hotel business - hotel wellness to the bottom line

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Hotel WellnessCreating a “healthy”

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Standing, left to right, are: David McCaslin, Northwood Hospitality Group; Peter Scialla, Stay Well by Delos/Delos Living, LLC; Homer Williams, Williams & Dame Development; Adam Glickman, EVEN Hotels/IHG; Stowe Shoemaker, William F. Harrah College of Hotel Administration, University of Nevada, Las Vegas; and Gregg Herning, MGM Grand Hotel & Casino. Seated, left to right, are: Mark Wuttke, The Wuttke Group; Andrea Foster, PKF Consulting USA; and Ralph Newman, WTS International.

By Nicole carliNo

Wellness is not a trend.That may sound like a contradictory message for Hotel Business’ re-

cent Wellness Roundtable, held in Las Vegas at the MGM Grand Hotel & Casino, but it’s an idea that executives reinforced throughout the conver-sation: Wellness is not a trend or a fad; it’s a lifestyle—and it’s here to stay.

Hosted by Delos Living, LLC, and moderated by Hotel Business’ Stefani C. O’Connor, executive news editor and managing editor, roundtables, par-ticipants in the conversation agreed that the lifestyle of guests—Millenni-als, Gen Xers and Baby Boomers—is changing, and hotels need to adapt to that. “It’s going to be the future,” said Homer Williams, chairman, Wil-liams & Dame Development. “The concern people have is legitimate, and it’s an area that really hasn’t been addressed. This is breaking new ground, but important ground.”

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Andrea Foster, VP/director of hospitality ser-vices New England/director of spa/wellness consulting, PKF Consulting USA, agreed, high-lighting the timeline of popular hospitality initia-tives from tennis courts to golf courses to fitness centers to spas. “And now, it is about wellness,” she said. Gregg Herning, VP/hotel sales, MGM Grand Hotel & Casino, noted that with those trends, “hotels learned to give the consumer what they’re already expecting. We need to stay ahead of the curve.”

Adam Glickman, brand head, EVEN Hotels/IHG, thinks about wellness on a global scale. “Wellness is part of our everyday life, and if we start with customers here in the U.S., it’s going to apply in different ways to customers around the globe,” he said. “It is, in many cases, greater already for customers in other countries, but it’s not a passing fad.” Ralph Newman, SVP/spa di-vision, WTS International, added, “I think every hotel within the next five years will have some wellness offering in their rooms. It’s just a matter of who will be last to the table.”

So who is driving this trend? Participants agreed that it is largely the consumer. “Is the customer ready for it?” asked Mark Wuttke, principal, The Wuttke Group. “Do you know who the biggest retailer of organic produce is in the United States today? Walmart. The one behind it? Costco. We want to get on board be-cause it’s already happening.”

Newman, whose company also works in the residential environment, noted, “We’re seeing the wellness movement in that residential com-ponent as well. We see a strong carryover.” Fos-ter added, “People don’t change their behavior when they’re traveling and when you have some-one who is traveling 50, 100, 150 days a year, you have to make it convenient for people to carry on their lifestyle.” Herning agreed, noting, “Savvy guests expect the same amenities they have at their homes. We have had to make changes in that regard. This is yet another one.”

“Customers’ needs will always be the first step,” said Glickman. “Customers are going to inher-ently look for brands that line up to their values, so as we make choices for our brands, we have to think, do those brands line up to the growing number of people that are prioritizing wellness?”

While consumer demand is driving this trend, participants agreed that another important hotel customer base plays a large role—corporations. “We are incredibly unhealthy,” said Foster, quot-ing U.S. statistics that say 36% of the U.S. popu-lation is obese and two-thirds are overweight. “What does that mean? Our healthcare costs are rising. And that is what’s stemming all of this. From the consumer standpoint and the em-ployer side, how much it’s actually costing to pay for healthcare insurance. When it starts hitting people in the wallet and the bottom line, that’s when change and action takes place.”

“Corporations are demanding wellness from employees because it comes down to sick time, productivity, healthcare costs,” said Stowe Shoemaker, dean/William F. Harrah College

of Hotel Administration, Michael D. Rose dis-tinguished chair/Lincy professor, University of Nevada, Las Vegas, adding that wellness will follow sustainability’s lead. “Hotels became sus-tainable because meeting planners wouldn’t go there if they weren’t. If everyone was healthy, we probably wouldn’t have wellness rooms because there’s no incentive.”

