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Investors must thoroughly assess financial impacts of wellness investments, says new wellness real estate report
By Megan Whitby 07 Sep 2020
Data showed that resorts and hotels with major wellness operations generated 43 per cent higher TrevPAR in 2019, than their peers with no wellness offering
Wellness offerings can significantly boost hotel revenues and profits, but developers and investors must carefully assess their impacts on real estate to achieve targeted returns, according to a recent industry study.

Conducted by Resources for Leisure Assets, (RLA), The Wellness Real Estate Report uses market data from P&L benchmarking company, HotStats, on the financial performance of 3,200 international hotels of all classes, to provide insights on how wellbeing and wellness may contribute to the existing business or planned projects of investors and developers on the revenue and profit levels.

“There’s great growth potential from the sector, but investors face challenges in assessing the overall value of the wellness offering and a transparent internal rate of return," said Roger Allen, Group CEO at RLA.

Data showed that resorts and hotels with major wellness operations generated 43 per cent higher total revenues per available room (TrevPAR) in 2019, than their peers with no wellness offerings.

However, it also indicated that simply adding wellness or wellbeing features doesn't necessarily translate into higher TrevPAR, as hotels and resorts with minor wellness offerings recorded almost 6 per cent less TRevPAR compared to those with no wellness facilities at all.

Furthermore, the paper highlights that running large wellness operations doesn’t automatically lead to better bottom-line performance, as associated expenses may eat away at profits.

The data indicated that hotels with significant wellness offerings achieved lower operating profit conversion than those with minor or no wellness operations in 2019.

According to Allen, the main takeaways from the paper for potential investors and developers in wellness real estate are as follows:
  • Make sure to select the right business model for wellness facilities and services

  • Determine how much of the real estate should be dedicated to wellness

  • Don’t underestimate the importance of location

  • Ensure there is a wellbeing or wellness proposition that differentiates the property


The paper outlines that real estate markets were greatly affected by new customer expectations and socio-economic factors in recent years, including increasing health-consciousness, which led to more spa visits and higher spend at wellness facilities.

In particular, thermal and mineral springs grew in popularity due to rising demand for authentic and natural spa experiences, and wellbeing offerings became integrated throughout the property rather than focusing only on the spa area.

Widespread concerns relating to the pandemic also further strengthened customer focus on health, which translated into increased demand for wellbeing services.

To read the full report, click here.


News
1 to 12 of 7718 news stories
01 Mar 2021
Kempinski Hotels has completed the acquisition of Resense Spa SA as part of the expansion of its wellness and wellbeing strategy. Resense, which was originally founded as a joint venture between Kempinski and spa consultancy ... More
01 Mar 2021
The Asia Pacific Spa and Wellness Coalition (APSWC) has unveiled new details about its upcoming 2021 Round Table Conference, scheduled for 15-17 March. The annual event always produces a white paper that pinpoints the region’s ... More
28 Feb 2021
Six Senses Hotels Resorts Spas has expanded its portfolio with a new eco-wellness resort in Mantiqueira, Brazil, nestled amongst flourishing forests and situated at the meeting of three valleys. Six Senses Botanique was opened after ... More
25 Feb 2021
Baca Architects has submitted a scheme to transform an unused UK quarry lake and surrounding land into a unique eco-wellness resort centred on waterside living and water-based recreation. The 80-hectare Ashwicken Lake site is situated ... More
24 Feb 2021
The Hot Springs Connection has announced its third-annual conference is scheduled to take place in person at Quinn’s Hot Springs Resort in Paradise, Montana, on May 17-20 2021. Established in 2018, the convention is claimed ... More
24 Feb 2021
The iconic Beverly Hills Hotel Spa in Los Angeles has reopened its doors after seven months of extensive refurbishment and redesign. Christopher Cowdray, CEO of the Dorchester Collection – luxury operating company of the Beverly ... More
23 Feb 2021
US-based skincare company Heyday has announced a US$20m (£14.2m €16.5m) Series B round of funding led by Level 5 Capital Partners (L5), with participation from existing investors Lerer Hippeau and Fifth Wall Ventures. Heyday has ... More
22 Feb 2021
UK Prime Minister Boris Johnson has announced non-essential retail, including spas, salons, close-contact services and gyms, could reopen by 12 April 2021, at the very earliest. Johnson revealed the news today as part of step ... More
22 Feb 2021
A collection of industry organisations, including The British Beauty Council, are working closely with the UK Government to present proposals for a package of industry-saving measures. These include a VAT cut for reopened salon and ... More
22 Feb 2021
Luxury Hawaiian wellness enclave, Sensei Lāna‘i, A Four Seasons Resort has launched an Optimal Wellbeing Programme in partnership with WHOOP, the human performance and wearable tech company. Located at the island resort on Lāna‘i, the ... More
18 Feb 2021
Aman is planning to debut its sister hotel brand Janu in the heart of Tokyo in an urban redevelopment project, called Toranomon-Azabudai development. Janu was unveiled in 2020 with a fresh philosophy based on social ... More
19 Feb 2021
As evidence grows around nature’s wellbeing and health benefits, the team behind the UK’s Lost Gardens of Heligan has created an initiative to demonstrate how its guests can harness nature to boost wellbeing. Heligan has ... More
     
