Hotels see value in wellness investment

Wellness is far more than a fad these days. It is an ever-growing lifestyle, and one that the hospitality industry can leverage to boost profits.

The global wellness industry is a $3.7-trillion market, Susie Ellis, CEO of the Global Wellness Summit, said at a recent gathering of wellness professionals in New York City, making wellness more profitable than the pharmaceutical industry. (In other words, there is more value in keeping people healthy than in treating illnesses.) Wellness tourism is a substantial chunk of that market. Globally, travelers made 691 million wellness trips in 2015, 104.4 million more than in 2013. Between 2013 and 2015 alone, global wellness tourism revenues grew 14 percent from $494.1 billion to $563.2 billion. This growth rate was more than twice as fast as overall tourism expenditures during the same time period (6.9 percent).

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“Consumers, no matter what their income bracket is, are always willing to spend a bit more on their own health and wellness, no matter if that's a three-star experience or a five-star experience or even somewhere above and below that,” said Mia Kyricos, president and CEO of Kyricos & Associates, an advisor to hospitality and wellness brands. When she helped Starwood Hotels & Resorts Worldwide turn Westin into a wellness-focused brand, the project team found that guests were willing to spend a premium of about $20 a night for guestrooms with exercise equipment available.

Those were the early days, Kyricos said, and the study of wellness has become much more in-depth since then. “People are willing to pay a premium because they know that it's not just about the healthy food or gym anymore,” she said. “It's about air quality. It's about lighting. It's about hypoallergenic sheets. It's about the fact that there's a reusable water bottle in the room. Those are things that increasingly are more meaningful.”  

Hyatt picked up the wellness torch last year when it spent $215 million to acquire the Miraval wellness resort brand in January, and then purchased the Exhale spa and fitness company the following August. Through the new deal, Hyatt will offer Exhale locations and programming at its hotels, and will help the spa brand itself grow with more freestanding locations apart from the hotels. “According to a study commissioned by Hyatt, 72 percent of our target travelers see ‘being mindful’ as important to overall wellness,” said Marc Ellin, Miraval’s global head. The acquisitions, he added, reflect Hyatt’s growth strategy with a “unique focus on super-serving the high-end traveler.”

 

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“Those were traditional upper-upscale hotels up through some luxury offerings that were not inherently ‘well’ from the start and now are making great strides to do so,” Kyricos said. “Then you have hotels that are purpose-built [for wellness] like Even. You have hotel brands that are contemplating whether or not they're going to buy health and wellness brands to fold into their portfolio, or if they're going to continue to build their own offerings that are particularly suited for their particular hotel guests. I think you're going to see both.”

Spas

The global spa market grew from $94 billion in 2013 to $98.6 billion in 2015, according to new research provided by the Global Wellness Summit, and hotels are finding ways to expand their spa offerings to capture their share of that market. When it opens later this year, Six Senses Bhutan will include a multiproperty, “story-based” wellness circuit that takes guests to five distinct lodges where experiences (from food to design and spa) will be shaped a multichapter story.

Other destinations will also use narratives to encourage wellness in guests. At Iceland’s Red Mountain Resort concept spa-goers follow the intense, five-chapter emotional and sensory voyage of an ancient Icelandic hero.

Spa experiences are shifting from brief treatments in a single room to active, long, nature-roaming journeys (a circuit of hiking, meditation, treatments, etc.), like the all-day Spa Safari at Nihi, Sumba Island in Indonesia. “The 'transformative travel' concept will surely get used to death, but in wellness travel it’s the very brand and promise,” the report claimed. “The future for wellness travel will be engaging people’s emotions as much as evidence-based healing.”

Employee Wellness

Wellness can extend beyond the guest experience to the employee experience, with further benefits to the hotel. At the Breakers Palm Beach (Fla.), where the Global Wellness Summit was held in 2017, the hotel’s management team instituted a workplace wellness policy back in 2003. Employees at the hotel can take part in organized physical fitness activities and recreational offerings, including fitness classes and walking programs. They also have access to a full-time, on-site health and wellness advisor for confidential coaching, stress-management and mindfulness classes, personal training and an on-site green market.  

“Employee satisfaction and well-being is what drives customer satisfaction and retention, which drives our financial performance,” said Denise Bober, VP of human resources at the Breakers.  “We have data-driven health insights that we are monitoring constantly, and we have the appropriate programs and interventions that we've put in place over the past 15 years. And of course we measure the outcomes both from a qualitative and quantitative point.”  

In the Breakers’ last employee opinion survey, 95 percent of employees said that they took advantage of the property’s wellness offerings and 91 percent said that they felt the hotel cared about their well-being and the well-being of their families. More importantly to the company’s bottom line, the Breakers’ employee retention rate is now 82 percent, while the hotel industry’s average retention rate is 69 percent, Bober said.

Return on Wellness

Return on investment in terms of hotel wellness is increasingly tangible, Kyricos said, measured in both average daily rate as well as guest satisfaction rates. “These are goalposts that we can look to model,” she said. “We're not just going to be looking at ROI or potential ROI to justify investment in wellness-driven hospitality, but I think we're also going to see ROW—return on wellness or well-being.”

This metric, she said, would measure the quality of a guest’s sleep or their job performance after a stay. “They’re performing better at work because they stayed at a hotel that offered these things,” she said. “When we can start tracking that, those customers are going to become priceless to hotels.”