Week 46 - Wellness Industry outgrows 2019, Tourists over locals & The Sahm Rule
Week 46 - Wellness Industry outgrows 2019, Tourists over locals & The Sahm Rule
Amsterdam cancels plan to cut routes, Cambodia kicks out locals to protect heritage sight, NGO starts a hotel
Guest Speaker
Victoria Sardain runs a wellness/hospitality consulting firm and has brought us several good news this week about the industry that is now worth over 5.6 trillion USD. Feel free to reach out and get your business upgraded over here! The full podcast version is available here.
TLDR: Too Long Didn’t Read
In the latest hospitality roundup, A&O Hostels' CEO discusses the chain's post-COVID growth, emphasizing solo traveller trends and affordability strategies 🏨💼. Cambodia's eviction of locals to protect Angkor Wat raises questions about the influence of politics on the travel sector 🇰🇭🗺️. National Geographic extends its cruise partnership ⚓, while Airbnb and Booking.com commit to sharing data with the UK government 🇬🇧🏠💻. Viva con Agua's NGO-founded hotel in Hamburg contributes profits to water accessibility 🏨💧. The wellness economy rebounds to $5.6 trillion 💲💆♀️, and Lanserhof plans a health resort in Marbella 🏨🌴. Research underscores the health impact of loneliness 📊😞, and the Sahm Rule suggests a potential US recession 🇺🇸📉. A paper explores the link between service quality, satisfaction, and loyalty in the hospitality industry 📚🏨. Additionally, a handbook on the hospitality concept 📖🏨 and insights into social media algorithms for hospitality marketing are highlighted 📱🌐.
0. News snippets
Not important enough to expand on, but it is worth hearing about
Indigo Hotel chain is now offering a borrowing program to locals, specifically essentials. The goal is to be the world’s Neighborhood hotel. | You can now book cruises on Booking.com, as a result of a partnership with “World Travel Holdings” | China reaches peak development pipeline YoY
0.5 Follow up
Where we follow up on news from previous weeks
Amsterdam Airport is not limiting routes after all!
Amsterdam Airport has scrapped the idea of capping flight routes. After several airlines have started a lawsuit? Nope, after the US authorities got involved and threatened to limit KLM (Holland’s own Airline) from flying to several US airports. Who knew that fighting local politics is as easy as calling up the sheriff?
1. Main Hospitality News
Core news related to the industry
CEO of a hostel chain explains their COVID survival journey
The CEO and founder of A&O Hostels has given an interview discussing how the chain has survived COVID and is now growing again. A sector of hospitality that by far was impacted the most, due to proximity to other people in hostels. Some of the highlights are: Solo traveller trends are rising again. How low-price campaigns and being sustainably low price have proven to make A&O hostels stand out as a type of Ibis of hostel chains. Finally, the CEO calls for more affordable pricing in 2024 due to inflation creating a more sensitive target group of travellers. Check out the full interview here.
Protecting heritage sights from tourists locals
While some countries try to decrease their tourism load and protect locals who show frustration by voting a certain way, others ex pulse 10 thousand locals to protect a local tourism heritage sight. Cambodia falls into the latter category. Angor-Wat temple is supposedly being protected from the locals who are putting the historical temple in danger. Surely not the 2.2 million tourist visitors. It shows that the travel sector is what local politics decides for it to be and not vice versa.
National Geographic Cruises
If you did not know, National Geographic partnered with cruise operator Lindblad. Imagine reading the National Geographic magazine and taking a cruise to places you see in the articles. The partnership has now expanded to another 17 years and is now also offered in Asia and Europe. As part of “Expanding” the offering, a more rich kids program will also be offered on the ships.
Booking & Airbnb start sharing Numbers
Airbnb, Booking.com, and Expedia will share quarterly aggregated, anonymized data with the UK's Office for National Statistics by spring 2024. The data focuses on guest and night bookings, aiming to assist regulators in forming effective policies for short-term rentals and helping authorities understand local economies and housing issues. It is seen as a crucial step for transparency, and Airbnb already shares local data to support communities and tourism. Article on Skift.
