Choices and Sentience for Stability and Growth Through 2026

This article examines the economic and technological impact we can expect in the coming years while balancing risk, maladaptive systems, and radical market movements. This article shares general and useful thoughts to assist those looking ahead and seeking to navigate the next wave of potent change in the hotel and resort spa market.

Market Locus

While the world continues to experience global and economic unknowns, planning may feel challenging for the years ahead. The hotel and resort markets are on the precipice of convergence and evolution of new developments we have not experienced before. This will introduce new dynamics pertaining to financing, lending institutions, and investment concerns. This also reveals new variables of fragility that will likely lead to tremendous market and portfolio-shifting asset repositioning and model revisions. So, what does this mean for hotel and resort spa and wellness growth? It means many things…

Hotel and resort spas have unique markets and penetration points. Access to these facilities typically comes at a premium rate with high touchpoints, service orientations, and generous ambiance. While the luxury market has experienced robust market growth, the upscale and upper-upscale markets have sought ways to innovate and develop programs to compete while reaching different customer types. On the other side, new extended-stay wellness concepts are beginning to emerge downstream from upscale property types introducing new lifestyle programs and wellness assimilations through economy lodging.

Before the pandemic, I highlighted performance metric contrasts between the luxury and upscale markets in an HVS Hotel Spa Performance Report. This captures some of the significant variables between these markets and conveys the gaps in market gains and RevPAR averages. It was clear in this report that luxury-level hotel spas, on average, generate twice the revenues of an upscale hotel spa. While the market’s luxury segment maintains an exclusive positioning, the agility of wellbeing and new spa integrations have never been more compelling.

Maladaptive Systems and Market Performance

Spa and wellness demand expectations are running thick with optimism. While these prospects and growth expectations reveal bright spots for the coming years, significant and complex social, psychological, and demographic change dynamics will be coming with them. Hotel spas will likely experience a wide spectrum of dramatic transformations in the coming years. This includes new construction, expansions, conversions, and contractions, as the underpinnings at work in the market will be prime for bringing change. Along the way, this will illuminate maladaptive systems and outdated modeling. This will reframe core methodologies and pave new roads to eliminate stagnations and operational inefficiencies. Likely reframing core methodologies and ripple through both the spa business and company culture.

Typically, the best way to prepare for anything undergoing immeasurable flux is to plan. It becomes crucial to know the differences between cycles rooted in regularity, apart from well-known or anticipated short-cycle trends and patterns of the past. In the case of demand, albeit that customer engagement has accelerated to impressive highs, what are the known factors that are improbable to change? It’s important to unveil primary stability features to secure and protect performance levels in A, B, and C-type scenarios. For example, these might include rising competition levels and increasing supply while confronting economic and social impacts on customer demographics. This may also include novel tourism factors, unanticipated migration cycles, and radical movement across guest preferences.

AI Spa Integrations and Wellbeing

In the future, technology will continue to revolutionize everything, including the spa industry. This will create new and innovative ways to enhance the spa experience. The application of technology in spas mainly aims to improve services and offer personalized experiences while maximizing the benefits of personal care and relaxation. These technologies are expected to improve spa experiences through augmented reality (AR) and virtual reality (VR) applications.

This allows clients to experience virtual relaxation sessions from the comfort of their homes or immediate surroundings. Further, it lets guests view spa facilities, watch live demonstrations, and sample service protocols.

The use of artificial intelligence (AI) and machine learning algorithms will help spas track client preferences and customize treatment plans to meet specific needs. A rudimentary example of this is AI-powered software applications that analyze a client’s skin type, review therapist recommendations, and reference previous treatments they have received to create a personalized treatment plan. Machine learning algorithms will also help spas accumulate data on specific clients to offer targeted upgrades and recommendations. These ideas are not new but will quickly become new data point integrations and lead to new service KPIs.

From a physiological standpoint, innovations in wearable devices, robotics, and AI will also evolve to track progress during treatments providing real-time biofeedback data. This will enable more targeted treatment adjustments and monitor clients’ heart rates, tension points, and stress levels. Amalgamated with third-party health and wellness applications, this will analyze general wellness patterns and provide more valuable diagnostic insight into the overall health and wellbeing of the guest. Further, accelerating the focus on wellness and health programming to dial in and strengthen new lifestyle habits.

Photo: Luke Chesser

Strides in Technology and mHealth

The future of technology in the spa and wellness industry is expected to be game-changing. With AR and VR applications, AI and machine learning algorithms, robotics, and new generations of wearables coming to market with increasing speed. Diagnostic biofeedback technologies with direct multifaceted, multisensory technologies capable of highly personalized care will increase in agility and self-awareness. These applications will also help unlock a new segment of spa customers. There are many people who are not interested in high-touch personal spa services. These guests prefer relaxation and spa benefits complete with self-directed amenities and multisensory experiences without high-touch traditional spa treatments.

While these leaps in technology may be useful, they will undoubtedly come with hard edges and their own risks. It is probable that there will be some resistance to deploying many of these new systems. In addition to foreseeable learning curves and investment costs, some of these new technologies will be assimilated to acquire and maximize personal data metrics, inciting privacy concerns. Data and privacy have become contentious topics throughout the digital market. However, there will be vast advantages to consider while also bearing in mind the enormity of utilization and the speed of progress.

Over 350,000 mobile health (mHealth) fitness and medical apps are available across major app stores. The volume of these app selections has nearly doubled since 2015, with increasing smartphone use and heavy investments in the digital health market. In 2021 the lifestyle mHealth market related to fitness, diet, and general health was valued at $47.7 billion and is projected to grow to $149 billion by 2028. This estimated growth exemplifies the acceleration of users in the full tilt of these technologies.

