The business of well-being: Financial benefits of integrating wellness modalities into hotels

The hospitality industry has long understood that tracking market trends and strategically monetizing them has been a key to financial success.

Wellness is a ubiquitous market trend and is experienced in virtually all aspects of modern life. According to the Global Wellness Institute, the global wellness economy is growing at a compound annual rate of 12% and is expected to reach 9 trillion dollars by 2028.

This tsunami of interest in wellness and well-being impacts how we eat, sleep, socialize, exercise, communicate, prioritize our emotional health, manage stress, celebrate milestones and relate to the world in general. Given that these behaviors are templated in the hospitality industry, it is not only reasonable, but mandatory that we embrace them and optimally monetize this interest.

Early destination wellness retreats of the 1960s were “fat farms” providing reduced calories in the context of luxury amenities. Swimming pools, robust fitness facilities and an attentive cohort of professionals were all necessary ingredients. Pampering spa treatments were also an essential component of the experience.

In the 1980s, fitness facilities were no longer the exclusively part of elite resort offerings, but rather workout facilities in hotels were found everywhere from urban business hotels to select-service properties. This trend mirrored the popularity of freestanding gyms and fitness facilities opening nationwide.

In the early 2000s, spas underwent a similar growth in popularity shifting from an exclusive “amenity” to a more common “business” offering.

Fitness and spa are the cornerstones in today’s lifestyle and wellness offerings. Lifestyle and wellness programs — and amenities — in the 2020s expand on the basics of fitness and spa, and are becoming increasingly popular. Programs supporting lifestyle are no longer reserved solely for high-end, full-service hotels.

We recently provided wellness and lifestyle consulting to a proposed rural 40-room truck stop hotel in the Midwest. The owner/developer wanted to incorporate a wellness center to meet the needs of road-weary truckers, price-sensitive family vacationers and the local population.

Unfortunately, the site did not have adequate space for a stand-alone wellness facility. However, we worked closely with their architects and designers to create wellness-oriented guestrooms, an aggressive HVAC system (in light of the 2020 COVID-19 outbreak) and a food-and-beverage program that offered a variety of plant-based options.

Traditionally an indoor pool provided a novel mid-winter swimming experience to travelers, or more aptly their children. Every competitive hotel in the market had an indoor swimming pool, so omitting one would be a disadvantage to our client.

We recommended configuring the indoor pool as part of a hydro-thermal circuit providing a steam room, sauna, hot tub and a deluge shower. This broadened the appeal beyond excited 12-year-olds to include long-haul truckers with sore lower backs.

Strategically selected treadmills, stationary bikes and weights made up the majority of the indoor fitness offerings. An outdoor parcours with stations spaced out for circuit-style workouts and hiking trail maps completed the cardio and strength recommendations.

While this property was clearly not a destination wellness resort, it had a unique configuration that enabled it to elevate the guest experience while increasing the RevPAR for the stake holders. Hotels that embrace wellness modalities not only elevate guest satisfaction but also unlock powerful financial returns.

Wellness-enhanced properties command higher average daily rates. Guests are willing to pay more for access to amenities such spa treatments and hydrotherapy circuits; in-room wellness tech such as circadian lighting to combat jet lag or air purification; and fitness and recovery services which can include yoga classes, cryotherapy and IV drips at selected medically oriented spas.

According to the Global Wellness Institute, wellness travelers spend 53% more per trip than the average traveler. This premium spend justifies capital investment in wellness infrastructure.

In urban hotels and selected resorts, wellness offerings help justify higher rates in highly competitive markets, especially for business travelers seeking balance and recovery from daily stresses. Wellness offerings have become a core part of the hotel’s appeal, allowing for bundled packages and longer-stay pricing strategies.

Wellness offerings attract both leisure and business travelers seeking restorative experiences. Hotels with integrated wellness programs often see higher midweek occupancy from corporate wellness retreats and extended stays from guests combining business with self-care.

Given the potential for significant lifestyle changes at some of these properties, repeat visits are often driven by emotional connection and lifestyle alignment. This deepens the engagement (and loyalty) of the guest. Many of these properties have immersive programs that require multiple days to detox or create mindfulness journeys, implying minimum stays of three days up to multiple weeks, depending on the program.

During shoulder and low seasons, “pop-up” wellness programs or workshops hosted by the hotel or third-party purveyors can increase occupancy and contribute to ancillary revenue growth at the property. Some of this revenue can be realized as wellness focused food and beverage, spa services, and retail sales such as skincare, supplements and branded apparel. Moreover, wellness workshops can be sold as an inclusive program, guaranteeing revenue in excess of the room rate.

Wellness is a powerful differentiator. Properties that align with guests’ values around health, sustainability and self-care foster deeper emotional loyalty. Which can lead to higher net promoter scores (NPS); increased direct bookings; and stronger word-of-mouth and social media amplification from influencers.

Wellness-forward positioning appeals to health-conscious business travelers, digital nomads and locals seeking a sanctuary in an urban environment. With select-service hotels, wellness touches — such as sleep-enhancing amenities, hydration stations and wellness-oriented branding — can elevate perceived value and build loyalty among budget-conscious travelers who prioritize well-being.

Wellness-forward hotels are increasingly favored for executive offsites and leadership retreats; incentive travel programs; and wellness-themed conferences and summits. Full-scale wellness retreats or wellness-infused meeting spaces and recovery lounges are attractive for corporate immersions and destination events that blend productivity with rejuvenation for high-performing teams.

Wellness is not just for guests, it benefits staff too. Hotels that offer wellness benefits to employees such as mindfulness breaks, ergonomic workspaces, healthy meals and aggressive benefit programs often see three basic trends: lower turnover and recruitment costs; higher productivity and morale; and stronger service culture, which enhances guest satisfaction.

Wellness programs for employees help combat burnout in fast-paced city environments, improving team resilience and service consistency.

Destination wellness resorts provide ever-evolving bespoke lifestyle programs, biophilic design and rewilding programs connecting guests to nature, or simply offering meditation rooms for relaxation. These offerings can be deconstructed into modular components and offered at two- and three-star hotels, which are not destination wellness centers.

Hotels that allow their guest to hit the reset button at check-in and emerge better versions of themselves upon check-out is still the wellness and lifestyle goal, which is not too dissimilar to the fat farm destinations of the 1960s.

Because today’s experience-driven traveler requires amenities and facilities that support their lifestyle needs, wellness is no longer a niche offering but rather it is a strategic imperative to remain competitive. Wellness is the new “luxury” and can provide a point of market differentiation for an independent one-star property or an international full-service destination.

Wellness is not a cost center — it is a revenue multiplier. Whether in the heart of a bustling city, nestled in a tranquil resort setting or operating with lean efficiency in a select-service motel, hotels that invest in wellness modalities position themselves for stronger financial performance, deeper guest loyalty and long-term brand relevance. This is how wellness investments translate into bottom-line growth.

Peter Anderson is managing director at HVS with a focus on wellness, lifestyle and spas. He is the founder and CEO of Anderson and Associates, a consultancy firm specializing in developing and programming issues related to senior lifestyle communities, wellness real estate as well as resorts and spas.

This column is part of ISHC Global Insights, a partnership between CoStar News and the International Society of Hospitality Consultants.

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