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Wellness is one of those catchall terms that encompasses a number of things: health, fitness, nutrition, mindfulness, you name it. But it’s also a sector that’s being closely watched by many of the biggest names in the hospitality industry, too, as well as destinations such as Beverly Hills, California.
Earlier this year, for example, Hyatt purchased Miraval Group for $375 million in an effort to expand the company into “adjacent spaces,” according to Hyatt CEO Mark Hoplamazian. Miraval is a wellness resort and spa company best known for its destination Miraval Arizona Resort & Spa in Tucson, Arizona, and Hyatt has big plans to incorporate Miraval programming throughout its portfolio of brands.
In December, AccorHotels announced it had formed a strategic partnership with Banyan Tree, a Singapore-based company known for its luxury properties and spa offerings.
Veteran wellness/hospitality executives think the time is right for the industry to focus on this part of the guest experience, but they also question whether the big brands have the expertise and knowledge to pull it off.
“Hotel companies have no business doing the wellness programs we’re doing,” said Six Senses Hotels CEO Neil B. Jacobs. “We’re really passionate about it and it’s not so easy to pull off. Ask 100 people to define what ‘wellness’ means to them and you’ll get 100 different responses.”
Likewise, Canyon Ranch chief operating officer Tom Klein echoed Jacobs’ sentiments in a separate interview. “You have to ask yourself: What really is wellness? When you see these strategic acquisitions and partnerships, you realize that these aren’t their core businesses but it’s an important part of satisfying guests’ needs. It’s a core business for us, though.”
Wellness Is Best Left to the Experts
Both Jacobs and Klein said that because their respective companies have a long history of working in the wellness space, they’re focused on differentiating themselves from other emerging players.
Six Senses was founded in 1995, and has resorts and spas located throughout the world. Jacobs joined the company in 2013 after a long tenure with Starwood Capital and Four Seasons Hotels & Resorts in Asia-Pacific.
“Wellness is more about just having a spa,” said Jacobs. “It’s about having a truly integrated wellness program that’s meaningful. The barrier to entry for true wellness is expensive and the yields for it aren’t as strong as they would be for traditional hotels.
“Having wellness be a part of the hospitality experience does drive average daily rate in hotels and it does increase the length of stay, but to do this well, you’ve got to do the right thing and know that you’ve got the opportunity to change people’s lives.”
Klein of Canyon Ranch notes that the wellness industry is estimated to be a $3.7 trillion business worldwide. “Wellness is a part of the DNA of Canyon Ranch and when we first started, there weren’t many players out there,” Klein said. “Today, there are 20 to 30 competitors in the space. But we’ve always integrated science and medicine into the wellness piece and taken a more integrated approach. I think it’s great that wellness is now at the forefront.”
Canyon Ranch, which is best known for its two resorts in Tucson, Arizona and Lenox, Massachusetts, as well as its SpaClubs at Sea with various cruise lines, has undergone a major leadership transition after nearly 40 years in business. Founders Melvin and Enid Zuckerman, as well as Jerrold Cohen, have retired and the company is now being run by Goff Capital, with a new CEO, Susan Docherty.
Six Senses CEO Weighs in on the Increasing Competition
Jacobs, in particular, had some thoughts to share regarding the future of his own company, as well as the recent moves being made by players such as AccorHotels and Hyatt, and he thinks the increased focus from big hotel players in the wellness arena is a “trend that will continue.”
“We’re not really interested, at this point, in being acquired,” he said, referring to Six Senses.
Of Miraval, he noted that the company’s former CEO, Steve Case, had wanted to merge with Six Senses a few years ago, but instead the company was purchased by KSL Group, a private equity firm.
“The interesting thing to watch is what Hyatt is going to do with it, but I must say, it’s hard to make money just from having destination spas or resorts.”
“AccorHotels,” he added, “is shopping. They have plenty of money and they are all about world domination. Banyan Tree just has a different view on the world and it’s expanding the way their model works, where they have their own real estate. It’s hard to do that and move from being a regional to a global player.
“Banyan Tree is a lovely company, but I don’t know that they’re really all about wellness… I would suspect Accor will ultimately own the entire company — their strategy is to come in at five percent and come back for more. I think Banyan Tree will become another one of their brands.”
What’s Next for Six Senses and Canyon Ranch
At Six Senses, Jacobs is focused on expanding the brand on a global scale. Upcoming locations for the brand include Bhuatn, Bali, Cambodia, and New York City. The company is also looking at applying its integrated wellness programming for children as well.
At Canyon Ranch, Klein said the company is taking a closer look at developing more urban wellness spas, as well as growing its contracted business with companies to bring their executives and employees to their resorts and spas.
“The demand in urban centers for more wellness programming and offerings is becoming more important,” he said. “There’s more interest in wellness living communities these days and people are realizing that wellness goes beyond a spa treatment. It’s really at the forefront of people’s minds today.”