Insider No. 57: Wellness, Travel, & Hospitality Converge
How do you vacation? While some prefer relaxation over adventure, or partying over being pampered, there’s a growing demand for wellness-focused travel.
Going beyond a weekend of self-care at the spa, wellness tourism now informs our choice of destination, airline, and lodging, as well as what’s on the menu and itinerary. What’s driving this trend and how is it playing out? Let’s take a look.
The convergence of wellness with travel and hospitality has created the fast-growing category of wellness tourism.
- The wellness tourism industry is expected to reach $919B by 2022.
- In 2017, travelers took 830M trips that included a wellness component.
- Also in 2017, domestic wellness travelers spent 178% more per trip than the average tourist, while international wellness travelers spent 58% more than the average.
What it is: According to the Global Wellness Institute, wellness tourism is travel associated with the pursuit of maintaining or enhancing one’s personal well-being. This definition is worth highlighting and examining further.
The emergence and growth of wellness travel signal a transition from vacation as escapism to vacation as an extension of our healthy habits. Instead of using travel as an excuse to let loose, we’re taking time off to jumpstart, restart, or strengthen our wellness routine.
Going deeper still, wellness travel signifies a broader shift from the experience economy to the transformation economy.
Transformation > Experience
In 1998, B. Joseph Pine II and James H. Gilmore penned a Harvard Business Review article in which they introduced the “Experience Economy”. In short, the pair used the progression of economic value to explain distinct economic offerings ranging from commodities to goods, services, and experiences.
“Commodities are fungible, goods tangible, services intangible, and experiences memorable.”
Flash-forward to the present day and we’ve arrived at the fifth and final economic offering: transformation. According to Pine and Gilmore, consumers want more than a memorable experience — we’re hungry for transformative experiences powerful enough to change us.
“Transformative experiences are those that foster self-actualization and change the customer in a qualitative way.”
Altogether, the rise of wellness, the prevalence of burnout, and the desire for life-altering or -enhancing experiences have fueled the growth of wellness tourism. But, while these underlying factors propel the industry forward, they’re also redefining it. As a result, hospitality companies, startups, and fitness brands are seeking to capitalize on this trend.
Fit retreats. From SoulCycle to Equinox and Goop to Well+Good, it seems like everyone is getting into wellness retreats. For brands, it’s the perfect way to connect with their cultish following while extracting additional dollars from its most devoted customers.
This approach is proving to be a hit with younger consumers. One survey of 5,000 millennials found that 40% of respondents would rather go on a fitness retreat with their favorite instructor than attend a five-star resort. More telling, though, 91% of respondents said they’d never been to a high-end resort.
Spas & resorts. Millennials might be abandoning spas, but spas and resorts aren’t willing to give up on wellness-focused travelers of any age. In fact, they’re actively courting them.
Miraval is going to great lengths to help guests disconnect. From floating meditation and “intuitive massage” to tightroping and beekeeping, there’s plenty to do. And, while the resort isn’t confiscating phones, they’re banned in public spaces. Similarly, Canyon Ranch is seeking to reaffirm its place among wellness destinations by focusing on a personalized, immersive experience. This fall, the 40-year-old hospitality group introduced its newest location in Woodside, California.
Airbnb Experiences. The shifting travel landscape is further complicating matters for spas, while also creating new forms of wellness tourism. Earlier this year, new numbers from Airbnb spoke to this trend. The hospitality company reported a surge in bookings for wellness-related Experiences, citing a 500% increase from 2017 to 2018. Of note, growth was strong among seniors (ages 60+), as well as with Gen Z and millennials, where more than 800% growth was reported in both age groups.
The whole trip. Destination aside, the entire journey is getting the wellness treatment. Healthy hotels like Sanctuary or Equinox Hotel embody the wellness lifestyle. Now, airlines are rushing to offer midair wellness solutions — Turkish Airlines unveiled its Fly Good, Feel Good program and Les Mills, a pioneer in group fitness, partnered with Air New Zealand to bring on-demand, in-flight workout videos for long-haul flights.
