Hotel Online  Special Report

Health Holiday Market:
Prevention is Better than Cure

The French Accor group has announced that it plans to devote a full 20 percent of its total investments in the hospitality sector over the next 10 years to the development of health resorts. It is already the leader in France in the thalassotherapy, or sea water therapy sector, and it also has two such resorts outside France, including Thalassa Shima in Shirihama, Japan. 

More developments abroad are planned, notably in Pacific Asia and it is likely to be sooner, rather than later, if the group's recently announced full takeover bid for Accor Asia Pacific is successful. 

This confidence in the market's potential on the part of one of the world's major hotel and tourism groups sounds a clarion note for the health, or spa tourism market's future prospects. It also helps to justify the projections for future growth in demand. Moreover, this demand, which used to be primarily for medically oriented products, has now shifted towards what is effectively "preventative medicine"  - the promotion of well-being and a healthy lifestyle. 

The rapid growth in spas in the region, not to mention new spa facilities in hotels, shows that Asian groups have also been quick to see the growth potential. After all, massage and promotion of physical 'well - being have always been part of the Asian style of life. 

However, few spa resorts in the region have made any serious attempt to promote and market their products
outside Pacific Asia. And this is surprising, given that Europe and North America offer considerable untapped potential - especially at current, favourable exchange rates. 

According to Accor, at least 20 percent of Europeans are looking for more active, health-oriented holidays and would like to find some kind of health and fitness facilities integrated in their holiday resorts, or even take their holidays in a dedicated health resort. 

These findings are in line with the results of the European Travel Monitor (ETM), which indicate that health holidays have consistently grown in market share. This is due both to the increasing number of health and fitness enthusiasts, but also to those simply in search of a few days of cosseting and pampering. 

Together, they accounted for a 9-I 0 percent share of the European international holiday market in 1996 - up 10 percent in trip volume over the previous year. And this did not take into account days and short breaks, nor the trips to spas taken purely for "medical"" purposes. The overall market, excluding medical trips, is estimated at around 18 - 20  million holidays annually. 

Germany accounts for the biggest share of international spa and health business-representing between 30-40 percent of total European and probably world demand. A survey conducted in 1996 indicated that some 2.3 percent of German adults aged 14 years and over are regular clients of spas and health resorts and an additional 20.7 percent go occasionally 

Given the increased reluctance of state and private medical insurance schemes to reimburse the cost of spa treatment, more and more Germans are going abroad to sample the delights of foreign spa treatment. And Asia is currently perceived as the best place to go for quality treatment. 

Although avid spa-goers, the French rarely visit spas outside France. But the potential of the Italian and Swiss markets should not be underestimated, and the number of British opting for spa holidays is reportedly growing fast - in percentage terms, at least. 

Research findings from the U.S. tell a similar story According  to  Florida-based  Health  Fitness Dynamics - which just opened an Asian office in Kuala Lumpur - there is a boom in the spa business among Americans. And the growth has occurred mainly in the last five years. Although spas arc a great equalizer, attracting all income levels, the majority of visitors is still in the US$200,000 - plus household income bracket. 


The number of Japanese travelling abroad during the year-end and New Year holiday season (December 23 to January 3) was expected to drop for the first time in nearly two decades - by around 1.5 percent - according to Japan Travel Bureau (JTB). Favourite destination for the period was Hawaii, followed by mainland U.S. and Hong Kong. Japanese tourists were expected to spend an average of Y398,000 (US$3,085) each on their trips abroad - slightly up on the Y395,000 spent during the same period in 1996/97. 

The number of Asians visiting Southern California rose 21 percent in 1996 to 2.4 million, but a sharp drop was expected last year as a result of the economic crises in Japan, Korea-ROK, Malaysia, Thailand and Indonesia. The trend is unlikely to reverse in 1998, with the result that Southern California's arrivals count is forecast to rise by 2-3 percent in 1998. 

The results of a survey just published by the U.S. Department of Transportation, using a sample of 80,000 randomly selected households, indicate that only a modest 4 percent of Americans travel to destinations outside the U.S. The most visited foreign destinations are Canada (28 percent), Mexico (23 percent) and Europe (18 percent). 

The U.K., Austria, Italy and Ireland were Europe's best performing outbound travel markets in the first eight months of 1996, according to the European Travel Monitor (ETM). The number of German trips abroad fell for the first time in 10 years - since the ETM was first launched. With the exception of the U.S. and Caribbean, longhaul generally lost out to traditional Mediterranean sun and beach destinations. 

Destination Winners

Foreign tourist arrivals in Japan were up 15.6 percent in the first half of 1997. This was due primarily to the weak yen, but also to a 40 percent rise in tourists from Hong Kong - the fourth biggest market during the period after Korea-ROK, Chinese Taipei and the U.S. 

The Philippines recorded 1.4 million arrivals from abroad from January to August 1997, an increase of 10.5 percent. East Asia generated the major share of tourists, with some 36,400 Japanese tourists visiting the country in the eight months. Other leading markets were the U.S., Korea-ROK, Hong Kong, the U.K., Australia, Germany, Canada, France and some Southeast Asian nations. 

