August 13, 2012
by David J. Sangree, MAI, CPA, ISHC and Laurel A. Keller, published by Hotel News Now
Summary: Though numerous destination spas periodically offer weight loss retreats and health & fitness programs, few resorts cater exclusively to obese guests by providing year-round, high-intensity weight loss programs. Despite recording RevPAR well above the national average, the U.S. weight loss resort market segment is surprisingly undersupplied. Currently, the roughly 70 million obese adults in America have only five true weight loss resorts with 360 guest rooms to choose from. This disproportion bodes well for the future of the weight loss resort industry, which currently offers only one brand: Biggest Loser Resort.
Supply of Destination Spas offering Weight Loss Programs
Two types of resorts cater specifically to guests interested in weight loss: destination spas and weight loss resorts. Destination spas are lodging facilities primarily designed to encourage healthy habits in their guests. Typically, over a seven-day stay, these facilities provide a comprehensive program that includes spa services, physical fitness activities, wellness education, healthy cuisine and special interest programming. Destination spas host the majority of the weight loss programs offered in the U.S. These spas offer the latest in food, fitness, and spa services, and typically have a low guest-to-staff ratio. Many of these spas also offer meditation, visualization, yoga, tai chi, qigong, reiki, and other spiritual relaxation options. Nutritious, low-calorie meals and fitness classes are available, but the guests choose how much to eat and in which classes they wish to participate. Because each guest determines their level of participation, the weight loss programs offered at destination spas lack the level of camaraderie experienced at more structured weight loss resorts. The following table lists destination spas in the United States that offer weight loss programs. Because nearly all weight loss programs are sold as American plan packages, we have shown the average weekly published price inclusive of three daily meals, fitness programs, and education. We have also shown the equivalent daily price.
With one exception, all of the destination spas listed are independent properties. Canyon Ranch, a well-known and established resort brand that focuses on health and wellness, is the only multiple location destination spa brand. Canyon Ranch operates three U.S. resorts: Lenox, Massachusetts; Tucson, Arizona; and Miami Beach, Florida. Additionally, Canyon Ranch operates several SpaClub locations with day spa facilities, fitness classes, and workout facilities. These are located at the Venetian and The Palazzo hotels in Las Vegas and on various cruise ships.
Supply of Weight Loss Resorts
Modern weight loss resorts evolved from the 1950s-era camps that were commonly referred to as “fat farms.” Geared toward wealthy women, these grueling programs combined extremely low calorie diets and excessive vigorous exercise to produce rapid weight loss. Instead of temporary fast results, today’s resorts are designed to provide long-term nutrition and lifestyle tools. Programs range from a few days to more than eight weeks, with one to three week stays being the norm. Although guests experience some weight loss during their stay, the primary goal at most establishments is long-term fitness. Programs at these resorts not only focus on weight loss but also on changing behavior to ensure that sustained weight loss occurs after guests return home. Some guests complain that their lack of willpower prevents them from following programs that allow them to choose their level of participation, such as those offered at many destination spas. In such cases, the highly structured programs at weight loss resorts are preferred due to their strict regimentation and the camaraderie of fellow participants keeping them on track. The following table lists weight loss resorts in the United States. We have shown the average weekly published price inclusive of three daily meals, fitness programs, and education. We have also shown the equivalent daily price.
Hilton Head Health (H3) prides itself on delivering an exceptional experience in fitness, nutrition and S.E.L.F. (Stress Management, Empowerment, Longevity, Fulfillment) through personal and interactive sessions designed for individuals ready to embrace a lifestyle change. Program features include health assessment, daily intense exercise, three healthy gourmet meals and snacks daily, nutritional classes, and cooking demonstrations. This 35-year-old resort was featured on A&E’s weight loss based reality television documentary, Heavy. In addition to weekly stays, H3 offers an “Extended & Intensive” 26-week program designed for those individuals looking for a structured, long-term program to support sustainable weight loss and weight management. With over 60 individualized sessions, this program starts at $43,700.
Green Mountain Resort at Fox Run is located on 26 acres overlooking Green Mountain in Ludlow, Vermont. This resort caters exclusively to adult women and has been called “the most experienced educationally based weight loss program for women in the country” by Prevention Magazine. Pioneers of the non-diet movement, Green Mountain’s credentialed, multi-disciplinary staff teaches intuitive eating and healthy living strategies that have been developed over 38 years. The resort also offers specially focused programs for adult-onset diabetes, type II diabetes, PCOS, metabolic syndrome, binge eating, and more. In addition to daily intense exercise, the weeklong programs at Green Mountain include cooking classes, nutrition classes, and lifestyle counseling. Weight management programs are offered in one-, two-, three-, and four-week sessions year round. The resort benefits from its excellent reputation, upscale facility, well-trained staff, and idyllic location.