NGO starts a hotel
Some hospitality businesses can be started with the very idea in mind to do charity. Like the Villa Viva hostel/hotel in Hamburg. Built by the Viva con Agua, an NGO with the goal of providing people with drinkable water. Sponsored by 19 private investors who only have the right to sell again in 15 years. The main goal here is obviously to take the profits from the business and funnel them back to the charity. Not a new thing at all, yet a very cool way to run businesses.
The Wellness Economy has reached a value of $5.6 trillion
The Global Wellness Institute reports that the wellness economy has rebounded, growing 27% since 2020 to reach a record $5.6 trillion, surpassing the pre-pandemic high of $4.9 trillion in 2019. The wellness sectors now exceed their 2019 market sizes, with notable growth in wellness real estate, public health, prevention, personalized medicine, mental wellness, healthy eating, nutrition, and weight loss, and physical activity. The wellness economy is forecasted to continue its robust growth, with an anticipated 8.6% annual increase, reaching $8.5 trillion by 2027, representing 6.6% of global GDP. More here.
Lanserhof opens location in Marbella
Austrian wellness operator Lanserhof plans to enter the Spanish market in 2026, opening its first health resort on the estate of Finca Cortesin in Marbella, offering 70 suites and wellness facilities with a €100M investment from AltamarCAM and Inbest-GPF. This move reflects the growing trend of Europeans prioritizing health-focused holidays, driven by concerns about physical inactivity, poor nutrition, burnout, and Long Covid, contributing to the expanding wellness market. More here.
Loneliness impacts Health
Active social engagement is associated with a better quality of life and a lower risk of premature death, according to research highlighting the negative impact of loneliness and social isolation on health. The study, focusing on data from more than 450,000 participants in the U.K. Biobank database, found that various factors, including frequent loneliness, inability to confide in a close companion, living alone, infrequent visits with friends and family, and lack of weekly group activities, were linked to an increased risk of death. Loneliness and social isolation are identified as contributing to health problems such as anxiety, heart disease, and dementia, emphasizing the importance of maintaining social connections for overall well-being and longevity. More in the WSJ.
2. Externalities
Econimics, finance, geopolitics. All have an impact on the hospitality sector.
How do we know if the economy is in recession?
We have tried to show in this newsletter for the past few months that forecasting economic changes is virtually impossible. Yet apparently there is a “Rule” in US statistics, that if triggered indicates a recession. More precisely the Sahm Rule. A very simple indicator that shows if unemployment suddenly changes by more than 0.5% over a period of 12 months, means the US economy is in crisis. This apparently worked flawlessly since the 1960s. The inventor of the rule herself wasn’t trying to predict anything, but rather showcase to the government that a large portion of the population would require additional financial assistance. A sort of red flag. Indeed if you look at the past crisis, the Sahm Rule, really kicks into place right about the time when everybody already knows. Is that the case now? Not quite only a few % points missing, but it's on the way there.
3. Academia
Scientific papers related to the topics above. For those who want to know for sure ;)
Relationship between service quality, satisfaction & loyalty
A great new paper came out looking into customer service and how it impacts customer loyalty. Aside from creating a breakdown of existing papers into specific topics like trust, brand image & perceived value (a guide within itself), the paper builds an empirical model on how to show the connection between satisfaction and loyalty (a model that you can copy as well). As well as, showcasing how trust & satisfaction are directly impacted by the quality of the service. An obvious statement yet often questioned at its core in several businesses.
4. Readables
Books, podcasts & the big stuff.
How to open up hotels?
An “extensive” book about the hospitality concept and how to open up your own hotel has come out. Technically, it is a freebie created to attract customers to a certain consulting agency. If you however, are actually interested in bias-free literature about hotel openings, design, DD & finance of the whole process we recommend checking out Hospitality Development (in German) or this more architectural take on planning & designing Resorts.
5. Tips & Tricks Tools & SaaS
Any new software you can use? Industry tricks you missed?
Social Media Algorithms Explained!
How does the social media algorithm work? It is like asking the question: “What is the meaning of life?”. Everybody has a different answer. Except, today we found a pretty damn good take on explaining various social media platforms, especially from the perspective of a hospitality marketing professional. The article goes into detail about most platforms and their own unique quarks. Check out the full post here.
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