Issue No. 96: Walden Pond 2.0
Coronavirus decimated wellness tourism. And the entire hospitality industry took a massive hit. But, as the pandemic persists, a new take on wellness travel has taken hold.
Enter wellness relocation. From white-collar employees to solopreneurs, remote work has given rise to a modern-day manifestation of Henry David Thoreau’s experiment in constructive solitude — with a few notable differences.
Instead of subsisting off the land, today’s semi-isolated adventurers aren’t sacrificing creature comforts. Whether it’s the backwoods of Montana, a cabin in Upstate New York, or a beachfront rental in Nantucket, a detached dwelling, outdoor space, and high-speed internet are must-haves.
Zooming out: Like Thoreau’s stay at Walden Pond, wellness relocation will be temporary for most. Still, the implications could have lasting effects. The antithesis of the wellness culture, simplicity, stillness, and space just might be the self-care habits we can least afford to live without.
Wellness Tourism, Revisited
In Issue No. 57, we explored the topic of wellness tourism.
According to the Global Wellness Institute, wellness tourism is defined as travel associated with the pursuit of maintaining or enhancing one’s personal well-being. Of note, it’s one of the largest and fastest-growing segments of the overall wellness industry.
- The wellness tourism industry was 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/trip than the average tourist, while international wellness travelers spent 58% more than the average.
In short, wellness travel signals a shift away from vacation as escapism alone. Increasingly, taking time off is a means of jumpstarting, restarting, or strengthening a wellness routine.
The hospitality and travel sector has been quick to capitalize on this trend.
Westin added fitness equipment to select rooms. Hyatt Hotels Corporation acquired Miraval Group, a resort and spa operator, and Exhale, a provider of boutique fitness and spa services. And with the 2019 introduction of Equinox Hotel in NYC, the high-end health club chain seized the opportunity in the hospitality space.
But the experience extends beyond the accommodations. From in-flight perks like healthy meals, workouts, and guided meditations, air travel was leveling up. Meanwhile, wellness destinations were doubling down on immersive experiences, ranging from massage to mountain biking.
Then travel came to a screeching halt.
The coronavirus crushed the travel economy. Months on, the fallout is extensive.
- The US hotel industry is projected to shrink by 45% in 2020.
- As of mid-August, domestic passenger volumes are still down 70% from a year ago; international travel is down 88%.
As states begin to reopen, consumers are still hesitant to buy a plane ticket or check into a hotel.
For context, nearly two-thirds of hotels remain half full or less. And Airlines for America says it took three years for air travel to bounce back after 9/11 and seven years to recover from the global financial crisis. So the industry is bracing for a long and painful road back.
In contrast, as hotels suffer, Airbnb is on the upswing.
A leading indicator of wellness relocation, Airbnb has seen longer-term bookings rise during the COVID-19 pandemic. Further, rural rentals are booming. According to the company, hosts in rural areas of the US earned over $200M in June 2020 — an increase of more than 25% from the previous June.
Speaking to CNN, Airbnb CEO Brian Chesky summed it up this way: “There’s this really new trend where traveling and living are starting to blur together.” Travelers, he said, are driving a few hundred miles to their new temporary homes.
Working from home and suspicious of shared spaces, remote Airbnbs are the next best thing to Walden Pond.
Reverting to the most basic aspects of Maslow’s hierarchy of needs, travelers set out in search of fresh air and physical space.
A temporary reprieve from overcrowded cities and overwhelming circumstances, an A-frame house, fire pit, and Adirondack chairs are a powerful salve. Likewise, a change of scenery can be energizing. A trail run, megadose of vitamin D, and picturesque sunset put it over the top.
An added benefit, receding from society affords a special kind of freedom. With room to move comes space to think. And in a world dominated by distraction, focus is a finite and highly coveted resource. Being removed from the chaos but in range of WiFi proves to be an unrivaled productivity hack.
No wonder Bill Gates routinely takes annual “think weeks” in the woods. A habit he has kept since the 1980s, twice a year, Gates heads to a cabin in the Pacific Northwest. Free from distraction, Gates immerses himself in research papers, books, and thought for up to 18 hours a day.
But optimizing for efficiency isn’t the point, it’s a byproduct. One that results from a therapeutic easing of the cognitive load. By reducing anxiety, quieting the mind, and curbing burnout, seeking refuge in solitude can have a cleansing effect.
At least that’s been the experience of great thinkers, writers, philosophers, and leaders throughout history. As author Ryan Holiday put it, stillness is the key. In a book by that title, Holiday calls for quiet in a noisy world, using anecdotes from Marcus Aurelius, Anne Frank, and JFK to demonstrate the benefits.
In many ways, today’s wellness relocators are seeking stillness. Free from distraction and manufactured outrage, the hope is that a healthier, more creative, and fulfilling life is within reach.
Less is More
Meister Eckhart, a German theologian and philosopher said, “The soul does not grow by addition but by subtraction.”
A hard reset of sorts, COVID has brought this sentiment to the forefront. Forced to distinguish between needs and wants, the essentials came into focus.
As the virus subsides, whenever that may be, it will be interesting to see if the lessons learned outlive the pandemic. More specifically, as it relates to wellness and the topic of travel, will the pendulum swing back to bloated self-care budgets and high-end experiences? Or, will simplicity, stillness, and space reshape what it means to be well?
The reality probably lies somewhere in the middle. With the latter being free, expect to see more brands attempting to package the Walden Pond feeling, one that can be sold to weary wellness seekers.
Moments ago, in a move we hinted at early this year, Apple unveiled Fitness+, a new subscription service for virtual fitness classes.
As we predicted, Apple is following its integrations playbook to a T, using fitness content to bolster subscription revenue.
