If spa hotels and wellness resorts can be more innovative and active,
they will gain more profit by meeting guests’ needs for health
In a time of uncertainty, economic downturn and public health crisis caused by Covid-19, and with people reassessing their priorities and paying more attention paid to health, the public’s interest to health-related experiences is greater than ever before.
The health industry is changing, and Covid-19 is accelerating that change. People increasingly desire to live in a healthy environment, and this creates a lot of opportunities for spa hotels and wellness resorts.
Mental health is an area that is expected to become more and more important. People who go to spas are equally concerned about their physical conditions and mental health.
Mr. Andrew Gibson, the former Global Director of the Wellness Department of Mandarin Oriental Hotel Group, said that guests who spend the most in luxury spa hotels always like to use health facilities. They usually spend twice as much on food and beverage, stay 1.5 days more than average, and are 33% more likely to book a suite.
The current trends show that luxury spa hotels and wellness resorts are experiencing a change in the age structure of their customers. Unlike the passive and conservative customers aged over 60, guests aged 45-60, the major group of today’s spa hotels and wellness resorts, are looking for interesting sports and experiences such as rock climbing, fishing, and diving in addition to traditional spas and health activities, etc. Those who travel with their children want to try more outdoor activities instead of sitting by the pool for tanning or reading books, which has already become passé.
A younger customer age structure is more obvious in China’s luxury spa hotels and wellness resorts than anywhere else. The Gen Z in China are more and more drawn by wellness resorts, and their desire for outdoor activities are in line with international standards and even beyond that. The 30-45-year-old upper middle class / wealthy group is the major consumption force of China’s spa hotels and wellness resorts. Family oriented health experience has become particularly popular in China.
However, hotels and wellness resorts around the world are facing challenges since they are unable to make clear plans for longer-term development in the current global situation. For most hotels and resorts, the pandemic year of 2020 will be a transitional year. A hotel’s chances of survival and future recovery depend largely on its location. Spa and fitness center’s current business performance is far from satisfying, partly due to social distancing policy, but mainly because of the lack of talent, especially spa therapists.
Therefore, the directors and managers of the hotels’ wellness departments must jump out of the fixed mode of thinking, adopt new management strategies, reduce manpower and increase the scope of self-service. For example, a few European city hotels have turned meeting spaces not used during the pandemic into health areas and provide wellness activities there while keeping social-distancing in mind. The wellness departments have also launched more little-contact services, such as light therapy, infrared therapy or sound therapy.
Hotels and resorts providing health services should seek to maximize the value of their existing assets, and aim at simple goals which can increase revenue and be implemented quickly at relatively low cost and effort. For example, they can consider turning fitness and spa centers into health or lifestyle centers.
Due to the pandemic, most hotels are not willing to hire more staff at present. But it is a good idea to sign part-time online service contracts with health experts. Potential partners include nutritionists, personal trainers and even medical spas. Nowadays, there is an increasing demand for medical aesthetics and injection therapy, not just Botox or collagen therapy, but also injections/infusions to supplement B12, to enhance physical and mental health, to recover from hangover and to boost immunity – all of which can be done at medical aesthetic institutions.
Technology plays an important role in in-room health services and often justifies additional room rates. Operators and investors need to understand how health-related services affect their hotel’s bottom line and how to integrate and measure it in the balance sheet. In traditional hotels, the quantification of health services is very complex, but the simplest way is to have a separate profit-and-loss sheet for spa or health departments, so that you can better understand where the revenue comes from and where the relevant expense lies.
Operators can also assess additional income from spa visitors by looking at their marketing data and visitors’ profiles. However, very few hotels are doing so at the moment.
In fact, health concepts and services are very likely to improve the profitability of hotels and resorts. Good wellness vacation products can become quite attractive selling points. Some guests even spend more than $1,000 a day in such a wellness resort. So there are still many investment opportunities in the field of wellness hotels in the future.