Biggest Loser Resorts is the only multi-destination weight loss resort brand in the world. The Biggest Loser is a reality television show that first started in the U.S. in 2004 on NBC. The show centers on overweight contestants attempting to lose the highest percentage of weight (or most weight), winning a cash prize and becoming the “Biggest Loser.”
Founded on a four-point philosophy of fitness, nutrition, education and relaxation, guests of the Biggest Loser Resorts enjoy a nutritionally balanced, boot camp-style experience. The resorts offer a unique blend of education, exercise, and camaraderie. Because these resorts recognize that the health and wellness of corporate employees leads to greater efficiency and optimal performance in the workplace, Biggest Loser caters to companies searching for ways to reduce weight-related health care costs by offering packages, programs and team-building retreats intended to boost morale and encourage healthier, happier and more productive employees.
Established in Ivins, Utah, in October 2009, Biggest Loser Resort opened its second location in Malibu, California, in September 2010 and its third location in Java Center, New York, in May of 2012. We understand the company is considering additional locations.
Location of Weight Loss Resorts
According to Centers for Disease Control and Prevention (CDC), nearly 30% of U.S. adults are currently obese, which equals approximately 70 million individuals. By state, obesity rates range from 21% in Colorado to 34% in Mississippi. No state has a prevalence of obesity less than 21%. Curiously, the states with the highest obesity rates (Alabama, West Virginia, and Mississippi) do not offer any weight loss resorts. Weight loss resorts are instead positioned in some of America’s least obese locales (California, Utah, and the mountains of Vermont), which are traditional resort locations. Weight loss resort operators report that they accommodate guests from throughout the U.S. and Canada. According to H&LA’s research, most guests choose to drive to these resorts because they are either uncomfortable flying or do not care to purchase two airline seats (if they are of exceptional size). Judging by the location of existing weight loss resorts, many guests are driving hundreds of miles for the opportunity to participate in their programs.
Demand for Weight Loss Resorts
All five existing weight loss resorts are privately operated, and none publish specific usage or revenue figures. H&LA’s research indicates that guests need to make reservations approximately one month in advance at the Biggest Loser Resorts due to strong demand. All of the resorts impose a seven night minimum length of stay, which contributes to average occupancy levels well above U.S. national averages. Some program participants come for just one week, some come for a month or more, and still others book one week at a time up to four times per year (in an effort to stay motivated). Averaging just 52 guest rooms, the relatively small size of the existing resorts also contributes to their high occupancy levels.
Average rates at these resorts – which include three daily meals, supervised fitness activities and educational programs – range from $2,495 to $2,780 per week, or $356 to $397 per day.
Conclusion
Our nation is attempting to quell its current obesity epidemic, which is evidenced in the increased supply of health clubs, the appearance of more healthy options on restaurant menus and grocery store shelves, and the popularity of weight loss-based reality television shows such as A&E’s Heavy and NBC’s Biggest Loser. Perhaps because they are unaware of the untapped demand, resort developers have been slow to enter the weight loss resort market. Meanwhile, the few existing weight loss resorts continue to benefit from the supply imbalance, achieving RevPAR well above an average U.S. resort.
Authors
David J. Sangree, MAI, CPA, ISHC is President of Hotel & Leisure Advisors, a national hospitality consulting firm. Mr. Sangree’s expertise is in the appraisal and analysis of hotels, resorts, indoor waterpark resorts, waterparks, amusement parks, conference centers, ski resorts, and golf courses. He has performed studies on more than 1,000 existing and proposed hotels in more than 46 states in all price ranges including economy, full-service, extended-stay, and luxury hotels and resorts including indoor waterpark resorts. He has been an active appraiser/consultant since 1987 and also has 10 years of work experience in the hotel/restaurant industry, including management positions with four Westin Hotel properties. He can be reached via telephone at 216-228-7000 ext. 20 or via e-mail at dsangree@hladvisors.com.
Laurel A. Keller is Director of Consulting & Appraisal Services with Hotel & Leisure Advisors. Ms. Keller has been a hospitality consultant and appraiser since 2001, and has completed over 210 assignments in 32 states. She has appraised individual assets ranging in value from less than $1,000,000 to well over $100,000,000. Ms. Keller’s expertise is in the appraisal and analysis of hotels, resorts, indoor and outdoor waterparks, amusement parks, ski resorts, casinos, and golf courses. She has held management positions with a variety of hotels and country clubs in the Midwest. She received a Bachelor of Science degree in Hospitality Management from Purdue University, and is a State Certified General Real Estate Appraiser in Ohio. She can be reached via telephone at 216-228-7000 ext. 22, or via e-mail at lkeller@hladvisors.com.
This article was originally published on Hotel News Now.
