Alta Thoughts (February 2023)
By Rakesh Patel
It was great to share some thoughts on Bloomberg News, about China’s reopening, Thailand tourism and the wellness industry (link to video). Thailand overall hotel occupancy finished 2022 at 70%, and this is before the Chinese fully return. Expect 110m international trips from China in 2023 compared to the peak of 155m in 2019.
I have just finished my first trip to Sri Lanka since the pandemic. Unlike other resort markets in Asia, Sri Lanka has not seen a resurgence of tourism. Even though travel advisories have been lifted, the uncertainties around the IMF bail-out are putting a cap in visitors — 2022 visitors were only 30% of the peak. Expectations are for a $2.9bn IMF deal to be agreed in 1Q, assuming there is support from both China and India — only then can a road to recovery begin.
Investors are starting to think more seriously about how the “wellness” of company employees, can impact business performance, and as a consequence, share price performance. Harvard Law School comments that the emotional wellness of employees, is a matter of shareholder interest, who recognise how this impacts “productivity, morale, recruitment, retention” and the “ability to generate long-term sustainable value”.
AllianceBernstein recommends that investors look more deeply at the data from employee sentiment surveys, and engage with management around how much they are doing for employee well-being. Whilst the U.S. Chamber of Commerce, suggests looking for employee utlization gaps in wellness programmes, to adjudicate real positive impact.
There are studies to show outperformance of stocks of companies that prioritise employee health and well-being. Quite hard to isolate this as a factor, so this research is inconclusive. But no doubt, there is an increasing imperative on companies to take action on employee physical and mental stress, leading ultimately to a more well and willing workforce.
The right to travel. Despite some obvious challenges, people remain determined to travel. This survey from STR provides some insights, and suggests the travel recovery continues through 2023.
The rapid rise in prices is not proving a deterrent to travel so far, with many travellers expecting to spend more, especially when it comes to flights. Connected to this, travel disruption, e.g. US/UK, is not turning people off.
Whilst travellers are okay to dip into over two years of “travel savings”, they are now spending more time searching for good deals, even at the luxury end of the market.
The shift in consumer spending from goods to services post-pandemic looks set to continue. The service-oriented hospitality industry is certainly reaping the benefits of this trend.
Social wellness is the antithesis of where the wellness industry has been in the last few years. Self-care through “me time” products and digital wellness, in some ways works against the harmful rising trend of loneliness. Not to mention that relationships are a key driver of health and happiness.
The latest Global Wellness Institute wellness trends report, points to a shift to social based wellness, with the creation of new social spaces, where connection through community wellness is at the core. We are learning that part of being well is connecting more deeply with those around us — thus addressing the loneliness epidemic.