From an investment and strategic standpoint, as these applications grow, they will likely begin to fuse into consumerism of all kinds. This plays directly into the hotel and resort market, tourism, and spa and wellness sectors. Spa business programs increasingly seek to optimize integrations that upsurge user accessibility and leverage premium brand preferences. As such, leading brands will find it compulsory to extend products and services further into the digital landscape of apps and platforms outside of the spa market. This is already clear to see in retail, health, lifestyle, and medical markets.

Strategic Balance and Operational Readiness

The challenge of capturing the right balance between people, programs, and profitability amplifies the need to examine operational readiness. People are central to any service industry, especially those directed at personal care. The interpersonal relationships developed among co-workers in these settings often form deep, long-lasting friendships. When faced with displacement or disruption, emotionality can be contagious. The internal support systems needed to nurture and maintain healthy work environments will become less optional and increasingly fundamental to back true success.

While proposition and program changes are common and occur over time, viewing these with a strategic eye is essential to adapt with flexibility in uncertainty. The spa market has been notoriously slow to evolve. While faced with increasing demand and growth, this yet remains broadly true. Many longstanding programs are overdue to experience a significant evolution. This is good news for both the business and its guests. Contemplating targets and long-run strategies are vital to shaping this succession while keeping up with the market’s booming momentum.

On the profitability side of things, in addition to rising costs and inflation, the highly transient nature of the spa market has created significant instability, low-trust supplier partnerships, and fragile purchasing cycles. This inevitably swells cost margins and results in wasteful spending. The speed at which it is necessary to continue to compete does not extend the leisure of having extra cracks in the bucket. Developing core supplier partnerships that outlast operator turnover and transiency is one way to mitigate risks related to frequently frail rotation cycles.

Photo: Douglas Sanchez

Future Incentives and Focus Points

The hospitality industry continuously adapts to new trends and technologies to cater to the ever-changing needs of its customers. Looking into the future, the hotel and resort spa market will continue to become more sophisticated, with advancements in digital technology and the rising demand for meaningful health and wellness services. There is also a growing demand for eco-friendly and sustainable spa experiences designed to promote wellbeing and relaxation while protecting local and environmental interests.

While sustainability and green spa initiatives have been around for a while, this has had mild traction in the past, mainly due to high investment mandates and slow returns on investment. Whereas these investments may have been dismissed as overpriced and undervalued in the past, new incentives alongside Environmental Social Governance (ESG) programs will make these more appealing for companies and organizations in the coming years. We can expect to see new energy being infused into these areas, from technology and infrastructures to new materials. This will drive more attention and desire to renovate and build everything more efficiently and responsibly.

Emotional Instabilities and Unknowns

The awareness of market fragilities and overleveraged spending has been moving around in the economy for a long time. Likewise, this is true for the hospitality and lodging markets at large. Many of these factors commonly go unnoticed at operator levels, and the pace of retraction and instabilities becomes inexorable. In the coming years, the strides of change will mark new milestones and set new high-level and granular benchmarks. Prepare to pivot.

Some of the best ways to understand the incoming volatilities in the market include operational auditing from both internal and external perspectives of the performance of the business. These can be nuanced in scope or comprehensive from top to bottom. The significance of doing this has never been more relevant and important to do than now. You can’t know where you’re going if you don’t know where you are. Furthermore, having a deliberate understanding of the important metrics apart from the less meaningful ones is imperative.

Don’t Get Captured by Trends

Trends can be a useful way to recognize what is coming. The lure of falling into what the newest and hottest things are can be intriguing. Meanwhile, social media and cultural influence greatly magnify today’s popular and on fleeting trends. This has become ever truer in the last ten years. Collectively, it’s common and useful to follow trends to organize and plan various strategies. However, many trends are propagated for the moment, can be mislaid, and quickly become exaggerated investment traps.

Macro Movements

The tension we can anticipate feeling in the coming years is real. Change doesn’t come easily. It’s not comfortable. We open witness resistance and resentments that impede our thinking and potential, both from a business view and a human one. Here are 4 sweeping themes we can expect to come alive and touch us in the coming years.

• A Reuse and Recycling Renaissance: Innovations and reuse programs for building and design materials, products, and packaging will introduce new-to-market businesses and elevate the perception of “used and reused,” leaning into mindful consumerism, sustainability, and support provisions for environmentalism.
• Quality Food and Water: The value of quality food and water will increasingly become a consumer issue. Synthetic and bioengineered foods and ingredients are already on the market. As AI programs further refine these, we can expect high-density nutrient food systems to be deployed and emerge alongside their beloved organic and native counterparts.
• Rapid Adaption: Undergoing swift technological change will expedite the need for continued and advanced training programs. There will be challenges to adapt quickly and allocate investments for this in proportion to the magnitude of growth. These will be multipart and are likely to be underestimated by many.
• Staffing and Mental Health: With increasing social safety net systems, society at large will need to relearn the how, where, and why they are pursuing personal ambitions and work. This will kick up the need to expand employee wellbeing and address trauma, stagnation, and disinterest. These factors are less likely to stem from compensation and popular HR issues and more likely to be far-reaching and deeply personal.

Final Thoughts

There is a lot to say about the future of the hotel spa and wellness market.

The dichotomy between technological innovation and organic and human preferences will be tested. We can expect to see considerable movement in both directions. How this impacts the hotel and resort market will essentially come down to the business’s stance on novelty and strategy. Many of these scenarios will quickly move from trials to rollouts and require significant sacrifices.

Taking the time to dive into the details is one way to fully understand the direction you must go to see the forest through the trees. When facing the crossroads, my best advice to achieve personal wellness is three simple things, eat real food, have real friends, and do good things. The more agency and wellbeing you can achieve as an individual, the more likely you will impart the important values and systems necessary to succeed.