Wellness Real Estate Mid-Year update released by RLA Global

Advisory firm RLA Global has released its 2024 Wellness Real Estate Mid-Year Report, offering critical data and analysis, plus actionable insights for real estate investors and developers.

The report compares property-level data from January to June 2024 with the same period in 2023.

The mid-year update evaluates average hotel performance based on HotStats data, covering major, minor and no-wellness hotels of different classes worldwide.

RLA Global compares year-to-date figures with the same period in 2023 to help operators understand how hotels with different wellness offerings perform across all segments of hospitality.

Headline findings show mixed results for wellness hotels, with minor wellness leading growth.

“Data from the 2024 Mid-Year Report suggests hotel investors, developers and operators must take a closer look at how the major and minor wellness categories will serve the best interests of the respective asset class in terms of profitability,” said Roger Allen, CEO of RLA Global.

Key findings from the Wellness Real Estate Mid-Year Report

• The wellness hotel segment as a whole recorded mixed financial performances.
• Hotels with minor wellness offerings continued outperforming major wellness properties in terms of revenue and profit generation globally.
• Minor wellness hotels boosted Average Daily Rate (ADR) by 5 per cent and Total Revenue per Available Room (TRevPAR) by 11 per cent from January-June 2024.
• When compared to properties with no wellness offer, those with minor wellness amenities have 28 per cent higher TRevPAR. This demonstrates that even modest wellness offerings can substantially increase total revenue.

• Major Wellness properties saw a 3 per cent and 0.4 per cent decline in these ADR and TRevPAR, respectively.
• Minor wellness drove revenue growth in the luxury hotel category.
• Major wellness remained a premium asset class with much higher TRevPAR – 63 per cent higher than minor wellness properties.
• A 13 per cent higher ADR for major wellness properties suggests guests are willing to pay a premium for extensive wellness amenities.
• In terms of operating level profitability, major wellness hotels had a 9 per cent fall in Gross Operating Profit per Available Room (GOPPAR).
• This compared with a 12 per cent and 28 per cent rise for minor wellness hotels and properties with no wellness services, respectively.

Performance trends and profitability

The data implies that wellness offerings drive revenue more through increased spending on services and amenities than through higher room rates. This could indicate that hotels might benefit from marketing their wellness offerings as value-added services.

Hotels with significant wellness offerings appeared to achieve higher GOPPAR in the year to June 2024 compared to those with minor or no wellness amenities.

Wellness real estate encompasses residential, office, hospitality, mixed-use and medical wellness properties, integrating wellness-focused design, materials, amenities and services into their architecture and function. Download the 2024 Wellness Real Estate Mid-Year Report here.

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