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Wellness drives record TRevPAR results thanks to pandemic, reports RLA Global
By Megan Whitby 13 Jun 2022
The 2022 Wellness Real Estate Report examines the financial performance of more than 3,200 properties from around the world Credit: Shutterstock/Silatip
Hotels with wellness revenues exceeding US$1m generated 126 per cent more in total revenue per available room (TRevPAR) in 2021 than those with wellness revenues of less than US$1m, according to the latest Wellness Real Estate Report by RLA Global*.

Average TRevPAR at properties with significant wellness offerings was still 35 per cent below pre-Covid levels in 2019, but this gap was much higher at 44 per cent and 55 per cent, respectively, at hotels with minor and no wellness offerings.

Roger Allen, group CEO of RLA Global, said: "2021 was about recovery and hotel performances show a clearly positive trend in 2021 compared to 2020.

“When looking solely from a revenue perspective, hotels with significant wellness offerings seem to have achieved better results than properties with minor or no wellness facilities.

“The pandemic resulted in new revenue management strategies, giving priorities to average daily rates (ADR) over occupancy.”

A balanced perspective
Although properties with major wellness seem to be making bigger progress in recovery – at least in revenue generation – gross operating profit (GOP) levels counterbalance this process.

In fact, findings in the latest Wellness Real Estate Report indicate properties with minor wellness operations outperformed major wellness hotels in average monthly occupancy levels throughout 2021.

Plus, hotels without wellness had a six per cent wider GOP margin on average.

RLA Global warns that while the analysis of the post-Covid revenue trends seems to show that major wellness properties have a strong competitive advantage, it’s important to put that success into context and understand the costs attached to such a recovery in terms of operating costs, payroll and investment.

Michael Grove, chief operating officer of Hotstats, which participated in the report, said: "High levels of global inflation – combined with supply chain issues in hotel supplies and labour as well as energy cost increases – have replaced much of the savings hotels had found during the last two years.

“These areas largely impact the wellness sector more than most as generally, they carry a larger fixed cost base and labour force and higher levels of energy consumption. A key consideration for the coming years."

RLA Global said the differences revealed in bottom-line performances should provide investors with a cautionary note when considering the level of wellness-related investment in a hotel.

Allen said: "We believe there’ll be a few winners and potentially many losers as the competitive landscape heats up with both new wellness-related properties and as existing hotels try to reposition their offering to compete for the wellness audience".

Trends forecast
The latest Wellness Real Estate Report also highlights two trends which are expected to continue influencing wellness in real estate.

One of them is the sustained appeal of branded residences, which attract renewed customer interest as a result of growing global wealth and the post-Covid demand for real estate in less crowded, non-urban environments.

Riyan Itani, MRICS, director - head of consultancy, global residential development at Savills, said: "For most operators and buyers, wellness amenities will be key going forward. Indeed, most wellness amenities can be found in over 50 per cent of the branded developments we have studied.

“And for brands looking to bring new properties to market, they need to consider not only what the current needs are for residents but also what residents will be looking for in terms of amenity offering when the project opens."

The other trend identified is the increasing popularity of meaningful experiential holidays.
RLA Global feels that whether these getaways are intense adrenaline-fuelled experiences, immersive wellbeing offerings, specialised health improvements or specific experience-led pre-packaged holidays, there is no doubt that ‘experience’ should be at the forefront of hotel resorts and destinations.

The Wellness Real Estate Report
The third edition of RLA Global’s annual Wellness Real Estate Report examines the financial performance of more than 3,200 properties from around the world.

Data was supplied by P&L benchmarking company HotStats and has been analysed to understand the real financial impact of wellness on real estate assets.

Comparing data from 2019 all the way through to 2021, the report is designed to support industry stakeholders by evaluating the tangible impacts of wellbeing and wellness on the performance of real estate and identifying the key factors they should consider when planning these activities within real estate projects.

The publication is designed 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.

*About RLA Global
RLA Global (Resources for Leisure Assets Global) is an international consultancy specialising in leisure and wellbeing in real estate.


