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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.
Sign up here to get the Spa Business and Spa Business insider weekly ezines and every issue of Spa Business and Spa Business insider magazines free on digital.
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.
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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.
Sign up here to get the Spa Business and Spa Business insider weekly ezines and every issue of Spa Business and Spa Business insider magazines free on digital.
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
Hall of Wellness Awards 2020 shortlist revealed, with nominations for Marc Cohen, Helena Grzesk and Andrew Jacka
The shortlist for the Hall of Wellness Awards (HOW Awards) has been announced, with 110 awards up for grabs, split into six categories – Middle East, Asia, Europe and UK, Oceania, Americas and Africa – plus an additional seven global prizes.
ISPA and CIDESCO collaborate to foster growth and success for global spa workforce
ISPA and global beauty and spa therapy educational organisation, CIDESCO, are collaborating to tackle the training and staffing issues in the world of spa.
Grayshott Spa announces permanent closure
Grayshott Spa, an icon of the UK wellness industry, has succumbed to the pandemic, announcing it is to close permanently, 55 years after opening as a health retreat.
Armathwaite Hall gears up to offer wild swimming and cold water therapy package
The luxury Armathwaite Hall Hotel & Spa in the northern Lake District, UK, will launch a wild swimming package in December, designed to introduce guests to the benefits of cold water therapy.
2020 Global Sauna Forum will take deep dive into benefits of authentic Finnish sauna
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Chenot’s Dr George Gaitanos confirmed as keynote for Medical Wellness Congress 2021
Chenot Group scientific director and COO, Dr George Gaitanos, will keynote at The Medical Wellness Congress (MWC) hosted on 28-29 January 2021, at St. Martins Spa and Lodge, Austria. [more...]

30th annual ISPA Conference & Expo moves to May 2021
COVID-19 has led us and our industry to pause, breathe and reset. [more...]
COMPANY PROFILES
Premier Software Solutions Ltd

Premier Software was founded in 1994 and is a privately-owned UK-based company with Mark Johnson as [more...]
+ More profiles  
CATALOGUE GALLERY
+ More catalogues  

VIDEO GALLERY

BC Softwear - Positioning Video for Pure Spa Linen & SupremeSoft
BC Softwear are the leading supplier of spa linen, luxury robes and footwear for the Spa Market. See how our Pure Spa Linen range can enhance your 5* spa and treatment offering. Thanks to The Langley, a Luxury Collection Hotel. Find out more...
+ More videos  

DIRECTORY
+ More directory  
DIARY

 

24-25 Nov 2020

Spa Life International (UK)

Virtual Event,
01-03 Dec 2020

Self-Care and Personal Sustainability Summit

Kripalu Center for Yoga and Health, Massachusetts, United States
+ More diary  
 


ADVERTISE . CONTACT US

Leisure Media, Portmill House, Portmill Lane,
Hitchin, Hertfordshire SG5 1DJ Tel: +44 (0)1462 431385

©Cybertrek 2020

ABOUT LEISURE MEDIA
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