The Wellness Real Estate Market Is Outpacing Wellness Tourism
As the wellness industry tops more than $6 trillion, savvy companies are tapping into its hotel and real estate possibilities
by Boyd Farrow
September 3, 2024
When Gwyneth Paltrow launches an affordable Goop line for Target and Amazon, you know the wellness trend has truly entered the mainstream. Indeed, according to the non-profit Global Wellness Institute (GWI), the wellness economy is worth $6.3 trillion globally and is set to hit $8.5 trillion by 2027—reflecting an aging population, a rapid shift in consumer values, and, quite possibly, a world without satire (goat yoga, anyone?).
Meanwhile, the wellness real estate market—a category too small for GWI to even benchmark in 2018—is set to be worth more than half a trillion dollars this year and is rising 17.4 percent annually, even beating wellness tourism, which is rising 16.6 percent. All this suggests that by the end of the decade, not only will we all be living in Paltrow’s world, but we may actually be living in one of her properties.
Or maybe not. So many other businesses are now launching or pivoting into the lucrative wellness space that there is hardly an aspect of our lives too mundane to merit a holistic approach, no purchase too trivial to be usurped by a more mindful alternative. Here, a look at three of the most innovative companies committed to improving our well-being—and becoming global brands in the process.
Taking the Plunge
Americans could soon spend their winters relaxing in balmy climes in Washington and New York, instead of heading to Waikiki and Negril. As part of a billion-dollar global expansion spree, Therme Group—an Austrian company that operates well-being resorts in Europe—plans to open several supersized, year-round destinations in the U.S. that would blend thermal bathing and family-friendly water-based activities with statement architecture and immersive art. Fittingly, the person tapped to spearhead such an ambitious and unconventional venture is Robert Hammond, the man behind the High Line—the once derelict elevated railway in Manhattan that became a park in the sky, inspiring many other innovative urban reclamation projects worldwide.
The most important thing to note, Hammond insists, is that the wellness resorts are nothing like day spas, where visitors are treated to some dimly lit pampering with a lot of whispering. “Our destinations will be fun, accessible for everyone, and they’ll be family-oriented,” he explains. “We’re creating a whole new market—a kind of wellness Disneyland.”
Each wellness resort will have an assortment of indoor and outdoor pools—mineral baths for adults, waterslides and wave machines for kids—botanical gardens, restaurants and bars, and a rich program of cultural events. There will also be parklands, which could include picnic areas, sculpture parks, cycling trails, even urban beaches. Each location, Hammond notes, will be influenced by ecological, economic and cultural conditions.
“Urban planners are beginning to realize that cities need far better wellness infrastructure,” he explains. “In a way, we’re giving a modern makeover to the ancient Roman baths, which were designed for relaxation and community-building.”
In a further nod to the central role the bathhouse played in Roman society two and a half thousand years ago, Therme plans to integrate cutting-edge design and technologies into each wellness destination. “The aesthetics, lighting, materials, air quality are really important,” says Hammond. “We’re not talking about glass domes covering pools that have a strong whiff of chlorine.”
Ground is likely to be broken first in Ontario, Canada. They are also looking at Washington, D.C., where Therme and the enthusiastic D.C. mayor, Muriel Bowser, hope a suitable site will be identified. This would create about 7,200 construction jobs over two years and up to 800 permanent jobs, and haul in $1.1 billion in tax revenue over 25 years.
Therme is also exploring urban settings throughout the country, including cities like New York, Dallas and Los Angeles. Ideally, says Hammond, the company will be in five North American cities within 10 years.
In line with the group philosophy that well-being should be accessible for all, the business model is predicated on each city serving between one and a half and two million people. Hammond believes adults will spend approximately $45 to $60 for a base ticket. Around a third of each resort would be a family zone, with daytime tickets available. Evening sessions could involve live DJs or audiovisual art events, which could be experienced in botanical gardens or while floating in saltwater pools.
Although Therme’s European resorts—it has four in Germany and one in Romania—were built on the region’s long traditions of thermal and mineral bathing, Hammond believes the brand’s accessible wellness facilities would thrive almost anywhere in America. “Personal well-being is already shifting from luxury to the mainstream,” he says. “And in many areas of health, the focus is moving away from treatments to preventive measures, in particular the benefits of social activities.”
The other big societal shift, of course, is due to climate change, which is already starting to have an impact on when and where people vacation and how they spend their leisure time in general. While it is clearly indelicate to mention how one’s business could prosper thanks to an existential threat to humanity, Hammond acknowledges the appeal of being able to take a dip in lush climate-controlled surroundings in New York in January or Dallas in July. “Let’s just say that at every one of our destinations, you can relax under a palm tree 365 days a year,” he says.
Deep Impact
As countless businesses join the great wellness gold rush, one Manhattan start-up is covering all the bases. The Well bills itself as a one-stop shop for every flavor of Eastern and Western healing. In addition to spa facilities and an organic restaurant, the company’s 13,000-square-foot retreat close to Union Square boasts a lengthy menu of both ancient and contemporary treatments—from acupuncture to IV vitamin cocktails—and a mix of well-being practitioners, fitness trainers and health coaches promising personalized care for mind, body and spirit.
