What is a Health-Oriented Destination Spa?

What is a Health-Oriented Destination Spa?

A health-oriented destination spa is a resort where all the guests participate in the programs for healthy eating, fitness, relaxation, and learning.

The health-oriented destination spa industry is a $550mm to $600mm industry, and is experiencing 10% to 15% annual growth. Average industry guest occupancy rates are at 70% and higher, with the leaders sustaining over 80% occupancy rates. Forecasts are for continued double digit growth due to the following trends:

Aging baby boomers with high disposable incomes and a strong desire to continue to feel youthful and healthy as they age;
Wellness trends, with traditional medical care providers recognizing the efficacy of alternative care therapies, including spa therapies, and integrating these methods into the traditional medical care model;
Growth of the popularity of healthy vacations, evidenced by the expansion of industry leaders, and new entrants into the industry, such as the Inn at Woodloch in northeastern Pennsylvania.

The industry leaders are expanding, focusing on their existing locations in the Southwest and Northeast.

Canyon Ranch, with Tucson, AZ and Lenox, MA locations and over 40% share of the market, with about 306 guest rooms across both locations, and capacity for 471 guests. Canyon Ranch is focused on enhancing their current locations and on developing condo-hotels in urban markets;
Miraval, in Catalina, AZ has 106 guest rooms, and an estimated $50mm to $60mm in revenue, is expanding capacity at its current site, adding lifestyle homes, developing a condo-residential building in Manhattan, and re-positioning themselves as a medical wellness spa with the addition of Andrew Weil, M.D. to their leadership team. Steve Case, founder of AOL purchased a majority stake in Miraval in late 2004;
Golden Door, in Escondido, CA a destination spa with 49 rooms was sold by Wyndham Hotels in 2005 to an investment group. Under Wyndham, Golden Door aggressively expanded into day spas located in luxury destination resorts such as The Boulders and The Bonaventure;
Lake Austin Spa Resort, Austin, TX is privately owned and expanded in 2004 to offer a 25,000 square foot spa at its 40 guest room location in Lake Austin, TX.

A destination spa is a model that works well within a four-season climate such as we find in Northwest Indiana/Southwest Michigan.

Canyon Ranch, in the snow belt of Lenox, Massachusetts, publishes that their average annual occupancy rates consistently range from 80% to 83%. This location is consistently ranked as a leading destination spa by Conde Naste and others, providing strong evidence that a destination spa catering to the “drive-to” market and located in four-season resort can be highly successful.
The American Club in Kohler, Wisconsin is a destination resort primarily focused on golf, with a pampering spa on-site and a fitness facility. This resort is booked throughout the winter, frequently requiring a several week lead time to obtain reservations through the winter season.
Other highly regarded health-oriented destination spas that are thrive in four-season winter locations include The Mayflower Inn in Connecticut; The Norwich Inn in Connecticut; New Age Spa in upstate New York, New Life Hiking Spa in Killington, Vermont, Spa Eastman in Quebec Province, Canada, and Cooperhood Inn & Spa in Shandaken, New York.

Health-oriented destination spas in warm weather locations, such as Canyon Ranch in Tucson, and Miraval in Catalina, Arizona, contend with summer temperatures in excess of 100 degrees Fahrenheit for weeks at a time. This is their equivalent of our winter season. Yet, through creative programming and discounted pricing they continue to thrive and maintain average annual occupancy rates at 70% and higher.

See www.destinationspas.com, the website for the industry trade association for more information.