The problem with slow-burn trends such as the current aging out of the baby boomers is not so much that we fail to predict them. It's that we often cannot account for them in a readily quantifiable and obviously actionable manner on a quarterly or annual financial statement to thereby jump-start the necessary adjustments to adapt a business.

This failure to pivot is what caused Blockbuster and Kodak to file for protection — two examples of Adam Smith’s silent hand of pervasive, irreversible, indirect and often unpredictable market evolutions. In hindsight, we ask ourselves, “How could they not have seen it?” But this thinking is a bit naïve as it doesn’t account for entrenched culture and the need to protect the cash cow.

Wellness in 2023 has blossomed to the forefront of cultural and hotel industry awareness, and yet the two of us believe that we are all still greatly underestimating just how big the total addressable market for this space is.

Hotels and brands the world over remain entrenched in a straight "heads in beds" mentality that could one day spell doom for their business viability. Our hope is that hotel executives start planning now while we’re still at the "elbow of the curve" with this growing trend, so they aren’t pushed out like some bygone.

Silent-hand economic changes are just that — hidden from plain view. So, let’s spell this baby boomer situation out in a sequence of events for you to understand how to make money from it all. As a note, we are speaking in general about the globe’s advanced economies, although each country offers its own nuances within a broader trend.

1. Boomers are currently retiring and exiting the working-age population, and they will continue to do so over the next decade.
   
2. Because boomers started having fewer children on average than previous generations, there are fewer replacement workers and consumers among Gen X, Y and Z to maintain the working-age ratio within the total population.
   
3. A shrinking working-age population means overall labor supply shortages, thereby increasing the price that labor can command.
   
4. As boomers get older, they will incur more age-related diseases, increasing the demand for healthcare services and workers in this sector.
   
5. More elderly people demanding healthcare services leads to inflation of those services as supply can never keep up with demand. This is reflected in greater direct-to-consumer costs, more expensive insurance, an inability to find labor in this sector, high costs of labor, increased wait times at the hospital or a greater levy on taxpayers to maintain standards.
   
6. As they are also currently the wealthiest generation, many boomers can tolerate this healthcare crunch scenario by being able to afford the ever-higher prices, and yet paying these premiums often only adds more fuel to the fire of inflation.
   
7. While some may be able to stomach this medical system inflation, others will be incentivized to seek out alternative methods, practices and products to support their healthcare and well-being needs.

From these seven steps, we paint a picture of why the economics of baby boomers getting older will in its own right compel people to start incorporating wellness into their lives as a means of precluding the need for expensive healthcare services.
There are other concurrent trends converging to further propel consumers to buy wellness products:

• Far greater awareness and access to healthier eating, exercise and supplementation options.
  
• Mainstream acceptance of wellness practices such as yoga, meditation and contrast therapy.
  
• Scientific research that is proving various wellness, fitness and nutrition practices as beneficial to one’s lifespan and health span — the good years you get on this green earth.
  
• Economies of scale of functional genomics to advance our medical understanding of human longevity and then apply this knowledge in the real world.

We’ve driven the point that the future belongs to wellness. It’s also worth describing the ways that wellness programming can protect your hotel’s room rates versus competitors, add new revenue streams and help to reduce overall labor costs.

As the demand and cultural appreciation for wellness inevitably grow over the next two decades, this programming only becomes all the more crucial.

1. Wellness amenities are a means to differentiate hotel brands on a feature-comparison basis, first preventing rate commoditization and then helping to command higher rates relative to the market.
   
2. New wellness programming can work to refresh the marketing presentation and inventory distribution to diversify the target audience and customer segmentation.
   
3. Wellness amenities and services can be packaged or cross-sold to boost total revenue per guest.
   
4. Devoting more resources to employee well-being will help to buffer inflationary wages, increase team retention and stave off productivity losses from sick days or absenteeism.

To close, all this is coming at it from a thousand yards away. We all know wellness is coming and it’s going to be big, but to meet it head-on will require a lot of work right now to set your hotel organization up for more success in the coming years. It takes a shock to the system to change an entrenched culture, but that’s exactly what’s required.
Larry and Adam Mogelonsky are partners at Hotel Mogel Consulting Limited, a Toronto-based consulting practice.

The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or CoStar Group and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to contact an editor with any questions or concern.

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