Wellness is no longer about a spa or a fitness center, but rather about the impact the experience at a property has on the guest’s wellbeing, during the stay and beyond. By Ingo Schweder, Managing Director of Horwath HTL Health & Wellness, Senior Consultant Fabian Modena and Consultant Krystyna Stadnyk
The rise of non-communicable diseases is fueling the growth of the wellness economy, prompting many companies to incorporate various elements of wellness into their product and service offerings in an attempt to capitalize on this ever-growing market.
Large hotel companies such as Marriott International, Hilton Worldwide, and Wyndham Hotel Group are launching new initiatives to integrate wellness into the guest experience – offering specially-furnished fitness guest rooms, a running concierge service, healthy menus packed with “superfoods”, organizing mind and body classes, cooking classes, seminars, and many others.
InterContinental Hotels Group and Hyatt Hotels & Resorts have taken the trend to the next level, and aspire to include wellness as part of their portfolio.
In 2012, InterContinental announced the launch of a new wellness-centric brand, EVEN Hotels, and opened its first property soon thereafter in early 2014 (the conversion of a 129-key Four Points by Sheraton in Connecticut).
Hyatt then followed, with plans to expand its portfolio with the acquisitions of Miraval Group (a leading wellness resort and spa company) in early 2017 and Exhale (a chain of wellness lifestyle centers) later that year.
As wellness is increasingly a feature of upscale hospitality developments, large fitness companies are also leaning towards a hospitality solution. Equinox, a chain of luxury fitness studios, is planning to launch its first luxury hotel in New York by 2019.
These developments, both recent and upcoming, indicate that wellness is no longer simply about a spa or a fitness center, but rather about the impact the experience at a property has on the guest’s wellbeing, both during the stay and beyond. Although hotels are increasingly incorporating wellness elements, an all-encompassing offering tends to be overlooked. Today, wellness and hospitality continue to merge, and as these two industries gradually become interweaved, there is a need to clarify key industry terms and set standards for the wellness hospitality industry.
A number of years ago, the International Spa Association (ISPA) defined a wellness resort (also referred to as a destination spa) as:
Over the years, along with the growth of the wellness industry itself, wellness-related terminology has evolved and been further refined.
In April 2018, the Wellness Tourism Association (WTA) created a glossary of industry terms, defining the following:
- A wellness resort, also referred to as a wellness sanctuary or wellness clinic in some parts of the world, is any facility with accommodations and a range of hospitality services where the primary purpose is to provide programs and experiences for the wellness traveler1 (note: not to be confused with a wellness visitor2 ). The wellness resort is comprised of four primary elements: (i) accommodation, (ii) a variety of wellness activities, (iii) healthy dining options, and (iv) wellness-related facilities.
- Often referred to as the “primary wellness traveler,” an individual who makes wellness the primary purpose of their travels.
- Often referred to as the “secondary wellness traveler,” an individual who works elements of wellness into their travels for business or pleasure.
- A wellness retreat is a guided, intention-driven, multi-day program with a set or semi-set schedules, and hosted by one or more facilitators. The program may include learning and lifestyle workshops such as meditation and healthy eating, as well as fitness activities such as yoga, nature walks, and hiking.
From these definitions, it is evident that many recent hospitality developments incorporate elements of wellness, yet do not qualify as true wellness resorts or wellness retreats.
To place the health and wellbeing of wellness travelers at center stage, today’s hospitality operators must think one step ahead. When developing a wellness-centric property, hospitality experts have to take into account the choice of materials, colors and textures, usage of biophilic design standards, incorporation of Nature into the overall architecture, and creating social spaces that inspire connectedness and engagement.
Most of the acclaimed global leader properties in wellness hospitality fall somewhere in between the definition of a traditional resort and a wellness resort, with only a handful of properties qualifying as true wellness resorts and targeted wellness programing retreats. While most of these operators incorporate elements of wellness, they do not adhere to the core principles of wellness travel, which is to pro-actively maintain or improve one’s personal health and wellness through result-driven, multi-day programs. Nor do these operators attract necessarily wellness travelers or comply with the latest architectural and construction standards.
There is, however, no ‘one size fits all’ when it comes to wellness resorts or retreat developments – some wellness resorts choose to specialize in a single treatment modality (targeted), while others offer a multifaceted approach (holistic). Wellness programing may also vary from general pampering packages to serious, result-driven health programs.
Based on our professional experience, we have identified five main types of wellness resorts, as illustrated in the following graph. Understanding the intention and vision of a future development is key, as it determines the required skillset for the project.
Wellness resorts, in general, may contain elements of the following property concept segmentation and may incorporate a focus on healthy eating or a minimum of mindful food and beverage choices, some form of exercise, and reduction in consumption of stimulants (e.g. caffeine, alcohol, or tobacco). The classification of a wellness resort is not mutually exclusive and may overlap in some cases.
