• Wellness hotels showed a positive growth trend globally in 2023, although performances were uneven across different wellness categories and hotel asset classes.
  • The Wellness Real Estate Report 2024 has a new addition to compare the performances of Luxury, Upper Upscale and Upscale hotels with Major, Minor and No Wellness offerings.
  • Luxury hotels with Major Wellness offerings led in terms of Total Revenue Per Available Room, achieving a TRevPAR three times that of Upper Upscale hotels in 2023.
  • But Upper Upscale properties were the best performers in terms of ADR and TRevPAR growth in all three categories of wellness, outperforming both Luxury and Upscale hotels.
  • F&B revenues were affected by beverage and room service sales falling at Major Wellness and Minor Wellness hotels, indicating changing customer habits.

– Hotels with wellness offerings posted healthy TRevPAR growth in 2023, with Minor Wellness properties – those generating less than $1mn or 10% of total revenue from wellness and leisure – standing out with a 26% average increase in average TRevPAR from 2022, hospitality advisor RLA Global said in its latest Wellness Real Estate Report, published in partnership with P&L benchmarking firm HotStats for the fifth consecutive year in 2024.

“There was a positive growth trend at hotels with wellness offerings in conjunction with all main year-on-year KPIs, including ADR, RevPAR, TRevPAR and occupancy. Minor Wellness properties demonstrated great flexibility in optimizing operating expenses, contributing to their bottom line. But performances also indicated a fragmented hotel wellness market that investors should pay close attention to,” Roger A. Allen, Group CEO of RLA Global, said.

“Wellness is certainly a guest expectation across the board and guests are willing to spend more money where they can, in areas, such as wellness. […] Investors need to be able to get the right approach for the right market with the right asset,” Michael Grove, CEO of HotStats, said.

Comparing results in the Luxury, Upper Upscale and Upscale hotel classes in the Wellness Real Estate Report 2024 for the first time delivered interesting findings. Luxury properties with Major Wellness offerings generated three times more TRevPAR compared to Upper Upscale hotels but were behind Upper Upscale in year-on-year TRevPAR growth and saw a 4% decline in ADR. Upper Upscale properties delivered the best performance in terms of ADR and TRevPAR growth in the Major, Minor and No Wellness category.

“People build and own hotels for very different reasons. […] If it’s to generate a return, the report clearly highlights that most [investors] would be better off having an upper upscale property with some wellness amenities rather than going completely to the high-end of the spectrum,” Rachael Rothman, Head of Hotels Research and Data Analytics at CBRE said.

"The emphasis in luxury is about protecting the experience first and foremost and sometimes that means sacrificing other things that might be more profitable. That would interfere with being able to deliver to your guests that very high-end, very exclusive and very personalized experience,” Jeremy McCarthy, Group Director of Spa & Wellness at Mandarin Oriental, said.

The Wellness Real Estate Report 2024 also assesses revenue generation and profitability in various departmental operations, which also reveals notable trends at wellness hotels. Average F&B Revenue Per Occupied Room, for example, rose slightly in all three categories last year, mostly driven by restaurant spend. But beverage sales were down at Major and Minor Wellness hotels, which also saw their room service revenue fall by 13% and 12% in 2023, respectively.

“The declining bar and room service revenues in city center hotels reflects the latest trends of guests becoming more health-conscious and drinking less alcohol, while food delivery apps are providing guests with more compelling and cheaper options than the hotel offering,” Alex Santamaria, Founder of Aware Hospitality, said.

The Wellness Real Estate Report 2024 discusses key industry trends that we believe are here to stay. These include customers increasingly fitting longevity needs into their lifestyle, the rising influence of wellness on branded residences and artificial intelligence becoming a transformative tool.

The annual Wellness Real Estate Report and its mid-year updates evaluate average hotel performance based on HotStats data covering over 11,000 Major, Minor and No Wellness hotels of different classes worldwide. Processing property-level KPI results, such as ADR, occupancy rates, TRevPAR, GOPPAR and GOP, the report and its updates present how wellness contributes to hotel revenue flows and operating costs, and what effects it has on margins and overall profits.

DOWNLOAD THE FULL 2024 REPORT

About RLA Global

RLA Global is a leading boutique advisory firm, specializing in resorts and destinations, mixed-use developments, and complex hospitality and tourism assets. We engage projects from a highly strategic perspective right down to the finest details, encompassing the entire life-cycle of leisure and hospitality assets. The firm has a proven track record of 100+ high-profile projects, across four continents. RLA Global is recognized by the European Travel Award as one of the Best International Leisure and Hospitality Advisors. www.rlaglobal.com