Mindfulness is also a popular in-flight perk, with Calm and Headspace both striking airline partnerships. There are even apps, like Timeshifter, aimed at combating jet lag. Plus, concepts like ROAM Fitness are hoping to put more gyms in airports.
Takeaway. All signs point to us wanting more wellness, not less. As a result, expect the convergence of wellness, hospitality, and travel to continue. The outcome will give rise to ever-more-inventive wellness destinations, activities, and businesses geared toward helping consumers achieve self-actualization through transformative experiences.
✌️ Peace Out
Last week, SoulCycle CEO Melanie Whelan resigned. Whelan also vacated her role as director of the company’s board. This news comes amid a series of challenges for the cycling studio.
- In May of 2018, SoulCycle scrapped its IPO plans.
- At present, the studio chain faces mounting competition from the Peloton of ‘X’.
- This summer, the company was hit with boycotts over a fundraiser for President Donald Trump hosted by Stephen Ross, the chairman of Soul’s parent company.
- The Trump fundraiser backlash broke the same day Equinox and SoulCycle announced plans for its own at-home Peloton-like bike, treadmill, and digital content.
Now, with Whelan’s departure, the studio will begin its search for a new CEO. Until then, Sunder Reddy, SoulCycle’s chief financial officer since 2017, will assume the role of interim CEO.
Looking ahead. The hasty exit and the lack of a succession plan signal some behind-the-scenes drama that may or may not be revealed. Still, SoulCycle’s place in the fitness landscape makes it an attractive role for the right exec.
🐾 The Pet Wellness Boom
Back in Issue 27, we touched on the emergence of pet wellness. In the time since, the category has only gained stream as customers and investors alike spend big bucks on the pet-friendly wellness trend.
For context: According to the American Pet Products Association, as of 2018, 68% of all US households own a pet. That same year, pet owners in the US spent $72.6B on their pets.
Pet Wellness 2.0: Initially, investors and entrepreneurs saw healthy pet food, like The Farmer’s Dog, Ollie, and Wild Earth, as a market ripe for disruption. But now, the entire pet category is up for grabs. And new-age veterinarians and pet supplements are among the hottest segments.
- In recent months, Modern Animal ($13.5M), FirstVet ($27M), and Small Door ($3.5M) each closed new funding to disrupt traditional vet clinics.
- In 2018, consumers spent $636M on pet supplements. Following the DTC vitamin blueprint from Ritual or Care/of, pet-focused brands like Goodboy, Dandy, and Jinx are moving in.
Takeaway. The rise of wellness knows no bounds. What next? Since seemingly anything goes, your guess is as good as ours.
📰 News & Notes
- ClassPass has a spam problem.
- Inside Parsley Health’s newest clinic.
- People are not okay with Peloton’s latest commercial.
- Fitness wearables are ignoring a $50B market: women.
- Senior care, an emerging wellness market, needs to be disrupted.
- Boulevard, a booking platform for spas and salons, adds former MINDBODY CFO.
- Are you interested in helping us improve Fitt Insider? Take this quick survey.
💰 Money Moves
- Bengaluru, India-based Cure.fit is said to be raising another $100M for its vertically integrated health and fitness company. Temasek is considering the investment at an $800M valuation. Go Deeper: Cure.fit’s Ambitious Plan for Health & Fitness
- Gymshark, a UK-based athleisure company, is reported to have appointed advisors to help lead a £100M ($129M USD) raise in capital.
- Oprah-backed healthy eatery True Food Kitchen is exploring options for new private capital to fuel expansion.
- Vice Ventures invested an undisclosed sum into Maude, a sexual wellness company.
- PepsiCo is acquiring BFY Brands, the maker of PopCorners snacks, in an effort to bolster its “more-nutritious” snack offerings.
- ANTA Sports, China’s largest sportswear makers, is considering a sale of US fitness equipment company Precor, which could fetch around $500M.
- Canada Pension Plan Investment Board invested $1.07M in Latin American fitness chain Smart Fit.
- Christy Sports, a winter sports specialty retailer, received a strategic investment from TZP Group.