- Resort A offers spiritual and mind-based development and is best exemplified by travelers wishing to engage in activities that enhance their spiritual wellbeing. This includes meditation programs that are guided by the teachings of dedicated owners or gurus.
- Resort B is a fully immersive health and wellness environment, offering a dedicated selection of wellness packages. The focus is on a variety of traditional healing modalities and self-improvement.
- Resort C incorporates the latest advances in traditional and alternative medicine (e.g. diagnostics). These types of resorts create the optimum level of objectively measurable results for the wellness traveler in a short period.
- Resort D offers spa-like treatments, healthy gourmet food and an abundance of outdoor sports activities. Wellness travelers have the chance to combine outdoor sports with luxury spa treatments and healthy food and beverage options.
- Resort E has similarities with Resort C and specializes in aesthetic treatments. The service offering includes luxurious beauty enhancements to the skin, teeth and body shape. Typically, the service platform does not go beyond minimally invasive treatments. Aesthetic retreats typically offer external quick fixes, but do not provide an all-encompassing wellness experience for body and mind.
When developing a wellness resort, it is essential that both the owner’s and the developer’s visions are aligned with the operator’s brand strategy and operating philosophy.
This includes a concept strategy that is operable and commercially viable. Within this process, a series of operating criteria must be developed to ensure that the proposed wellness resort development strategy makes commercial sense and appeals to the targeted audience.
In addition, the location may be of secondary importance. As guests typically travel to a wellness resort for a specific purpose, creating an oasis that is rooted in authenticity, programing and healthy dining options to service an entire stay. These are crucial elements associated with wellness resorts. Authenticity and a genuine guest experience take center stage while luxury is not necessarily the priority.
During early stages of development, it is essential to consider certain services and facilities that distinguish wellness retreats from traditional resorts, including tangible aspects (e.g. number of keys, spa size, guest-room-to-treatment-room ratio, number of dining outlets) and services (e.g. pre-arrival guest consultation, all-inclusive wellness packaging, schedule of visiting health and wellness professionals, and healthy food and beverage offering). To successfully realize a wellness resort development, the developer should employ or outsource to a multidisciplinary team of professionals with sufficient experience and know-how in hospitality, real estate, finance, design and architecture, sales and marketing, spa and wellness resort operation. For a wellness resort, the pre-opening and management planning process is slightly longer than for a traditional resort due to the complexity of service delivery, e.g. on-boarding of key employees. Thus, an experienced team of industry advisors with specialized expertise is recommended.
Online booking channels of traditional chain hotels are designed to prompt potential guests to select rooms and not experience, whereas, dedicated wellness resorts encourage guests to select packages to tailor-make experiences for each individual guest. Statistically, wellness resorts are less impacted by seasonal changes at a destination, maintaining stable occupancies throughout the year (for reference, wellness resorts in Thailand operate at an average annual occupancy of 80%). Wellness resorts are the most seasonality proof product in the hospitality industry, breaking the traditional resort model and recording a substantially longer average length of stay (5-7 nights), and higher repeat guest visit ratio (40-50%). Wellness resort room nights are typically charged per person even if two guests are sharing one room. Therefore, wellness resorts show on average 2.5x higher RevPAR compared to traditional resorts of a similar standing.
Approximately 18 months before the opening date of a wellness resort, the wellness resort’s team should start to market the new facility. The niche market of wellness resorts requires a strong and specialized marketing strategy. At dedicated wellness resorts, 39% of bookings are received through the brand website, whereas other forms of direct bookings make up an additional 35% of reservations, resulting in over 70% of direct bookings. This is because wellness travelers typically spend significantly longer researching different wellness programing options than traditional tourists. Furthermore, unlike traditional resorts, wellness resorts do not accept bookings through global distribution systems and online travel agencies, which are commonly replaced by specialized travel agents. Thus, it is important to deploy a four fold marketing strategy, including:
(i) marketing to increase market awareness and sustain competitive advantage;
(ii) attracting guests from existing competitors;
(iii) attracting new customers; and
(iv) maintaining existing customer base, driving repeat visitation.
Investors and developers entering the space where the health and wellness dollar merges with the hospitality dollar must understand and fully support the dynamics and concept of a true wellness resort. It is critical to understand the target market (wellness traveler vs. wellness visitor), understand the functionality of the essential facilities, accept a longer maturation period and higher initial investment, and be familiar with the specialized marketing strategy, and the pre-opening and management requirements of such product. In the pursuit of wellness globally, merely highlighting a few wellness features or amenities is ‘well-washing’ and does not provide a true wellness experience. Engaging a specialized wellness consulting and management company ensures efficient and appropriate design and help with cost management, along with helping avoid poor asset performance in the long run.