Glickman added that this is something the brands see as well. “We look at the wellness be-havioral changes within the companies many of our guests will come from,” he said. “How many Fortune 500 companies now have their own well-ness programs and are encouraging or requiring their employees to eat healthier? Those same companies have a lot of employees that are trav-eling and have to stay in hotels. Doesn’t it make sense that there are hotels that line up with that same philosophy?”

Both Glickman and Shoemaker added that this focus on company culture should extend to hotel companies as well. Shoemaker noted that it’s common for young workers today to change jobs a lot. “They’re going to start choosing those companies that have their same values,” he said. Glickman agreed. “If I want to find somebody who is passionate about wellness and helps sup-port our guests’ wellness, I’ve got to do the right things for those team members,” he said. “That’s going to help retain that employee and make them someone who wants to deliver the service experience of the brand, which brings that full circle, to make that a higher value for the guest.”

While wellness is something consumers want, the participants agreed that there are different levels of education necessary, depending upon the wellness initiative. David McCaslin, presi-dent, Northwood Hospitality Group, said, “Con-sumer awareness of things related to diet is prob-ably relatively high. Consumer awareness of light technology is relatively low, so you have different learning curves.”

“Hotels do a great job of putting things in their hotels, but they do a lousy job of communicating that to the guest,” said Newman, noting that if a hotel is going to have wellness initiatives, it needs to explain those initiatives to the guest. McCaslin pointed out this goes back to the awareness issue. “If you want to offer a vegetarian menu, I would bet 98% of your guests know what that is. If you want to offer a gluten-free option, 85% know what that is. Today, if you said, I’m offering a Vi-tamin C shower, 3% of your guests might know what that is,” he said. “That doesn’t mean it’s not valid, but there is an educational component.”

The participants bandied about some op-tions—adding the information to the in-room compendium, signs within the room, or a short video when the guest turns the TV on or in ki-osks near public spaces that have wellness initia-tives, like meeting spaces. “The messaging topic is a very important one and there is a balance,” said Peter Scialla, partner/COO, Stay Well by Delos/Delos Living, LLC. “You have to walk a line between oversupplying information and littering the room with signs every place versus

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presented by


presented by HB


presented by



by Hotel Business®


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by

Hotel Business®

Hotel Business®

Hotel Business®

Hotel Business®

1 Stefani C. O’Connor, Hotel Business, and Mark Wuttke, The Wuttke Group

2 Ralph Newman, WTS International (left) and Adam Glickman, EVEN Hotels/IHG

3 Adam Glickman, EVEN Hotels/IHG

4 Left to right: Gregg Herning, MGM Grand Hotel & Casino; Andrea Foster, PKF Consulting USA;

Peter Scialla, Stay Well by Delos/Delos Living, LLC; and Homer Williams, Williams & Dame Development

5 Stowe Shoemaker, University of Nevada, Las Vegas

6 Peter Scialla, Stay Well by Delos/Delos Living, LLC

7 Left to right: David McCaslin, Northwood Hospitality Group and Nicole Carlino, Hotel Business

8 Gregg Herning, MGM Grand Hotel & Casino (left) and Ralph Newman, WTS International

9 Left to right: Stefani C. O’Connor, Hotel Business, and Gregg Herning, MGM Grand Hotel & Casino

10 Stowe Shoemaker, University of Nevada, Las Vegas (left) and Homer Willliams, Williams & Dame Development

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LAS VEGAS—Hotel Business’ Wellness Roundtable, held here at the MGM Grand Hotel & Casino, and hosted by Delos Living, LLC, discussed wellness initiatives hotels could incorporate to satisfy con-sumer demand, but it also served as a model for it.

Participants and attendees stayed in the hotel’s Stay Well Room collection, which encompasses the 14th floor of the main tower and is a result of a partnership between the MGM Grand and Delos. This included a private check-in at the Stay Well Lounge. In-room wellness initiatives included a Stay Well Vitamin C-infused shower, which neu-tralizes chlorine; the Stay Well air purifier, which reduces allergens, toxins and pathogens; a water purification system, which reduces disinfectant byproducts, chlorine and pesticides; light therapy, which exposes guests to short periods of blue-shaded lighting to increase energy; circadian dim-mable bedside lighting; black-out shades; an aro-matherapy diffuser; a healthy in-room menu; and WELL Shield, a photo catalytic coating applied to high-touch areas throughout the room and bath-room to break down bacteria, virus and VOCs on bacteria-susceptible surfaces, among others.

