Preparing for Increasing Wellness Demand Amid Layers of Global Turmoil
By Mia Mackman, Managing Director HVS and Principal Spa and Wellness Consulting
The massive convergence of social, financial, and personal changes we have experienced in recent months can be overwhelming. This article provides a breakdown of underlying dynamics I expect will impact the future of hospitality, hotels, resorts and mixed-use spa and wellness facility demands in the months and years ahead.
Pre-Coronavirus and Central Values
The hospitality market has been rapidly advancing in both demand and growth since 2008. This is in part due to the rise of Airbnb and an increasing volume of new hotels and resorts worldwide. In recent years, there has been a heightened quest to attend social events, and business conferences. In addition, leisure travel has become increasingly dynamic and steadily on the rise. Prior to the novel Coronavirus this year, social media streams surged with posts depicting lifestyle, wellness, recreation and travel-gram hashtags. The allure of travel and wellness became highly popular and sought-after experiences. Travel businesses thrived, and meeting spaces were in high demand.
Confronted with sudden restrictions and a global lockdown, face-to-face meetings, and trade shows quickly shifted onto digital platforms into webinars, teleconferencing, and video calls. While the core values of these interactions remain strong attractors and bedrocks of establishing new business, new modes of communication have become the lifeline of doing business amid the Coronavirus. Whereas relationship building and new experiences set the foundation for immeasurable things, this discourse of doing business atop economic turbulence has sent shockwaves through the hospitality sector.
Global Turmoil and Shared Loss
Amid this chaos, loss of routine and feel of normality, has come a widespread and deeply felt sense of loss. The world continues to face challenges related to COVID-19, social unrest, protesting and polarization. We are living in a time of many great unknowns. It's easy to get lost in trying to sort news updates, political chatter, and social media. However, this shared sense of instability and uncertainty are a part of a larger cycle of collective grief and momentous change. To present a different perspective on this, I chose to relate these turbulent times to cycles of grief and need, in relationship to imminent innovation, healing and growth.
Five Stages of Grief
The well-known Kübler-Ross model lays out 'five stages of grief'. This exemplifies a cycle of grief and bereavement that includes 1. Shock and Denial, 2. Anger and Frustration, 3. Bargaining, 4. Depression and 5. Acceptance. The integration of difference happens in stages based on global circumstances, regional nuances and individual experiences. These are broadly experienced in different ways, by different people. There are multiple scenarios and extended applications in context to this model of emotions. For the sake of simplicity, this is a sweeping view of how I feel this relates to a profound increase in hospitality wellness demand.
Based on the Kübler-Ross model, much of the world remains in the midst of shock, denial, anger and frustration. These are the first stages on the change curve of the grief cycle. These emotions are evident across global economies, vertical markets and multiple business sectors. While some hotels and resorts are beginning to reorganize and reopen, others are undergoing catholic financial hardships and logistical challenges. Some have adapted well, and others are facing flat EBITA percentages and in need of urgent repositioning or acquisition.
Kübler-Ross Grief Cycle
Later stages on the change curve include bargaining and depression, which then moves toward a final stage of acceptance. The segment in the cycle between bargaining and acceptance is where the opportunity for healing, well-being and lifestyle propositions can expect to play a substantial part in supporting the process of personal wellness and health. Public interest in spa and well-being have been thriving counterparts to self-care initiatives with increasing personal health awareness. These inherently impact our physical, emotional and spiritual lifestyle practices.
The processes of acceptance and healing will be long-lasting. These later stages are likely to last many years, thereby accelerating a need for multifaceted, accessible wellness models as new mainstays across society. Whereas, hotels and resorts touch an extraordinary number of people, the opportunity to impart an atmosphere of depth and healing is highly potent and significant.
Personal Fortitude and Inner Reflection
As people continue to experience unexpected shifts; the search for wholeness and nourishment are also shifting. Notwithstanding the macro-level of change we are seeing in the world; these trials are deeply personal. The lockdown has had tremendous consequences. These rapid changes have evoked varying levels of loss, disbelief and isolation. This process is tender and requires health-giving spaces to support this transitional stress. This has also facilitated unplanned, inner reflection and revealed significant sentiments simultaneously to personal health, relationships and mortality.
Rebound and Recovery
Since the conditions of these challenges differ around the world, market recovery will vary relevant to diverse circumstances and locations. Assorted restrictions to international travel are likely to be in effect for the remainder of 2020 into 2021. Choice travel restrictions may also reveal a variety of new travel complexities imparting arduous rebounds to Pre-Coronavirus rates of global tourism.
