Insights from APT's Hospitality & Travel Practice

Do “wellness rooms” benefit hotels’ financial health?

September 17th, 2014 | Posted by Haley Jackson in Uncategorized

Vitamin C infused showers, organic mattresses, and electromagnetic field protection promote the wellness of guests who stay in the recently introduced “Stay Well” rooms at MGM Grand; but are these costly features also promoting the hotel’s financial health? Capitalizing on the growing trend of incorporating more healthy habits into travel, hotels like MGM have added these rooms over the past year in response to consumer demand. While guests pay a premium to stay in these unique rooms, ensuring that patrons receive the complete wellness experience requires significant cost. Beyond the upfront expenditure of transforming the room, additional ongoing costs can include maintaining a heightened level of customer service and an expanded, healthy menu.

The rise in “Wellness Tourism” is potentially beneficial for the hospitality industry and travelers alike. However, hotels should consider a few key issues before rolling out a wellness room concept, such as:

  • Considering the costs, what is the true ROI of introducing wellness features to guest rooms?
  • For which types of hotels and markets will this room transformation have a positive impact on ADR and occupancy?
  • Are the spa-like features within wellness rooms cannibalizing existing revenues from hotel spas or luxury suites?
  • What is the appropriate premium (e.g., an additional $30/night) to charge for these specialty rooms? How should pricing for wellness rooms vary by hotel and by market?
  • Should a hotel decide to add wellness elements to rooms, what is the optimal number of rooms to convert? When designing the rooms, which features (e.g., air purification, warm lighting, etc.) actually drive the largest impact on guest satisfaction and RevPAR?

Given the capital risk involved with introducing wellness rooms, hotels considering these upgrades must accurately predict the overall KPI impact prior to broadly rolling out the program. Executives can use in-market tests to confidently identify the most receptive markets, the most impactful features, and optimal pricing before implementing the program to ensure that wellness initiatives provide rejuvenation to both guests and bottom lines.

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