being catered to. No stodgy innkeepers here, these owners wanted to grow their business.

Over time they increased the number of rooms in the inn until they hit the town's limit, but still they wanted more (kids in college will do that to you). They had a small conference room which doubled as a TV room, as they didn't have TV's in the guest rooms. Alas, times had changed. Guests didn't want to sit in a common room to watch TV anymore, so the innkeepers reluctantly acknowledged that their guests WANTED TV's in the rooms, and now that they could add flat screens, the TV's didn't interfere with the decor. And business meetings had dwindled to the point where the conference table wasn't serving any useful purpose. So, what to do?

The robust gift shop they had developed over the years was now proving to be very profitable. Spas had become popular, too, and with that meeting room going to waste they decided to make it work for them AND their guests. They divided the room in half, converting one part to a small spa room with a bathroom, an independent HVAC system, sound proofing, sound system, fancy lighting controls, and ample room for two massage tables. A true pleasure cocoon!

Working with independent massage therapists, they have now effectively created another guest room, as this spa room generates the income equivalent to one of their lodging rooms without violating any ordinance. And, its very existence helps sell more rooms, because they now have a dedicated spa onsite. They are generating about 5% of total revenues from the spa, most of which is from the rental of the space to the massage therapists, not the pass-through fees to the therapists themselves.

PKF Consulting says that spas generated 3.9% of total revenue (in large hotels with dedicated spas) in 2007. Of that revenue, the largest piece, 55.6%, was massage, with all the other services like skin care, salon, and retail sales making up the balance. It may be risky to try too much on a small scale, but massage is clearly a hit. A really "tricked out" spa room may be a better alternative to in-room massage if you have the space. And if you need another guest room but aren't allowed, this may be the answer.

Have you created a spa in an interesting way? How is it working for you? Please tell us about it.

Peter