Before the Covid-19 pandemic wreaked havoc on global economies and forced the closure of all non-essential businesses, including casinos, the domestic U.S. gaming industry could best be described as in a state of maturity.
Commercial gross gaming revenues increased 3.5 percent in 2018 to $41.7 billion, while tribal revenues grew 4 percent to $33.7 billion during the National Indian Gaming Commission’s 2018 fiscal year.
While the domestic gaming industry will likely be at the start of a recovery phase as this article is published, the longer-term trend for U.S. brick-and-mortar gaming is one of healthy, yet minimal growth.
Sure, specific states may legalize land-based gaming in an effort to stimulate economies, creating pockets of regional growth. And as the rollout of sports betting continues, incremental revenue will be created. However, once the recovery period is over and the incremental opportunities from sports betting are captured, operators will once again be faced with the seemingly perpetual question of how to induce new guests and gamers to their existing resorts, diversifying their customer base and generating increases in revenue in the process.
Often, operators turn to expansions including additional amenities to keep current patrons loyal and entice new customers. Spas are a common amenity for gaming resorts with hotels, but virtually all spa concepts within gaming resorts stick to conventional spa treatments and services such as massages, facials and pedicures.
Despite minimal conceptual evolution for spas within gaming resorts, distinctive spa-resort concepts have emerged as sought-after destinations for travelers, both domestically and abroad. The concepts are centered around holistic wellness—promoting health and well-being through physical, psychological and spiritual activities.
These holistic wellness resort concepts go beyond conventional spa amenities and corresponding services, offering treatments and activities including dietary cleanses, yoga and meditation retreats or even shaman sessions, among others. Before dismissing these concepts as too “new age” for a gaming resort, consider the size and growth of this type of travel. From 2015 to 2017, wellness tourism increased by 6.6 percent annually to nearly $640 billion, as reported by the Global Wellness Institute (GWI). This growth is twice that of overall global tourism revenues, which increased just 3.2 percent annually over the same time period.
On top of this, there’s a precedent for holistic wellness-leaning concepts operating alongside casinos in single resorts. Canyon Ranch Las Vegas has operated in the Venetian since 1999, while Nemacolin Woodlands Resort offers a “Holistic Healing Center” as well as its Lady Luck Casino. The limited existence of these concepts within current gaming operations, paired with the strong growth of wellness tourism, begs the question: do holistic wellness concepts fit more broadly into gaming resorts?
The Numbers Behind the Industry
As highlighted at left, wellness tourism revenues have experienced strong increases in recent years. This growth is forecasted to accelerate in coming years, with GWI forecasting annual growth averaging 7.5 percent from 2017 to 2022, reaching $919.4 billion.
The table at left details the historical growth and forecast by region. North America represents the largest share of wellness expenditures, accounting for 37.8 percent of total 2017 expenditures. Notable fast-growing regions of origin include the Asia Pacific and Middle East-North Africa.
Unsurprisingly, wellness travelers spend more per trip versus typical or conventional travelers. As summarized in the table at left, spend per international trip averaged 41.8 percent more for U.S. wellness travelers versus conventional travelers. The premium for domestic trips is even greater, at 59.1 percent higher for wellness travelers compared to conventional travelers.
As GWI notes, there’s a misconception that wellness travelers are a small, elite and wealthy group who visit holistic wellness resorts. The organization identifies two types of wellness travelers: primary travelers whose trip/destination choice is primarily motivated by wellness; and secondary travelers, who participate in wellness experiences on trips with other primary purposes such as leisure or business. The latter form of travelers accounts for 89 percent of all wellness trips and 86 percent of expenditures.
Types of Holistic Wellness Resorts in Gaming
Motivation behind wellness travel can be categorized into physical, mental, spiritual, emotional, environmental and social drivers. Holistic wellness resorts typically cater to one, some or all of these motivators.
Travelers motived by physical aspirations tend to seek locations specializing in health, spa and beauty, healthy eating and fitness. These travelers seek amenities and locations such as fitness centers, natural and organic restaurants, health food stores, wellness centers, wellness cruises, health resorts and sanatoria, spas, salons and bath and springs.
Wellness travelers looking for mental and spiritual experiences are driven by mind-body and spiritual connections, and are drawn to yoga, spiritual and martial art retreats.
Emotional wellness travelers seeking personal growth often look for lifestyle and wellness retreats.
Wellness travelers driven by the environment seek eco- and adventure travel within wildlife sanctuaries and preserves.
Social wellness travelers can fall into all these categories and are primarily driven by group activities.