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Les Mills International
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News   Products   Magazine
NEWS
Wellness drives record TRevPAR results thanks to pandemic, reports RLA Global
POSTED 13 Jun 2022 . BY Megan Whitby
The 2022 Wellness Real Estate Report examines the financial performance of more than 3,200 properties from around the world Credit: Shutterstock/Silatip
We believe there’ll be a few winners and potentially many losers as the competitive landscape heats up
– Roger Allen
Hotels with wellness revenues exceeding US$1m generated 126 per cent more in total revenue per available room (TRevPAR) in 2021 than those with wellness revenues of less than US$1m, according to the latest Wellness Real Estate Report by RLA Global*.

Average TRevPAR at properties with significant wellness offerings was still 35 per cent below pre-Covid levels in 2019, but this gap was much higher at 44 per cent and 55 per cent, respectively, at hotels with minor and no wellness offerings.

Roger Allen, group CEO of RLA Global, said: "2021 was about recovery and hotel performances show a clearly positive trend in 2021 compared to 2020.

“When looking solely from a revenue perspective, hotels with significant wellness offerings seem to have achieved better results than properties with minor or no wellness facilities.

“The pandemic resulted in new revenue management strategies, giving priorities to average daily rates (ADR) over occupancy.”

A balanced perspective
Although properties with major wellness seem to be making bigger progress in recovery – at least in revenue generation – gross operating profit (GOP) levels counterbalance this process.

In fact, findings in the latest Wellness Real Estate Report indicate properties with minor wellness operations outperformed major wellness hotels in average monthly occupancy levels throughout 2021.

Plus, hotels without wellness had a six per cent wider GOP margin on average.

RLA Global warns that while the analysis of the post-Covid revenue trends seems to show that major wellness properties have a strong competitive advantage, it’s important to put that success into context and understand the costs attached to such a recovery in terms of operating costs, payroll and investment.

Michael Grove, chief operating officer of Hotstats, which participated in the report, said: "High levels of global inflation – combined with supply chain issues in hotel supplies and labour as well as energy cost increases – have replaced much of the savings hotels had found during the last two years.

“These areas largely impact the wellness sector more than most as generally, they carry a larger fixed cost base and labour force and higher levels of energy consumption. A key consideration for the coming years."

RLA Global said the differences revealed in bottom-line performances should provide investors with a cautionary note when considering the level of wellness-related investment in a hotel.

Allen said: "We believe there’ll be a few winners and potentially many losers as the competitive landscape heats up with both new wellness-related properties and as existing hotels try to reposition their offering to compete for the wellness audience".

Trends forecast
The latest Wellness Real Estate Report also highlights two trends which are expected to continue influencing wellness in real estate.

One of them is the sustained appeal of branded residences, which attract renewed customer interest as a result of growing global wealth and the post-Covid demand for real estate in less crowded, non-urban environments.

Riyan Itani, MRICS, director - head of consultancy, global residential development at Savills, said: "For most operators and buyers, wellness amenities will be key going forward. Indeed, most wellness amenities can be found in over 50 per cent of the branded developments we have studied.

“And for brands looking to bring new properties to market, they need to consider not only what the current needs are for residents but also what residents will be looking for in terms of amenity offering when the project opens."

The other trend identified is the increasing popularity of meaningful experiential holidays.
RLA Global feels that whether these getaways are intense adrenaline-fuelled experiences, immersive wellbeing offerings, specialised health improvements or specific experience-led pre-packaged holidays, there is no doubt that ‘experience’ should be at the forefront of hotel resorts and destinations.

The Wellness Real Estate Report
The third edition of RLA Global’s annual Wellness Real Estate Report examines the financial performance of more than 3,200 properties from around the world.

Data was supplied by P&L benchmarking company HotStats and has been analysed to understand the real financial impact of wellness on real estate assets.

Comparing data from 2019 all the way through to 2021, the report is designed to support industry stakeholders by evaluating the tangible impacts of wellbeing and wellness on the performance of real estate and identifying the key factors they should consider when planning these activities within real estate projects.

The publication is designed 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.

*About RLA Global
RLA Global (Resources for Leisure Assets Global) is an international consultancy specialising in leisure and wellbeing in real estate.
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The latest figures from RLA Global
Report: Leisure shift drives wellness real estate during the pandemic


Hotels with wellness revenues exceeding US$1m (€852,700, £731,700) generated nearly 75 per cent more in total revenue per available room (TRevPAR) in 2020, compared to locations with wellness revenues of less than US$1m.
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