The Ceylon Tourist Board (CTB) says there was little impact on its tourism industry from the deadly October 15 bomb blast in the capital of Colombo, which killed 18 people and injured more than 100. More than 7,000 tourists visited Sri Lanka the week after the incident. This took total arrivals in the first ten months of 1997 to 288,000, a 20 percent rise over the same period the previous year 

Air Transport

Airline traffic growth will continue to be strongest on routes involving Asia, according to the International Air Transport Association's (IATA) latest forecasts for the five years to 2001. The highest average annual increase in scheduled international passengers expected over the period will be 8.4 percent between Northeast Asia and South Pacific, and routes between Southeast Asia and South Pacific will see an average annual increase of  7.9 percent. This will include the stimulation effect of the Olympic Games taking place in Sydney in 2000. But strong annual increases in traffic are also expected on routes between Asia and Western Europe. 

The strongest intra-regional growth anticipated within Pacific Asia's sub-regions will be in Northeast Asia, thanks largely to travel to and from China, IATA says. But traffic within Southeast Asia should also record strong growth during the five year period. 

Although it is still regarded by many as a "Western airline," Cathay Pacific's research shows that approximately 68 percent of its passengers are Asian. That is a nationality count - a residency breakdown would probably show that a good share (estimated at 15 percent) of its non-Asian passengers live in Asia.

Main Inter-Regional and Intra-Regional 
Passenger Traffic Flows, 1997 - 2001
Route % Annual Change, 
1997 - 2001
Inter-regional, between
Northeast Asia - Southeast Asia 8.2
Northeast Asia - North America 6.9
Northeast Asia - South Pacific 8.4
Southeast Asia - South Pacific 7.9
Northeast Asia - Europe 7.7
Southeast Asia - Europe 8.3
Intra-regional, within
Northeast Asia 9.0
Southeast Asia 7.6
South Pacific 5.0
Pacific Asia overall 8.3
Source: IATA

With the two major jet aircraft manufacturers battling over order book shares, it sometimes needs independent observers to add up the figures. According to the Paris-based Institute of Air Transport, net aircraft orders in the first half of 1997 were 298 to Boeing, 71 to Airbus and eight to McDonnell-Douglas (now part of Boeing). That translates to a strong 81 percent share for the Boeing group. 

In 1996, Boeing announced 717 new orders and Airbus 326 - or 69:31. But the European consortium added that if it counted letters of intent etc. - as it claims Boeing does - its total was 498. So the share ratio becomes 59:41. 

Hotels and Attractions

Hong Kong-based Travel Business Analyst (TBA) has taken results from its own hotel performance database, converted them at current exchange rates (November 30, 1997), and then compared them with exchange rates at the end of June 1997. While the comparison is more academic than practical as it concerns first half year figures, it does highlight the dramatic impact of exchange rate fluctuations during the five month period. 

As some hoteliers are now quoting in U.S. dollars, rather than local currencies, rates may not have changed much during the second half of 1997, TBA believes. However, other factors may come into play; such as the excess capacity in the region's hotels especially in Bangkok, Jakarta and Kuala Lumpur which is putting a downward pressure on room rates. 

As a sign of the way the cyber world is interlinking with the travel world, Inter-Continental is introducing 24-hour computer support service at its hotels in the Pacific Asia region - for guests! So alongside F&B and rooms managers, each Inter-Continental hotel will now also be getting its own CRM - Cyber Relations Manager.

Occupancy and Average Daily Room Rates (ADR) 
Across Pacific Asia, January - June 1997

City Occupancy % US $* US $**
Auckland 79.7 125.87 113.67
  4-star 66.6 78.96 47.86
  5-star 67.2 145.80 88.38
Beijing 4-star 65.7 111.63 111.37
Bombay 71.6 224.22 208.09
Hong Kong
  under 4-star 84.0 207.26 174.05
  5-star 75.0 316.73 317.41
Jakarta 58.1 134.28 97.28
Kuala Lumpur 71.7 81.77 58.98
Manila 75.6 125.07 94.94
Seoul 79.5 179.79 136.37
  under 4-star 80.3 128.84 115.62
  5-star 72.9 141.25 126.76
Sydney 80.4 137.63 124.21
Taipei 82.8 139.27 120.01
Tokyo 78.4 191.80 171.96
Source: Travel Business Analyst. *Exchange rates at end-June, thus before major currency fluctuations, and **at November 30

Marriott Vacation Club International (MVCI) says that timeshare has complemented the Marriott brand, that it fits synergistically into its hotel product mix and creates profits without the heavy cyclical pattern normally associated with real estate development. A high 40 percent of timeshare sales revenues come from existing owners and a further 25 percent from Marriott hotel linkages. 

MVCI sold almost 20,000 intervals to its frequent traveller club members in the U.S. from 1986 to 1993. Following these purchases, the average number of nights per year spent by MVCI timeshare owners in Marriott hotels increased from 18.4 to 25 - a growth of 36 percent. It now has 100,000 timeshare owners up 24 percent since 1990 - of whom around 16 percent outside the U.S. The group says it plans to move into Australasia in I 998. 

January 1998

Pacific Asia Travel Association

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