GUEST COLUMN: Resorts Should be Mindful of Risks in Capitalizing on Resurging Wellness Travel Trend – By Jack Clements

Wellness travel is back with a vengeance, and Arizona continues to be ideally positioned to capitalize on the resurgence. But even though the possibilities for doing so continue to expand, the hospitality industry should be mindful of the risks that could make the way forward a challenge.

The coronavirus pandemic punctured the wellness travel balloon that had been steadily expanding over the last decade. Wellness travel shrank by almost 40% to $436 billion in 2020 as travel and hospitality were shut down. But today, consumers look to travel – and wellness destinations specifically – to cure the stresses of the last two years, and are pushing wellness travel to expand by 21% annually through 2025 to hit $1.1 trillion.  

Arizona has long been on the leading edge of the global trend, consistently ranking among the top ten global destinations for wellness. With a great climate and natural amenities like Tucson’s lush, mountain-surrounded desert to Sedona’s healing “energy vortexes,” the state’s hospitality industry is a natural for holistic wellness.  

Tucson and the wellness tourism trend

Indeed, the Tucson vicinity itself has various renowned wellness resorts that set the bar for other comers. Canyon Ranch Tucson’s 80,000 square-foot spa, offering 40 rituals and treatments, is augmented by a host of physical and spiritual practices and tools. North of Tucson at the base of the Santa Catalina Mountains, Miraval Arizona strives to help guests achieve balance through curated mindfulness activities from meditation to massage.

“Wellness,” of course, is in the eye of the beholder. The standard “mani/pedi/massage” type spa services are basic table stakes these days. A wellness experience might be built around an integrated suite of medical and health coaching. Guests might design their own itineraries around physical activities like hiking or forest bathing and dharma talks. Others may focus on the spiritual or mindfulness – at one venue, a Tibetan Buddhist Master[1] helps guests find mind, body and spirit serenity.

It’s no surprise that many operators continue to expand their take on wellness, going beyond the “hard” assets (gyms, treatment rooms and spas) to integrate “soft” components that support the environment. Think aromatherapy and climate-controlled rooms and a lobby that is airy and tranquil, along with healthy and locally sourced food and beverages.

Operators that believe some aspect of wellness is worth exploring for their properties should undertake a comprehensive analysis of what it will take to succeed. Not only is it critical to have a strategy, a detailed implementation plan and the training and culture to make it work, but risk management should inform the way forward. Anything less waves the red flag to insurance underwriters.

Here are risks to be mindful of:

Staffing up versus outsourcing

A hotel or resort that directly hires personnel like masseuses, nutritionists or fitness coaches will need to verify that candidates have current licenses, certifications and professional liability insurance. When current staff is charged with performing expanded wellness services, training must be provided to augment their capabilities. When it comes to spa-type services, for example, not just anyone should give Botox injections, hot stone or Swedish massage therapies.

Wellness-focused hospitality destinations also need additional insurance, such as abuse and sexual molestation coverage, and in some cases, medical malpractice. 

Outsourcing relieves the burden of finding qualified employees, but companies need to ensure third-party vendors carry appropriate insurance for staff and services offered. There also must be a system for checking workers’ license and certification status. Further, they should provide quarterly updates on insurance and employment changes, and immediately notify the resort operator of any complaints about or issues with their employees.

“Soft” wellness features may also address long-term employee risks

Wellness also encompasses the overall environment that’s being created, which has to be assessed for the full scope of risks. A green orientation, for example, has a positive impact on the brand but can also have longer-term implications for employees. When laundry and housekeeping services are minimized in line with a greener, contactless guest experience, the risk of worker injuries is better managed. It translates into less stretching and heavy lifting of furniture, improving workflows and overall employee health – with less of a bite from workers’ compensation liabilities.

On- and off-site wellness options: Underwriters need to know about expanded wellness offerings, whether it’s an activity within the facility, like fitness classes, or outside, like surfing lessons. Hotels offering higher-risk activities need to ensure they have the right policy endorsements to cover these risks, and that they’re managing the risks properly to lower premiums.

Waivers and disclosures: Guests need to know any inherent risks that come with their stay. They need to sign liability waivers prior to participating in activities, whether it’s a “forest bath” walk in the woods or a massage. Brokers and attorneys need to review all disclosures and waivers and ensure they adequately cover potential risks.

About the author

Jack Clements, CPA, CIC, is based in Tucson and is the president of Arizona Operations for global insurance brokerage Hub International.  Clements joined HUB in 2020 as part of the Clements Insurance and HUB Southwest acquisition. He has been in the insurance industry since 1989 and manages a portfolio of challenging and complex cannabis, healthcare, real estate and construction accounts. He is a member of HUB Southwest’s Executive Management Team and heads the operations for Hub’s Arizona offices.

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