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NEWS
Investors must thoroughly assess financial impacts of wellness investments, says new wellness real estate report
POSTED 07 Sep 2020 . BY Megan Whitby
Data showed that resorts and hotels with major wellness operations generated 43 per cent higher TrevPAR in 2019, than their peers with no wellness offering Credit: Shutterstock: Pixel-Shot
There’s great growth potential from the sector, but investors face challenges in assessing the overall value of the wellness offering and a transparent internal rate of return
– Roger Allen
Wellness offerings can significantly boost hotel revenues and profits, but developers and investors must carefully assess their impacts on real estate to achieve targeted returns, according to a recent industry study.

Conducted by Resources for Leisure Assets, (RLA), The Wellness Real Estate Report uses market data from P&L benchmarking company, HotStats, on the financial performance of 3,200 international hotels of all classes, to provide insights on how wellbeing and wellness may contribute to the existing business or planned projects of investors and developers on the revenue and profit levels.

“There’s great growth potential from the sector, but investors face challenges in assessing the overall value of the wellness offering and a transparent internal rate of return," said Roger Allen, Group CEO at RLA.

Data showed that resorts and hotels with major wellness operations generated 43 per cent higher total revenues per available room (TrevPAR) in 2019, than their peers with no wellness offerings.

However, it also indicated that simply adding wellness or wellbeing features doesn't necessarily translate into higher TrevPAR, as hotels and resorts with minor wellness offerings recorded almost 6 per cent less TRevPAR compared to those with no wellness facilities at all.

Furthermore, the paper highlights that running large wellness operations doesn’t automatically lead to better bottom-line performance, as associated expenses may eat away at profits.

The data indicated that hotels with significant wellness offerings achieved lower operating profit conversion than those with minor or no wellness operations in 2019.

According to Allen, the main takeaways from the paper for potential investors and developers in wellness real estate are as follows:
  • Make sure to select the right business model for wellness facilities and services

  • Determine how much of the real estate should be dedicated to wellness

  • Don’t underestimate the importance of location

  • Ensure there is a wellbeing or wellness proposition that differentiates the property


The paper outlines that real estate markets were greatly affected by new customer expectations and socio-economic factors in recent years, including increasing health-consciousness, which led to more spa visits and higher spend at wellness facilities.

In particular, thermal and mineral springs grew in popularity due to rising demand for authentic and natural spa experiences, and wellbeing offerings became integrated throughout the property rather than focusing only on the spa area.

Widespread concerns relating to the pandemic also further strengthened customer focus on health, which translated into increased demand for wellbeing services.

To read the full report, click here.
RELATED STORIES
Historic hot spring hotel in Portugal to be restored into riverside wellness retreat


Resources for Leisure Assets (RLA), an international consultancy specialising in leisure and wellbeing in real estate, has revealed plans for a luxury wellness retreat and thermal destination on the edge of the River Tâmega, Portugal.
MORE NEWS
Kempinski buys Resense Spa as shareholders exit
Kempinski Hotels has completed the acquisition of Resense Spa SA as part of the expansion of its wellness and wellbeing strategy.
Asia Pacific Spa and Wellness Coalition gears up for first virtual Round Table in March 2021
The Asia Pacific Spa and Wellness Coalition (APSWC) has unveiled new details about its upcoming 2021 Round Table Conference, scheduled for 15-17 March.
Six Senses transforms Brazilian resort previously backed by co-founders of The Body Shop and AOL
Six Senses Hotels Resorts Spas has expanded its portfolio with a new eco-wellness resort in Mantiqueira, Brazil, nestled amongst flourishing forests and situated at the meeting of three valleys.
Baca Architects submits scheme for floating eco-wellness sanctuary and spa
Baca Architects has submitted a scheme to transform an unused UK quarry lake and surrounding land into a unique eco-wellness resort centred on waterside living and water- based recreation.
Montana hot springs resort unveils new bathing area in time to host global hot springs convention
The Hot Springs Connection conference is scheduled to take place in person at Quinn’s Hot Springs Resort in Paradise, Montana, on May 17-20 2021.
Beverly Hills Hotel unveils newly renovated spa with design details by Champalimaud Design
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