Why investors are warming up to hot springs

The market for hot springs resorts is heating up in the United States. Hospitality and real estate companies are investing in new and upgraded facilities, as they vie for a larger segment of the growing pool of wellness tourists.  

The demand for thermal/mineral springs tourism worldwide will increase 14.3 percent a year through 2027, according to the 2023 Global Wellness Economy Monitor. The report notes that the U.S. has the sixth largest hot springs market in the world, one that expanded 24.1 percent between 2020 and 2022.  Yet, the sector is still underbuilt in the United States. And many of the hot springs facilities that do exist are past their prime or in dire need of updating. 

According to Vicky Nash, former executive director of the Hot Springs Association, about 28 states have springs in one form or another. More than a century ago, many forward-thinking operators started developing lodging around the sites, making them popular commercial ventures. But as the 20th century moved on, the hot springs crowd did as well. By the 1970s, hot springs resorts were out of style, and most of the facilities went out of business.  But now, many of these dowagers, after being shuttered or used for other purposes for years, are reopening as 21st century wellness centres thanks to multimillion dollar investments.

Those facelifts are happening throughout the country, from Virginia to Colorado to California. According to Jessica Meath, executive director of the Hot Springs Association, renovations of older facilities and new construction around hot springs sites are proceeding at an unprecedented pace. “As the general interest in the wellness sector has grown,” says Meath, “One of the big transitions is the interest in investment in large-scale renovations. Investors are looking at revamping the entire design of the resorts very consciously, and in doing that, are not just adding rooms and pools, but other wellness activities as well.”

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