In combination with limited business travel and consumer hesitation, changing leisure preferences will likely divert energy from air travel and events to road trips and recreation. In void of global tourism volume, regional and local market resilience in the near-term can be essential support systems. A strong regional market base can effectively back and activate the reopening of various properties. While food and beverage and spa and wellness programs can support RevPAR performance and fiscal recovery.
The Figure 2 shows the Years to Recovery in occupancy, average rate, RevPAR and demand in 2001, 2009 and the current forecast of 2020. It's clear the crisis we are facing now is dramatically more difficult than previous events. Yet, the forecast for recovery albeit longer, is fair-minded. Figure 3 shows historical data, with recovery projections and change rates related to occupancy, average rate, RevPAR, and demand through 2024.
Healthy Momentum and Growth
It's reasonable to expect the change curve mentioned in the five stages of grief will motivate a larger segment of the population to seek various forms of relaxation and life-support. Given will and wherewithal, hotels can supplement value to enrich program types to help strengthen projected rates of recovery. Increasing demand for personal care and spa and wellness services will be a natural part of this. Historically spas were predominantly viewed as hotel amenities. As this perception evolved, spas became full-service departments and successful stand-alone facilities. With escalating movement this further advanced spa and wellness services to become central components of integrated lifestyle and membership facilities.
Timing, Investment and Preparing for Demand Growth
A broadening audience in search of well-being will spur new and distinct demand. New spa and wellness businesses and new industry models will be required to reposition services and meet these changing needs. Creating new business models requires a delicate balance of understanding of the pace of the market with the ecosystems in which they will live.
If you have an existing spa and wellness facility and are contemplating renovations or program expansions, there are multiple ways to enhance programs and services at various levels of investment and size. Multiple factors apply in deciding how to elevate these experiences. Leading considerations include location, property type, available space for renovations and the overarching goals of the business. Other factors include seasonality, employee readiness, and asset management. Activating new programs with low investment output can help motivate engagement and improve rebounding performance. Keeping new services and treatment costs at varying scale, can also enable different and stronger participation rates.
If you are considering developing a new spa and wellness facility, good timing is on your side. The demand for these facilities will be increasing in tandem with the average timeline of development. Furthermore, new facilities, developed well, will be stronger and more flexible than those which are outmoded and fixed. New potential developments also have the advantage of select market positioning with greater agility, supporting clearer market value and catering to varied demand.
In a previous HBR article, Wellness and Hospitality Resilience in Economic Uncertainty (2019) I reviewed practical tactics to protect spa and wellness hospitality investments. These points are especially applicable in today's market conditions. That article highlights the importance of operational multiplicity, flexible space planning, payroll and expense reductions and regional/community partnerships.
Balancing Experiences with Social Distancing
Salon and spa experiences are highly personalized experiences. Massage services, facials and body treatments are uniquely fit to individual preferences. While salon and nail services require different sanitation protocols, these services are also interpersonal and do not support social distancing. Those seeking to engage these services, understand this. By making sanitation and operational protocols clear to every guest, this can ease anxieties and provide comforting reassurance.
Whereby, wellness services, recreational and lifestyle programs are more expansive and wide-ranging; many of these activities can be offered while adhering to sensible social distancing measures. Programs such as cooking classes, nutritional workshops, yoga, meditation, and group hiking can easily limit participation, without cancellation. Another benefit of program diversity enables operational flexibility. Services such as salt room therapy, cryotherapy services, hydrothermal assets, and pool experiences can acclimate capacity as a way to enable self-directed, social distancing as needed.
These are difficult times, yet an opportunity for great growth. It is a critical time for spa and wellness strategic planning and multilateral investment considerations. Furthermore, as we await the potential influence of a second wave of COVID-19, it's a precarious time to divert from the severity of these recent occurrences. The five stages of grief demonstrate an emotional cycle of change that will reveal unprecedented changes to simple guest choices. The urge to hurry reopening and seize misplaced business, can present unnecessary challenges and lost opportunities for important review. Instead, this process can work in conjunction with ambitions to be more prepared and strengthen property diligence.
This is a year of intense transformation. The world will be going through various levels of turmoil and instability for the next couple of years. Restrictions to freedom and mobility may be an ongoing and uncomfortable challenge. With this in mind, inner-reflection and contemplation can give way to new perspectives, discovering new business goals and reorganizing operational practices. Ultimately, the core principles of hospitality are to welcome, host and provide what people need.
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