Published: 17 May 2023
Wellness in Hotels: The Potential for Growth in Central and Eastern Europe
In this podcast, Marina Franolic Managing Director Central and Eastern Europe, the bench engages in a conversation with Magdalena Sekutowska, Senior Director - Development Central & Eastern Europe at Hilton on the growing demand for wellness-focused travel and how the hospitality industry is adapting to meet this demand. They discussed the benefits of offering wellness services, the growth of the wellness industry, and the potential for investment in wellness destinations in Central and Eastern Europe. Magdalena highlighted that Hilton has a team of spa and wellness specialists who design and operate their spas, and also they focus on hotel and spa operations that can function as standalone facilities or form part of larger mixed-use complexes.
Transcript
Marina Franolic (00:00:28) - Hello, everyone. Welcome once again to our podcast series. We will be throughout our our podcast series be announcing the events that we're holding in September. It's September 18th - 20th. It's called IDEEA is going to be held this year and it's going to be amazing. So if you haven't registered, please go to the website and do that as soon as possible because we still have the Earlybird rate on today. We have as our guest Mr. Mrs. Magdalena Sekutowska. She she's a senior director of development for the Central Eastern Europe from Hilton. Magdalena, welcome. Hello. It's very nice to be here with you. It's great to. To have you here today with us. So today, our main subject is wellness industry within hospitality.
Magdalena Sekutowska (00:01:23) - A very important, very, uh, growing recently. I have a data here from the Global One assistant saying that they've done a study. It's actually the first ever global analysis on a link between wellness, happiness and health. It seems that there's five main the wellness economy sectors that actually increase human happiness, and that is workplace wellness, real estate, healthy eating and activity.
Marina Franolic (00:01:55) So we will be talking about the wellness industry today. And I'm going to let me ask you a little bit about that and how Hilton is moving on in that in that segment. So traditionally, we know that international hospitality brands were not as involved in the management of medical hotels, wellness hotels. But it seems that recent changes in customer demand actually show that people travel more for health and wellness, and they're looking to have familiar brands in those locations, which means, of course, brands are then looking to to expand in those regions as well. How do you see those changes in the marke?
Magdalena Sekutowska (00:02:55) - Yes. Globally, the wellness economy is expected to see an annual growth rate of almost 10%. And within that, the global wellness tourism sector is expected to grow at the rate of almost 21% for 2020 to 2025. Um, and you know, various recent studies also indicate that hotels with significant wellness offerings generate about 40% more in total revenue per available room on average compared to hotels with no wellness. And in addition to that, properties with extensive wellness operations benefit from 20% higher ADR and generate 48% more in average revenue per room compared to hotels with minor wellness operations. Our Hilton's newly released 2023 Trends report, which is a global study unpacking how travel needs and interests are changing, confirms this trend. It shows that travelers are looking to immerse themselves in local culture and also to prioritize personal wellness. Um. Shields has been a present in wellness destinations such as various types of resorts, also including mineral and thermal spa towns such as Hilton, Doubletree by Hilton and Hampton, by Hilton in Bath, Hampton by Hilton and Stilton and Norwegian.
Magdalena Sekutowska (00:04:37) - We do focus on hotel and spa operations, which can function as standalone facilities or form part of larger mixed use complexes, which also include medical or other recreational facilities such as marinas, Apapa schemes or, you know, medical facilities. Um, but we don't really take care of the medical aspect, right? We have distinct spa brands.
Marina Franolic (00:05:00) Magdalena, you just mentioned a couple of brands that you already have. Um, specifically for one, what hotels Do you have any plans in developing new brands that will be focused solely on this type of, of product?
Uh, we don't have any plans for new brands. We are looking continuously, continually at various development opportunities throughout the region, um, to the develop specific products which would work for this specific destination. Some of them are going to focus on mostly, um, environmental aspect of it and then some an operations. Um, you know, we have a full team of spa and wellness specialists who design and operate our spa's.
Magdalena Sekutowska (00:06:20) - Our wellness team develops, um, concepts and commercial tools to create, um, owner return and support and added this and property experience. So really not focusing on medical aspect on but to identify spa and fitness solutions that will deliver the most innovative ways of dealing with a specific destination area.
Marina Franolic (00:07:10) So you're covering the entire CEE region, which means all the different products? Do you think this is something that will be coming little bit later than in Western Europe, maybe 2 or 3 into 2 to 3 years? What is your sentiment there and where do you see the development in the sea region? And, you know, the wellness and health awareness in the wall has been strong and continues to grow. So, you know. Though. Yes, I see a lot of growth in various destinations throughout the region.
Magdalena Sekutowska (00:07:52) - Um, you know, as the economies of the countries grow, the disposable income in the population in the CEE, countries also increases and so does the wellness economy. There are many then thriving wellness markets in the CEE already and dominated by domestic, local, independent hotels. Um, a perfect case study for this are various towns along the Polish biotech cycles, which have many health spas hotels operating for years, um, but very few internationally branded hotels. Um, the owners are also individuals. Or do you see any funds coming into this market? Um, it's mostly individuals, family run providers. Um, you know, there is quite a few of those underdeveloped destinations. Um, there are, you know, health spa destinations in Poland, Hungary, Czechia, Romania. Um, there are a lot of assets which still need to be turned around. Um, you know, even whole towns with which needs to be redeveloped, frankly. Um, strong brands such as ours can put such locations back on the world map, if you will.
Magdalena Sekutowska (00:09:28) - If someone is looking to go to such a destination, if they see a branded hotel, it will definitely, um, or it would definitely attract attention. Um, so, um, it has a potential for making these destinations more accessible to a wider guest base, you know, encouraging domestic guests, but also motivating international guests to go for examples of such. The locations are baths en route as baths in Budapest Hungary, Karlovy vary in Czechia. Um, thermal thermal and Mineral Springs destinations. Tatra mountains, both on the Slovak and Polish sides, typically see sulphur baths in Georgia clinics as the Cherokee next, you know, and arbres in Poland. So quite a lot to choose from
Magdalena Sekutowska (00:11:12) - Okay, Let's go. And thank you so much, I'm sure. And Well, I know because the program is just being done that will be discussing this topic further on at the in September. I do hope that we will hear about some new signings until September or May. Yet we have some announcement at the event. Thank you so much for the for your time today. It was a pleasure talking to you. And now we'll meet soon in in front. Thank you very much. And I look forward to seeing you in September. Bye bye. Bye bye.