RLA Global’s Wellness Real Estate Report 2023 Finds Robust Revenue Growth at Hotels With Wellness Offerings Worldwide — Photo by RLA Global
  • Revenues at wellness hotels rose sharply in 2022 as demand rebounded despite economic and geopolitical difficulties, data from the Wellness Real Estate Report 2023 show.
  • Hotels with major wellness offerings outperformed those properties with minor wellness offerings in revenue and occupancy, but they recorded lower GOP-to-revenue ratios.
  • The Wellness Real Estate Report 2023, published by RLA Global in partnership with HotStats, is a valuable tool to assess the impacts of wellness offerings on hotel performance.

Hotels with wellness offerings had strong TRevPAR growth in 2022 as markets benefited from a recovery in demand, hospitality advisor RLA Global said in its Wellness Real Estate Report 2023, released during this year’s International Hospitality Investment Forum (IHIF) in Berlin.

Average TRevPAR rose by over 53% on the year in 2022 at hotels with ‘minor wellness’ offerings – that is, those generating less than $1mn or 10% of total revenue from wellness and leisure. TRevPAR climbed by nearly 47%, at ‘major wellness’ properties, where wellness and leisure account for over $1mn or 10% of total revenue. The Americas took the lead in global TRevPAR performance.

Guest spending in 2022 was the highest at hotels with major wellness, which outperformed minor wellness properties in absolute TRevPAR and occupancy. But major wellness hotels often face higher costs, which explains why properties with minor wellness had a 5 percentage point higher GOP-to-revenue ratio, and an 8 percentage point stronger total operating performance last year.

Although the category of major wellness hotels takes all the plaudits for property-level top-line performance, it does come with higher operating costs, which results in lower GOP-to-revenue ratio and operating profit performance to total revenue. This is precisely where the minor wellness category indicates potentially better cash returns, [and this is also why] investors need to give a serious consideration to the overall wellness concept of the development at the planning stage. Roger A. Allen, Group CEO of RLA Global
Key hotel expense lines saw growth above and beyond inflation in most regions, making it vitally important that hoteliers were able to drive top line performance to offset. Energy costs, operational labour costs and guest supplies in particular challenged hoteliers to focus on efficiency and whilst this meant resorts and wellness offering became a lot more challenging to manage, experiential demand drove guest spend, resulting in what was an excellent year from a profitability point of view. Michael Grove, CEO of HotStats

Hotels with wellness offerings were in general supported by the overall recovery of the global hotel market in 2022, despite increased inflation, difficulties caused by the war in Ukraine and the disastrous effects of the Covid-19 pandemic. Although hospitality was still in recovery mode, the wellness industry was going from strength to strength, which may support a fairly positive market outlook.

As a global operator of spas, it is enlightening to see the rebound growth post Covid of wellness. The Americas’ strong TRevPAR performance is also good for the global economy as the wellness criteria is influential on travel and ultimately customer destination preferences, so could be one factor for the accelerated growth in the Americas. Indications are that wellness will continue to dominate industry growth trends for the foreseeable future. Michael J Newcombe, Vice President Wellness, Four Seasons Hotels and Resorts

The Wellness Real Estate Report 2023 also discusses how the standout trends of branded residences, technology innovations, and community-based wellness as well as adventure activities will continue impacting wellness real estate and provide development and operational teams with experiences that can broaden the service offering, strengthen guest engagement and improve hotel performance.

The Wellness Real Estate Report 2023, now in its fourth year of publication, evaluates average hotel performance based on data from P&L benchmarking firm HotStats, covering about 2,600 major, minor and no-wellness hotels of all classes worldwide. Processing property-level KPI results, such as ADR, occupancy rates, TRevPAR, GOPPAR and GOP, the report presents how wellness contributes to hotel revenue flows and operating costs, and what effects it has on margins and overall profits.


About HotStats

HotStats provide monthly P&L benchmarking for the hotel industry, collecting detailed financial data from over 6,000 hotels in total worldwide from over 100 brands and independent hotels, and provides over 550 different KPIs covering all operating revenues, payroll, expenses, cost of sales and ultimately departmental and total hotel profitability. www.hotstats.com

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

Annamaria Karcz
Marketing, media, PR
RLA Global