- The service will cost $9.99/month or $79.99/year.
- It features 10 different workout formats that require little or no equipment.
- Fitness+ is integrated with Apple Watch and Apple Music.
Read the full release here.
👀 Market Watch
$PTON: Last week, Peloton reported its Q4 and year-end earnings. As anticipated, the results exceeded expectations.
By the numbers:
- Fiscal Q4 sales rose 174% to $607M.
- Revenue for the year was up 100% YoY to $1.8B.
- Connected fitness subscribers were up 113% to 1.09M.
- Including digital-only subscriptions, Peloton counts 3.1M members.
Looking closer: Among the more interesting and impressive stats, on average, Peloton members are completing 25 workouts/month. And average net churn was .75%. Meanwhile, gross margins are up to 57%.
Peloton Strength? The company recently announced new additions to its product line, including the Bike+ and Tread, a more affordable treadmill. Of note, the screen on the Bike+ can be rotated for easy viewing off the bike, accommodating strength-based bootcamp classes.
While there’s been speculation as to whether or not Peloton would release a strength-focused product, CEO John Foley put that rumor to rest when he said: “We don’t think we need to have a dedicated product.”
$LULU: In related news, lululemon also reported earnings. Revenue rose to $902.9M, and online sales were up 157%. Now a player in the connected fitness space, lulu expects newly acquired Mirror to do more than $150M in revenue this fiscal year, up from estimates of $100M. In addition to adding Mirrors to ~15 stores, lulu plans to promote the device on its website and social media.
😅 Trying Times
Crushed by COVID, gym bankruptcies are stacking up.
The latest in a growing list of fitness chains, Town Sports International has filed for bankruptcy protection. Owners of hundreds of gyms, most notably New York Sports Clubs and Boston Sports Clubs, the company counts some 200 locations and more than 600K members.
Like Gold’s Gyms and 24 Hour Fitness, Town Sports hopes bankruptcy will provide a path to a more stable future.
While Gold’s Gym was bought out of bankruptcy by the Berlin-based fitness company that owns the McFIT chain for $100M, 24 Hour Fitness hit a snag in the proceedings.
Executive bonuses: As part of the bankruptcy process, 24 Hour Fitness plans to pay a total $8.8M in bonuses to 22 senior managers. Another $6.1M would go to less-senior employees.
Trouble is, the U.S. Trustee Program, a Justice Department agency that oversees bankruptcies, says the bonuses are excessive. As a result, the bonuses will be revisited in an upcoming hearing.
See you in court: Speaking of legal proceedings, the owners of hundreds of New York City fitness studios are suing Mayor Bill de Blasio for preventing them from reopening.
While gyms were allowed to reopen at reduced capacity, boutique studios were barred from opening. Citing the city’s public health experts, the mayor’s office said indoor fitness classes are a high-risk activity for coronavirus transmission. Hoping the courts will side with them, studio owners say there’s no such proof.
Head to head: The final note in this week’s legal roundup, F45 Training is suing Australia’s Body Fit Training, accusing it of patent infringement. Nothing new, both fitness companies have previously sued one another. This time, though, the rivalry is complicating F45’s plan to go public via a merger with blank-check company Crescent Acquisition Corp.
📰 News & Notes
- The Wing’s new wellness offering.
- PepsiCo to launch a sleep aid beverage.
- The mix-and-match connected fitness studio.
- Why we go to the gym. [Reread: The Gym is Dead Forever]
- MINDBODY readies Flex, its livestream workout membership.
- Molson Coors enters the non-alcoholic category. [Reread: Sober is the New Cool]
💰 Money Moves
- ABC Financial acquired Trainerize, a mobile fitness solution for personal training and member engagement.
- Bulletproof, a food, beverage, and supplement company, secured $13M in funding led by Beliv, Rocana Ventures, CAVU Venture Partners, and Trinity Ventures. More from Fitt Insider: The Keto Gold Rush
- Chilean food tech company NotCo, a Beyond Meat competitor, closed $85M in Series C funding from Future Positive, L Catterton, General Catalyst, Bezos Expeditions, and others. More from Fitt Insider: Meat vs. “Meat”
- Partake Brewing, a Toronto brewer of non-alcoholic, raised $4M in an institutional funding round led by CircleUp Growth Partners.
- Texas-based Academy Sports and Outdoors, a full-line sporting goods and outdoor recreation retailer, filed for an IPO estimated to be worth $500M.
- Spotlight Brands, a VC firm formed by Strand Equity Partners co-founder Seth Rodsky, has raised $500M in initial financing for strategic acquisitions in retail, food & beverage, beauty, fitness, and entertainment.
- The Pro’s Closet, an online seller of premium pre-owned bikes, added $12M in a funding round led by Foundry Group and Edison Partners. More from Fitt Insider: Fitness is Free
- UK-based Wattbike, makers of a stationary bike developed in collaboration with British Cycling, raised £11.5M ($14.8M) to broaden its reach in US and Asian markets. More from Fitt Insider: The Connected Fitness Wars
- GNC, the bankrupt health and fitness supplement retailer, canceled its scheduled auction and plans to sell to leading stakeholder Harbin Pharmaceutical Group Holding Co., a Chinese company, for a proposed $760M. More from Fitt Insider: DTC Vitamins
- Hungry Harvest, a produce delivery startup combating food waste, closed a $13.7M Series A round led by Paris-based CREADEV and including Danone Manifesto Ventures.
- Private equity firm Highlander Partners acquired sports nutrition startup Hilo Nutrition, makers of pre-workout gummies, for an undisclosed sum.
- Sports Entertainment Acquisition, a SPAC launched by former pro sports executives, filed for an IPO valued at $350M.