RLA Global has published the fifth edition of its annual Wellness Real Estate Report.
Wellness hotels showed a positive growth trend globally in 2023, according to the 2024 report.
Luxury hotels offering key wellness services led the way in total revenue per room (TRevPAR).
Luxury hotels performed best in terms of ADR and TRevPAR growth across all three categories of wellness facilities (major, minor, and non-wellness).
A new study found that hotels that offer wellness amenities saw significantly increased total revenue per room (TRevPAR) in 2023. Wellness Real Estate Report It was prepared by RLA Global in collaboration with P&L benchmarking firm HotStats.
Small wellness venues (those generating less than US$1 million (€932,700; £785,200) or less than 10% of total revenues from wellness and leisure) stood out, with an average 26% increase in TRevPAR from 2022.
“Hotels offering wellness services saw positive growth trends across all key year-over-year KPIs including ADR (average room rate), RevPAR (revenue per available room), TRevPAR and occupancy,” said Roger Allen, group CEO, RLA Global.
“Smaller wellness venues demonstrated greater flexibility in optimizing operational costs, which contributed to revenue. However, the performance also illustrates the fragmentation of the hotel wellness market, which investors should pay close attention to.”
A recent report used data from HotStats to evaluate the average hotel performance of nearly 11,000 hotels around the world across major, minor and non-wellness categories.See end of article for definition*).
RLA Global analyzes property-level KPI results such as ADR, occupancy, TRevPAR, GOPPAR (gross operating profit per room) and GOP (gross operating profit) to show how wellness contributes to a hotel’s revenue flow, operating costs, margins and overall profits.
Asset Class Comparison
The 2024 publication, RLA Global’s fifth annual report, compares results across luxury, upper upscale and upscale hotel classes for the first time.
The study found that luxury hotels that offer core wellness services saw three times higher TRevPAR than top-tier hotels, yet experienced a 4 percent decrease in ADR.
Luxury hotels achieved the highest ADR and TRevPAR growth in the major wellness, minor wellness, and non-wellness categories.
“There are many different reasons why people build and own hotels,” said Rachel Rothman, head of hotel research and data analytics at CBRE. “The report clearly highlights that, to generate profits, most investors would be better off owning a luxury property with wellness amenities rather than going all-in on luxury.”
Changing guest habits
The report also highlights revenue generation and profitability trends by sector: for example, average F&B revenue per room increased slightly across all three categories last year, primarily driven by spending in restaurants.
However, large and small wellness hotels saw a decline in beverage sales and room service revenues, both of which fell by 13% and 12%, respectively.
“City centre hotels are seeing declines in bar and room service sales as guests become more health conscious and drink less alcohol, and food delivery apps offer guests more attractive and cheaper options,” said Alex Santamaria, founder of Aware Hospitality.
For more detailed data and in-depth analysis on hotel performance, download the full report here.
*Major, minor, and no wellness categories
• Wellness-focused hotels – Hotels with annual wellness and leisure revenues of over US$1 million (EUR 932,700, GBP 785,200) or accounting for more than 10% of revenues.
• Mild wellness hotels, where wellness and leisure revenue is less than US$1 million (€932,700; £785,200) per year, or less than 10% of the hotel’s total revenue.
• Hotels without wellness – There is no wellness-related revenue.
About RLA Global
RLA Global (Resources for Leisure Assets Global) is an international consultancy specialising in leisure and wellbeing in real estate.
About Hot Stats
HotStats provides monthly P&L benchmarking for the hotel industry, collecting detailed financial data from over 11,000 hotels worldwide to provide owners, operators and investors with valuable insight into the financial performance of their properties relative to competitors.