As pointed out previously, there are at least two holistic wellness concepts currently operating alongside domestic casinos—Canyon Ranch Las Vegas at the Venetian and the Holistic Healing Center at Nemacolin Woodlands Resort in Farmington, Pennsylvania. While the coexistence of these concepts with casinos is noteworthy, there are a few key caveats to note. To be fair, Canyon Ranch Las Vegas is somewhat of a watered-down version of its other holistic wellness locations. Even on the company’s website, its Las Vegas location is described as a Spa and Fitness location while its other land-based locations are described as either Wellness Resorts or Wellness Retreats. The Holistic Healing Center at Nemacolin certainly qualifies as a true holistic wellness concept; however, the Lady Luck Casino at the property is positioned as more of an amenity versus the primary visitation driver for the resort. In fiscal year 2019, the casino generated just over $30 million in GGR. Still, these examples provide precedence for the intersection of the gaming industry and holistic wellness.
Broader Gaming Industry Opportunity?
To dig deeper into whether holistic wellness concepts provide a broader opportunity for the gaming industry, I went to an expert, Peaches McCahill, president of the McCahill Group (www.mccahillgroup.com), a health, fitness and beauty consulting practice. She has more than 30 years of experience working with various casino and hospitality developments throughout the country on the design, branding and management of spa and fitness concepts.
McCahill believes there’s an opportunity for holistic wellness within resorts where gaming has a presence. In some ways, she sees this as a natural evolution. “In the early days of spa concepts, body work like massage was almost thought of as taboo,” McCahill says. “Now, they’re commonplace.”
Spa services will continue to evolve just as operators’ thinking around spas has evolved. “Spas within casino resorts were previously considered as a ‘comp amenity’ for players,” McCahill explains. “Now, the expectation is that the spa is a profit center.”
Despite the evolution of spas in general, McCahill doesn’t recommend that every gaming resort introduce holistic wellness concepts as amenities. She notes that property location, quality rating and current brand positioning are all important factors affecting the success of a holistic wellness amenity at a gaming resort. The most important factor, however, is the current customer base.
“You need to have a thorough understanding of who your customer is,” says McCahill. “Is this (holistic wellness) something they’re interested in?”
Generally, McCahill believes four-diamond properties, or those of commensurate quality with a more sophisticated customer base, are best suited for holistic wellness amenities. That doesn’t mean more mainstream or mass-market casino resorts couldn’t benefit from a holistic wellness concept, but again, consumer preferences and tastes are key. “You could build something with the right audience,” says McCahill.
Developments with more natural, scenic locations such as some of the gaming resorts in Arizona and California have a more seamless connection to holistic wellness and could be some of the best candidates for these concepts. Recognizing that holistic healing and wellness are integral parts of many Native American cultures and history, tribal casino resorts can connect holistic wellness concepts to their heritage—further strengthening property brands.
As for the actual patrons of holistic wellness concepts at gaming resorts, McCahill believes that many will be gaming-adjacent. “Spouses of gamers are a key customer group,” she says.
Through retreats, holistic wellness concepts provide the opportunity to keep couples and other customer segments on property longer. Traditional spa treatments and services typically keep a customer in the spa for a couple of hours, while package spa trips last around four hours, says McCahill. This time includes the use of amenities like steam rooms, saunas and the like. This compares to holistic wellness retreats that can be more than four hours per day for multiple days. Additionally, retreat packages could be an added midweek demand channel, bringing new patrons on property and filling low-occupancy periods.
Ignoring gamers with a holistic wellness concept could be a missed opportunity. Including holistic wellness services and activities in comp packages could be a way to let your customers know you care about their well-being and increase loyalty.
“Morning meditations could be messaged as helping players (mentally) on the gaming floor,” says McCahill.
While wellness travelers spend more than other travelers, a holistic wellness amenity may not be the best expansion opportunity, financially, for many resorts. In doing highest and best use studies for our clients, a parking garage—something that could not be further from a holistic wellness amenity—often provides the highest ROI potential.
For gaming resorts with the right location, customer base and brand, a holistic wellness concept may create a unique market positioning and catalyze incremental revenue and demand—something that’s welcomed by operators, whether they’re in recovery efforts or not.
Will holistic wellness flow into the mainstream and become something the broader consumer seeks? Consumer trends indicate an ongoing shift towards health and personal well-being, but it will undoubtedly be some time before holistic wellness amenities are commonplace in gaming and hospitality resorts—if ever.
One thing is certain: the current global turmoil, which is inextricably linked to an illness, is causing many more people to prioritize their health and well-being. McCahill jokes, “My colleague told me when we come out of this (crisis), people are going to fall in one of three categories… hunk, chunk or drunk.”
If there are more “hunks” and health and wellness trends accelerate in the aftermath of the pandemic, holistic wellness concepts may be commonplace sooner than we think.