How Wellness-Focused Resorts Can Expand Beyond Asia

MIAMI—Top-tier wellness resorts in Asia are looking at expansion, with goals to bring similar experiences to destinations in Mexico, the Caribbean and Costa Rica.

Andrew Cohan, MAI, managing director of Horwath HTL Miami, has been observing the market and has seen the challenges for North American global brands to proliferate. He poses the question: Can individual Asian resorts with fewer resources be successful in serving North American and European travelers close to home?

“Some are simply attempting to grow from regional, family run businesses to become globally recognized brands with global distribution,” said Andrew Cohan, MAI, managing director of Horwath HTL Miami. “Six Senses, Banyan Tree and even Aman can be included in this category.  I say ‘even Aman’ because while the brand is known as an ultra-luxury resort and is rarely categorized as a wellness resort, a large part of wellness is slowing down, appreciating and enriching family relationships and getting in touch with the simple act of discovery—which can be difficult for people who are in frequent contact with the latest and greatest of everything.”

Cohan explained that some Asian brands may benefit from proximity.

“Others, such as Kamalya, NIHI Sumba and Song Saa, which are single-property brands enjoy significant patronage from North America and could most likely benefit from being located within a four- to eight-hour travel distance from this important source market rather than a 30-hour trek away,” he said. “As the trend in North America is toward more frequent but shorter leisure trips, two or three visits of four days each can become more likely for a resort to achieve with a patron than one 10-day trip that yields eight nights at the resort, two of which are affected by jet lag.”

With varied coastal and mountain destinations, and climates ranging from desert to rain forest, Mexico is a natural destination for many types of luxury resort properties.

“Mexico is the number six country in the world in receiving international visitors, having hosted nearly 40 million foreign residents in 2017,” he said. “In addition, favorable labor costs, excellent infrastructure and a large base of well-trained service personnel make Mexico a desirable country for resort development compared with many destinations in the American tropics.”

According to Cohan, expansion appears to be a tricky process for wellness resorts, wherever they are based.

“First, the mix in a wellness resort of mind-, body- and spirit-focused programming can vary greatly, usually based on the vision or the past experience of the founder,” he said. “The developers of wellness resorts typically have a very personal impact on the programming, service delivery style, and atmosphere of the resort. Many devoted patrons of Canyon Ranch for example, felt as well that they had a connection with the founders Mel and Enid Zuckerman.  Though they retired several years ago, their presence is still felt through the folklore and story of the company’s history, which began with Mel’s ‘ah-hah’ experience.”

He added, “Equity funds and hoteliers can be important components of scalability and expansion for wellness brands, but the subtlety of the founders’ imprint on the resort can be diluted in the process. I can see for example, that Equinox—which has a strong but less personal brand and reputation—might have an easier time expanding in the lodging, resort, and branded residence markets than would many of the top destination spas of the world.”

So, what must Asian resort brands do to gain a foothold in areas beyond Asia? “I think a critical element of any expansion strategy is identifying which attributes must be consistent throughout the brand and which can be flexible to local culture and economics,” he said. “For example, the Park Hyatt in Buenos Aires is an expanded family mansion from the 1920s, while the Park Hyatt in Beijing has a lobby on the 63rd floor. However, there is a commonality in the brand that makes me anxious to experience the newer Park Hyatt in St. Kitts.”