Hotels with wellness amenities saw healthy growth in total revenue per available room (TRevPAR) in 2023, with those generating 10% of their total revenue from wellness and leisure services standing out, recording an average increase of 26% in TRevPAR, compared to 2022. While, this growth was led by luxury hotels, which offer their clientele significant wellness services. This is the key conclusion of the Wellness Real Estate Report, published by consultancy RLA Global, in collaboration with benchmarking firm P&L HotStats, for the fifth consecutive year.
A comparison of results in the Luxury, Upper Upscale and Upscale hotel categories in the Wellness Real Estate Report 2024 yielded interesting findings. For example, Luxury properties with significant wellness offerings generated three times the TRevPAR compared to Upper Upscale hotels, but underperformed Upper Upscale in annual TRevPAR growth and experienced a 4% decrease in average daily rate (ADR).
Upper Upscale hotels performed best in terms of ADR and TRevPAR growth in the Major, Minor and No Wellness categories.
The Wellness Real Estate Report 2024 also evaluates revenue generation and profitability across various segment functions, which also reveals notable trends in wellness hotels.
Average F&B revenue per occupied room, for example, increased slightly in all three categories last year, primarily due to catering spend. However, beverage sales declined at Major and Minor Wellness hotels, which also saw room service revenue decline by 13% and 12%, respectively, in 2023.
“There has been a positive growth trend in hotels with wellness offerings across all key annual performance indicators, including ADR, RevPAR, TRevPAR and occupancy. Small wellness properties demonstrated great flexibility in optimizing operating expenses, contributing to their bottom line performance. But the performance also showed a fragmented wellness hotel market that investors should consider carefully,” said Roger A. Allen, managing director of RLA Global.
