Canyon Ranch: From ‘fat Farm’ to Wellness Leader

FORT WORTH, Texas—Hotel companies are seeking and seizing opportunities to expand into the health and wellness space.

Take Hyatt Hotels Corporation, for example, which launched a campaign to develop “adjacent spaces” to its hotels with its January purchase of wellness provider Miraval Group.

But what sets the Canyon Ranch brand apart, according to COO Tom Klein, is that wellness comes first, and the hotel business comes second.

“We add tourism and hospitality with what we do as our core, which is the wellness piece,” he said. “Wellness is a far greater focus of what we do than an ancillary service.”

Evolution of the brand
Canyon Ranch began in 1979 as “a fat farm,” Klein said, on 150 acres in the foothills of the Santa Catalina Mountains in Tucson, Arizona.

Melvin Zuckerman founded the company with his wife, Enid, and Jerrold Cohen, Canyon Ranch’s first CEO, to share a vision for healthy living. But the catalyst was the 40 extra pounds that Melvin Zuckerman wanted to lose.

He had recently returned from a stay at a spa, Klein said, and thought: “This has changed my life. How can I better the lives of others?”

The Zuckermans bought the Tucson property—an old “dude ranch”—and eventually transformed it into a resort with 162 guestrooms and an 80,000-square-foot spa complex. On the day it opened, the property had just one paying guest, seven nonpaying guests and 88 employees, according to a company fact sheet.

Ten years later, in October 1989, the Canyon Ranch brand expanded with the addition of a second resort hotel and spa—the Canyon Ranch in Lenox, on 120 acres in the Berkshires of Lenox, Massachusetts.

The Bellefontaine Mansion, built in 1897, is a focal point of the Canyon Ranch in Lenox resort in the Berkshires of Lenox, Massachusetts. (Photo: Canyon Ranch)

The brand grew again with the June 1999 opening of the first Canyon Ranch SpaClub at The Venetian Resort in Las Vegas; the expansion of its SpaClubs to cruise ships, starting with Cunard Luxury Cruise Line’s Queen Mary 2 in 2004; and the 2008 opening of the boutique hotel and condominium community Canyon Ranch Hotel & Spa in Miami Beach.

Canyon Ranch has “constantly been innovators of wellness,” Klein said.

In the beginning, he said, “when people talked about wellness and spa experiences around the world, there was Canyon Ranch and probably only a couple of others. Today, you probably have 20 to 30 companies that do that, including Miraval.”

Focus and demographics
To stay ahead of the competition, Canyon Ranch focuses on what it does best: “a total immersive experience.”

“It’s a total, collaborative approach which other companies simply don’t do,” Klein said, “and we’ll stay true to that.”

Guests of Canyon Ranch “come for a purpose,” he said, “whether that’s weight loss, or just to reset mind, body and soul. … It’s a place of tranquility. … Some people call it a safe haven. … They’re coming for a really transformational experience.”

On average, those guests are affluent people in their early 50s, Klein said.

“We’re not seeing that 20- to 30-year age gap yet,” he said. “Certainly, we’re seeing the early-30s to mid-40s demographic showing more interest in the experience.”

The Lenox property sees a lot of bookings out of the northeast U.S., while at Tucson, there’s a high degree of international bookings, he said.

“Wellness doesn’t take a vacation, doesn’t take a break,” Klein said, adding that the Canyon Ranch resorts in Tucson and Lenox see average occupancy in the mid-70s.

“While we felt the recession in Tucson and Lenox, we didn’t feel it as much as the industry as a whole did. Length of stay may have gone down a little bit, but the frequency (of bookings) didn’t decrease that much. … I would say that trend will hold true going forward.”

Guest needs and technology have played a big part in the evolution of the brand—though in-room tech is less important to guests, many of whom book at Canyon Ranch to unplug. The tech that matters at Canyon Ranch is in the state-of-the-art equipment used in exercise physiology and things like body composition analysis.

“As we evolve now,” Klein said, “an important part of the experience becomes, how do we stay in touch with our guests when they leave Canyon Ranch?”

The brand is developing an app “to stay in touch” with guests who say they need accountability to stay on their healthier track.

At the same time, “the fundamental principle of our mission of wellness really won’t change,” Klein said, “because it’s a state of mind.”

The future of the brand
The direction of Canyon Ranch passed from the founders—who announced their retirement from the legacy brand in March—to CEO Susan Docherty, who was appointed to the position in 2015, and an expanded management team based at the company’s headquarters in Fort Worth, Texas, including Chief Marketing Officer Kathleen Shea.

“We came on knowing the founders wanted to make sure the mission was kept alive, and that whole transformative experience for guests continued for generations to come,” said Klein, who was appointed COO in April. “We’re taking the baton, not only the mission that was created, but taking and expanding the brand domestically and internationally where it makes sense.”

Klein said that opportunities exist in the resort space, particularly where there’s room in areas such as Northern California, Florida, the Midwest and even Vancouver, Canada.

In more urban settings, he said, there are opportunities for Canyon Ranch to expand with a residential component, similar to its boutique hotel and condominium property in Miami.

“From a growth standpoint in the resort market, we want to focus on North America first,” Klein said.

Later, the company could explore options internationally.

“Spain, Latin America, Mexico, Cabo … there’s no reason we shouldn’t be there in the right locations,” he said. “But our focus now really needs to be in our backyard.”