The event was also held in the Producer’s Ball-room, which included wellness initiatives such as air purification, biophilic virtual windows, circadian lighting and healthy catering options, among others. The food served included healthy options. Breakfast featured organic options such as buckwheat pancakes, yogurt and fresh fruit, and organic drinks infused with fruits and flow-ers. Lunch options included a variety of salads, chicken lavash, pole-caught tuna, zucchini and mozzarella, or country ham, with sides such as whole organic fruit, baked vegetable chips and house-made granola bars.

—Nicole Carlino

in an appropriate manner, whether it’s your mobile application software or in-room guide. How do you get it to guests in appropriate ways so you don’t bombard them?”

Being nonjudgmental is also key. “We have to in-form people why are we doing what we’re doing, what’s the benefit to you. We have to inspire them to want to participate. And then it’s about nonjudg-mental choice,” said Foster, adding that if guests in a wellness room want to order steak, they can’t be looked down upon. “We need to make sure people can live their lives in a well-rounded way and make that choice, too.” Added Glickman, “The service is really going to bring that to life.”

The conversation turned to talk of cost and ROI. Newman said, “I think the real question is what is the cost if you don’t do it? What’s it going to cost you in occupancy points? Developers ask if you can quantify that, and it’s a very difficult thing to do.” Shoemaker added that the availability of information makes this critical, since guests can easily find another hotel that offers what they want. “That’s what’s going to drive it: it’s the availability of information and know-ing the customers have choices,” he said.

“Everyone talks about the cost,” said Wuttke. “I think we’ve got to ask the question: Why is un-healthy and sickness so cheap? We’re rewarding the wrong behavior. We make it so easy to fall off the rails.”

“At somwe point, somebody has to innovate,” said McCaslin. “And whoever is first will get an advan-tage, the second people will learn and everyone will follow. The danger is that it doesn’t get stigmatized by visionaries who believe, ‘I am going to tell you how to live your life’ because capital is not interested in changing the world; capital is interested in respond-ing to customer behavior.”

“From the investor/developer/owner side, and ven-dor side, we need to ensure that we are turning this into numbers because that’s very important,” said Foster, citing an example of how adding wellness initiatives to a hotel and guestrooms, excluding the spa, can benefit a hotel. “For the purposes of this ex-ample, if we assume a $10 ADR lift for a hotel due to a wellness initiative, for a 200-room hotel assum-ing a reasonable occupancy percentage, a reason-able flow-through of the additional revenue to the bottom line (after deduction of credit card commis-sions, brand fees and FF&E reserve expenses), and

apply a reasonable industry return on investment, the valuation increase to the hotel could be as high as $5M,” she said, noting that this potential valuation increase requires an investment (FF&E, operational expense, and the like) to support it, which has not been factored into the example, and the few hotel examples we’ve seen show such wellness-oriented ADR lift in the $30-40 range.

So how does a hotel make wellness work? “There are three critical things,” said Wuttke. “Authentic-ity, brand alignment and consistency. If we’re going to be doing wellness, it’s the little things we can trip ourselves up on.” Herning highlighted authenticity and noted that years ago, all hotels put signs in the bathroom about reusing towels in an effort to save the environment, while everyone in the industry knew it was a cost-saving measure. “Today, it’s got to be authentic. The consumer knows way more than we think they know,” he said.

“The trend line is there,” said McCaslin. “The is-sue becomes the unknown: The slope of the curve of how consumers will react over the next 10 years, what particular things that they will react to, and the level of capital that will go in to facilitate those opportuni-ties for people to make choices. But they’re all start-ed. It’s beyond a period of ‘it could happen,’ but it hasn’t yet been determined how it will play out. From an investment standpoint, it’s actually a pretty excit-ing time to be involved with it.” Added Newman, “In wellness, we can be a very strong advocate. Wellness is here and the hospitality industry has a real chance to jump on midway and be a proponent of it rather than the tail end.”

“Wellness is such a natural thing for people to want,” said Scialla. “If you provide it, folks are going to want it. If it can be done in a manner that’s cost-effective, but gives folks access in different places and different spaces, it’s almost build it and they will come. That’s what I think will drive the movement: having access to it.” Scialla also added that everyone has to have ac-cess. “Wellness should not just be a luxury,” he said, adding that it’s important to “find implementation possibilities for wellness at every price point.”

Williams concluded, “This thing will create its own energy. It’s going to grow organically and it’ll do it really quickly. This is something that the hotel industry is going to be a leader in. People are work-ing to have a healthier home, but the idea that you can travel and learn and further adapt is a great laboratory, frankly.”

40 HB • May 7, 2014



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David McCaslin, Northwood Hospitality Group and Andrea Foster, PKF Consulting USA

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hotel business - hotel wellness to the bottom line

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