The company itself is a mashup of zeitgeisty mysticism, mainstream medical procedures and savvy marketing. Co-founded by Rebecca Parekh (previously COO at Deepak Chopra’s Radical Wellbeing and a former director at Deutsche Bank Securities), Kane Sarhan (a former Starwood hotel branding guru) and Sarrah Hallock (a marketer who worked on campaigns for Vitaminwater, Bai and Wtrmln Wtr), The Well has ambitions that far exceed New York.
“Every day more people are integrating well-being into their lives, whether through functional medicines, mindfulness or physical therapy,” says Hallock, who serves as the company’s COO. “We don’t believe in a one-size-fits-all approach to wellness. Instead, we look at every aspect of an individual’s health—physical, mental and spiritual—and create customized plans for them.”
This approach also inoculates the company from becoming a hostage to fashionable trends. “Wellness isn’t going away, but we will have to see what resonates and what fizzles out,” Hallock says. “All start-ups adapt their business models as they evolve, but that doesn’t change our central objective, which is to change how people think about their health.”
Hallock became an advocate for a holistic approach after doctors failed to spot that she had an autoimmune condition. Inspired by the functional medicine doctor who eventually recognized the disorder, she opened her own health-coaching practice before embarking on this bigger journey with her equally well-connected fellow travelers.
The Well first launched in 2019 as a membership-based club but pivoted after the pandemic to focus on wider accessibility, encouraging walk-ins for classes and treatments. Much of the demand came from men, who now account for about 40 percent of The Well’s clientele.
Fittingly, the company is taking a holistic approach to its own growth. In its first co-branding venture with Auberge Resorts, the hospitality group headquartered in Mill Valley, California, it has opened wellness centers at three hotels, in Connecticut, Mexico and Costa Rica.
According to Hallock, 12 other wellness centers are in the pipeline, with the first in Europe likely to be in Geneva. “The number of companies in different sectors that have expressed interest in teaming up demonstrates just how widely this business is expanding,” she says.
The Well is also entering what could potentially be an even more lucrative market: real estate, expected to be the wellness industry’s biggest driver of growth over the next three years. The company’s first such venture, The Well Bay Harbor Islands near Miami, is being presented as “the first of its kind—a place where you can live and play in complete wellness.” According to its promotional materials, The Well Bay Harbor Islands is a compound that will contain 66 condominiums, more than 93,000 square feet of office space, and 17,000 square feet dedicated to “an integrated wellness experience” that will involve health, fitness, nutrition and a “highly curated food and beverage offering.”
Unsurprisingly, in The Well’s quest to grow its community worldwide, lines of branded products are likely to appear at some point, with everything up for consideration. However, there are no firm plans to challenge the likes of Goop or Lululemon just yet. “We’re in no rush to do everything at once,” says Hallock. “We plan on being around for a long time.”
Fit for Purpose
Don’t get Chris Norton started on throw pillows. Or any other froufrou stuff regularly scooped up off the floors of fancy guest rooms. The minimalist—and borderline germaphobe—CEO of Equinox Hotels shudders at the thought.
The Equinox Hotel New York has 212 chambers designed in a palette of almond milk and dark chocolate. All have high-tech soundproofing, black-out drapes, circadian-adjusted lighting and warm wooden floors for yoga mats. In these cocoons, air is filtered, RoomBars contain seawater supplements, mattresses are handmade from all-natural fibers, and bedding is produced from toxin-free fabrics to dissipate body heat. If guests still struggle to nod off, a sleep coach is on site.
Norton is convinced that this market is ready to explode. “The pandemic reinforced the values we had baked into the company. Everything became more relevant,” he says. “Today we are in an even better position to become a global lifestyle brand.”
Equinox now has 15 hotels in the pipeline, according to Norton, with New York providing the template for other U.S. properties and in key overseas cities. London, Paris, Madrid and Milan are all on the to-do list. Significantly though, the company has also identified what it sees as a new hospitality market—“well-being resorts” outside of urban areas—which promise a livelier take on the typical high-end wellness retreat with its massages, mud baths and panpipes.
“We’re talking about destinations where the emphasis isn’t on eating carrots,” Norton explains. “At our resorts the focus will be on sports, fitness and an all-round healthy lifestyle—curated experiences built around activities such as sailing or climbing or hiking. Everything will take place in a particularly high-quality and stylish surrounding.”
He insists that the target clientele for these resorts is anyone who shares the healthy-living mindset, rather than any particular age group. “This is a huge and rapidly growing market globally and one that Equinox understands uniquely, having successfully engineered the health and fitness clubs. We know what club members want and they know that they can trust us to deliver.”
He insists that the target clientele for these resorts is anyone who shares the healthy-living mindset, rather than any particular age group. “This is a huge and rapidly growing market globally and one that Equinox understands uniquely, having successfully engineered the health and fitness clubs.
We know what club members want and they know that they can trust us to deliver.”