Key Features of Wellness Destination Resorts/Hotels
Unique Operating Model
Integrated destination spas typically bundle various components, such as guestroom, F&B, various assessments/consultations, treatments, and activities, through guided and carefully curated or individually customized multiple-day programs, rather than just selling rooms, to provide an immersive wellness experience for their guests. Guests can choose an all-included package based on their needs (e.g., detox, weight reduction, digital detox, stress relief, anti-aging, etc.) or a tailor-made program based on their assessment results and other special needs with a partially inclusive fee plus add-on products.
By selling multiple-day wellness packages per person rather than just hotel nights, this business model encourages individual guest occupancy; thus, double occupancy means nearly double the revenue, even if individuals share a room. This per-person model often excludes spa treatments and select wellness services, which are considered add-on goods that are frequently prompted by the allocation of guest spa credits.
Longer Average Stay Duration
The minimum program period for visitors to get transformational benefits is normally three nights at most destination spas; however, it can be extended up to three weeks (21 nights) depending on the aims and desired outcomes by altering the intensity of the program. According to HVS data, average lengths of stay at wellness establishments in the United States, India, Thailand, and Europe range from seven to ten nights.
Changing Guest Needs & Preferences
Destination spa occupancy levels differ from standard hotel spa occupancy levels due to fundamental variances in market-segment profiles. The majority of primary wellness tourists are between the ages of 35 and 70, have a greater level of education, and disposable income, and prefer more flexible travel itineraries. Guests seeking wellness experiences are likely to travel in search of ways to better their health/lifestyle or to gain a broader understanding of nature and well-being. Solo travelers, couples, and small groups like these types of travel experiences (e.g., family reunions, girlfriend getaways, retreat participants, etc.).
The basis of a destination spa’s business and the key lure for wellness travelers are its wellness programming and offerings. With wellness taking center stage and guests spending two to five hours per day participating in the assessment, consultation, or treatment sessions, as well as wellness-related activities at authentic destination spas, it is common to see around 30% to 40% of operating revenues coming from the spa and wellness center, which is significantly higher than traditional luxury hotels and resorts. This number can rise to 50% if most of the programs available are results-driven, highly specialized, and customized.
According to the 2019 HVS Annual Spa Department Performance Report, luxury hotel spas produce an average of 7.4% of overall income in the United States. As luxury hotels compete in an evolving upper-upscale, wellness-minded hotel market, program optimization is a recurring need across all developing property types, including destination wellness destinations as well as regular hotels and resorts. The table and graph below indicate spa performance and wellness services in US dollars for upper-upscale and luxury hotels. While premium hotels and destination resorts have a higher volume of comprehensive wellness offerings, these data uncover new opportunities to enhance wellness potential across all property types.
Increased Guest Retention and Direct Customers
Wellness is rarely a one-time treatment, but rather a long-term way of life.
This concept is also ingrained in the mission and philosophy of all destination spas, as well as in the minds of wellness enthusiasts. If guests find the programs useful and their stay delightful, they are more likely to return year after year, possibly multiple times per year.
It is advised that guests come once every two years to retain the optimal health and longevity benefits of some highly specialized and results-driven medicinal programs, such as the Revitalization program for cell regeneration designed by the medical spa Clinique La Prairie. Others, such as Canyon Ranch, provide personal health programs that analyze and track integrative health and biometrics, with the option of annual check-ins. These programs promote the annualized value and diverse health-minded guest retention.
Furthermore, many destination and wellness-focused spas have long-term ties with some of the world’s most well-known wellness specialists. These individuals may be invited on a regular basis as visiting practitioners or to lead multi-day courses or retreats. This collaboration not only works as a marketing tool to draw visitors to specific features, but it also appeals to guests who are fans of a variety of musicians, presenters, and professors.
As a result, it is not surprising that some of the most well-established and profitable destination spas have substantially greater repeat attendance rates, ranging from 45% to 60%, when compared to standard hotel and resort businesses.
Because of their devoted fan base, around 70% to 80% of bookings are made through direct channels, either on-site at the property during checkout or via official websites, emails, or phone calls. As a result, costs for travel agency booking commissions and marketing stay low because fewer marketing efforts are required.