In recent years, wellness tourism has emerged as a powerhouse in the global travel industry, with the market expected to reach a staggering USD 2.1 trillion by 2030. In response to the experiences during the pandemic that stressed the value of wellness, travel habits have now led towards seeking destinations that support physical and psychological health. Around the globe, renowned hotel brands now consider wellness as a key element in their offerings. Insights shared by Skift about the Wellness Real Estate Report 2023, released by RLA Global, claim that multiple brands, including Hilton and IHG, are expanding their services into the realm of wellness.
Within the next decade, the wellness tourism market is expected to grow by over 12% each year, with wellnesses predicted to be one of the major revenue sources for hotels.
As the industry experiences this change, this raises questions;
Is wellness paramount for driving profitability in hospitality businesses?
Can wellness generate hotel revenue the same as F&B services?
Is the shift in consumer preference compelling enough to shift investment patterns?
Would this take away the core focus of a hotel’s operation or add to it?
During the last few years, F&B services have been a main source of income (beyond rooms) for hotels, with some of the largest F&B operations approaching 50% of total revenues. Meanwhile, the Wellness Real Estate Report 2023 revealed that average TRevPAR increased by over 53% in 2022 at hotels with ‘minor wellness’ offerings and around 47% at ‘major wellness’ properties.
With wellness being a priority of modern travellers, the question is, can wellness generate revenue the same way as F&B services in hotels?
Finally, after rooms and F&B came first, it’s the time to put the focus on Revenue Management in Spas. And there is a lot to look into as, currently, most Spas within Hotels and resorts are deficitary.
There are good news on the horizon, though:
The growing demand for wellness means Spas are no longer just a luxury add-on. Increased demand means they are generating significant revenue for hotels (but remember, more revenue does not necessarily mean more profit).
The technology that is easily available nowadays also for Spas is making it accessible to every business to be able to track all data properly, and therefore be able to set revenue-related KPIs.
And that is the key: The lack of professionalization of the Spa management has lead to a poor data treatment, and a low adoption of revenue management.
So, next time you seat with your Spa manager, make sure he/she can answer questions such as the RevPATH ( Revenue per available treatment hour) If they can, you are on the right track towards a profitable outlet. If they look at you puzzled, then they/you need help. Fast.
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