Hotel wellness offerings have seen healthy growth in 2023, according to the Wellness Real Estate Report 2024 by RLA Global, with support from HotStats. The report provides a quantification of hotel wellness and highlights the profitability of different services. Investor interest in wellness investments is growing as traveler expectations evolve. The report also looked at data from Truist Securities, focusing on the intersection of wellness and hotels. Equinox Hotels stands out as a brand investing in wellness with opportunities for growth.
The Wellness Real Estate Report 2024 focuses on key findings related to wellness in hotels, including gyms, spas, meditation, yoga classes, adventure activities, and healthful food offerings. Hotels with minor wellness plays, generating less than $1 million or 10% of revenue from wellness, saw a significant increase in average total revenue per available room (TRevPAR). Upper upscale hotels had the best performance in wellness compared to luxury and upscale segments. The report suggests that investors may benefit more from having an upper upscale property with some wellness amenities rather than a high-end property.
Food and beverage trends in hotels reveal a slight uptick in revenues driven mainly by restaurant spend, while beverage sales and room service revenue declined. The rise of healthier habits and food delivery apps may be influencing these trends. Truist’s report on hotel spa performance indicated an increase in spa treatment revenue per occupied room. However, total revenue growth for hotel spas may not keep pace with inflationary product costs. Emerging wellness trends in the U.S. include IV therapy, cryotherapy, and medical-themed services.
David Gutstadt and Amanda Potter, experts in wellness brands like Equinox and Fitler Club, shared insights on opportunities for hotels in the wellness sector. They emphasized the importance of integrating health, wellness, private clubs, and workspaces into a unified concept to create a unique experience for guests. They highlighted the lack of character in many wellness concepts and the value of incorporating elements that make the experience stand out.
Gutstadt and Potter are set to unveil a new wellness concept, Ballers, a social sports club in Philadelphia’s historic Turbine Hall. The club will offer various sports amenities like indoor padel courts, pickleball, squash courts, a multipurpose turf field, and an indoor golf center. Backed by celebrity athletes like Andre Agassi, Tyrese Maxey, and Kim Clijsters, Ballers aims to bring a hospitality-driven social sports club experience to urban locations. The company is planning to open 60 venues in the next five years.
Investor interest in the accommodations sector is also reflected in the stock performance of hotels and short-term rental companies within the ST200 index. The index comprises companies publicly traded across global markets, including hotel brands, hotel REITs, management companies, alternative accommodations, and timeshares. As the travel industry continues to evolve, the importance of wellness offerings in hotels and accommodations becomes increasingly significant, driving growth and investment opportunities. Hotels that can effectively integrate wellness amenities and provide unique experiences for guests are likely to stand out in a competitive market.
