Alta Thoughts (October 2022)
By Rakesh Patel
Welcome to our October summary of all things travel and hospitality. This month we cover the phenomena of Blue Zones wellness, plus our comments on sustainable air travel and building construction. We finish with the GDP impact of fitness industry. Please enjoy and you can follow us directly on LinkedIn and go to our website.
By way of background, Alta Capital manages real estate funds that invest in future hospitality trends such as wellness, experiential and sustainability. We source and acquire undervalued/undermanaged boutique hotel assets and reposition/redevelop them for these future trends.
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Blue Zone research has generated publicity and controversy since the original work from Michel Poulain, Dan Buettner and Giovanni Pes. Is the longevity seen in these five regions (Okinawa, Sardinia, Nicoya, Icaria, Loma Linda) coincidental or is there commonality we can learn from for our own well-being?
The scientific stance is that controlled studies and data are lacking, so there is little substance to the work. Still it is fascinating to see the concentration of centenarians in these Blue Zones and observe some common elements:
1/ Diets are plant rich but not vegetarian; 2/ Exercise is part of a daily routine rather than formulated; 3/ Community connectivity and social connections are robust; 4/ Sleep is meaningful; 5/ There is a strong sense of purpose.
The shift in air traveller preferences in this McKinsey survey are interesting to observe. Whilst airline emissions are increasingly a top concern for travellers, they continue to value connections and price over sustainability. Further, attitudes vary widely depending on geography and demographic.
The direction of travel seems set though, with the majority of travellers now concerned by climate change and aviation carbon emissions.
The challenge to the airline industry is adapting to this shift in preferences, whilst optimising profitability. The pledge by the industry to be carbon neutral by 2050, requires not just the use of carbon offsets, but also a leap forward in technologies that are still far from commercial use. Passengers will be watching and ultimately vote with their air miles.
What is the direct and indirect economic impact of the health and fitness sector? This Deloitte report measures direct impact, eg. employment in the fitness industry, and the indirect impact, eg. cost of absenteeism and presenteeism.
The report argues that the industry is not only a significant contributor to GDP and employment, both directly and in the supply chain, but also by increasing activity and reducing lost work days, it also helps to reduce healthcare costs.
The UK provides a good example. In 2021, the health and fitness industry had a direct value add of US$3bn and supported an additional US$1.5bn in value-added in its supply chain. The report estimates that inactivity costs the UK healthcare system US$4.3bn a year, and absenteeism and presenteeism costs the UK economy US$16.5bn annually.
In conclusion, every UK inactive worker costs the economy US$1,713 per year, therefore investing US$1,700 in helping an inactive person to become active, results in a payback in a year, and a multiple of this if a habit is built.