A comprehensive study from the nonprofit Global Wellness Institute (GWI), “The Global Wellness Economy: Looking Beyond COVID,” found that the broader wellness market expanded to a record $4.9 trillion in 2019 and then slid to $4.4 trillion in 2020. However, with a consumer “values shift” underway, the future of the wellness market looks strong, predicted to grow 10 percent annually through 2025 to reach $7 billion.
The report answers the questions: How did the shock of COVID-19 impact the wellness industry? Which wellness markets fared best and worst? What is the future of the wellness economy, and why?
Pandemic’s Impact Across Wellness Market
The GWI last measured the wellness industry at $4.3 trillion in 2017. Its latest research showed that the market grew to historic levels two years before the pandemic, reaching $4.9 trillion in 2019. It found strong pre-pandemic growth rates in every sector between 2017 and 2109, where each market hit a record valuation. In those years, the wellness economy grew 6.6 percent annually, a higher rate than the global economic growth rate of 4 percent.
With the enormous economic disruptions from COVID-19, the global wellness economy fell 11 percent in 2020, nearly four times greater than the global GDP decline of -2.8 percent, to $4.4 trillion.
Unsurprisingly, sectors requiring a physical presence and/or full immersion for the experience, including physical activity, wellness tourism, spas, and thermal/mineral springs, saw the most significant pandemic declines. In contrast, healthy eating/nutrition/weight loss, wellness businesses, mental wellness, and the public health/prevention/personalized medicine category showed strong pandemic growth.
For the first time, the GWI research breaks down the wellness economy for each global region.
The Asia-Pacific was one of the fastest-growing wellness markets from 2017 to 2019, 8.1 percent growth, and it also shrank the least during the pandemic by -6.4 percent. Conversely, North America was the fastest-growing wellness region from 2017 to 2019 at 8.4 percent, but the hardest hit by the pandemic by -13.4 percent.
The Asia-Pacific had the largest wellness market in 2020 ($1.5 trillion), followed by North America ($1.3 trillion) and Europe ($1.1 trillion). Per capita spending on wellness was much higher in North America ($3,567) and Europe ($1,236) than in other global regions.
GWI forecasted that the wellness economy would rebound and grow by 60 percent from 2020 to 2025, with most segments projected to exceed GDP growth during those years.
Markets with the highest growth projections—wellness tourism, thermal/mineral springs and spas—are those affected the hardest in 2020. Sectors that showed positive pandemic growth, including wellness businesses and mental wellness, were forecasted to see strong, ongoing market expansion.
“The wellness economy will grow to $7 trillion in 2025 because the forces that have been driving it to remain as powerful as ever—an expanding global middle class, an aging population and rising chronic disease,” said Katherine Johnston, GWI senior research fellow. “But the pandemic has brought new shifts and a global ‘values reset.’ ‘Wellness’ now means far more than a facial or spin class, with a growing focus on mental wellbeing and the importance of work-life balance, social justice, environmental sustainability, the built environment, and public health. These drivers will underpin the recovery of the wellness economy and they will also shift consumer, policy and healthcare spending in new directions.”
The following are snapshots of growth trends across 11 key wellness market segments:
- Wellness Tourism (pandemic loser, future winner) grew 8 percent annually from 2017 to 2019 (reaching $720 billion) and took a significant hit in 2020. The market shrunk -39.5 percent to $436 billion, while wellness trips dropped from 936 million to 601 million. The 21 percent annual growth rate projected for wellness tourism through 2025 reflects new traveler values (consumers seeking nature, sustainability and mental wellness) and a period of rapid recovery from pent-up demand in 2021 and 2022.
- Thermal/Mineral Springs (pandemic loser, future winner) One of the fastest-growing wellness markets from 2017 to 2019, with revenues rising from $56 billion to $64 billion (6.8 percent annual growth). Hit hard by the pandemic, revenues fell -39 percent in 2020, shrinking the market to $39 billion. There are now 35,099 hot springs businesses in 130 countries. GWI forecasts the downturn is temporary, with 18 percent annual growth expected through 2025 and 140-plus new projects in the pipeline.
- Spas (pandemic loser, future winner) From 2017 to 2019, the spa industry grew at an 8.7 percent annual rate and reached $111 billion in revenues across 165,714 spas with a jump in hotel/resort spas from 48,248 to 60,873. The industry was hit hard in 2020, with revenues falling -39 percent to $69 billion and spa businesses dropping to 160,100 with a loss of over 4,000 day spas. However, it forecasts the industry will have a fast recovery, with the market growing 17 percent annually through 2025 and more than doubling revenues to $150.5 billion.
- Wellness Businesses (pandemic and future winner) With COVID-19 accelerating the understanding of the role that the built environment and our homes play in our physical and mental health, wellness businesses were the number one growth leader before and during the pandemic: The market grew from $148.5 billion in 2017 to $225 billion in 2019 to $275 billion in 2020—– a 22 percent annual growth. Whether built or in the pipeline, wellness residential projects increased from 740 in 2018 to 2,300 today. GWI forecasts that Wellness businesses will double to $580 billion from 2020 to 2025 (a 16 percent annual growth).
- Physical Activity (pandemic loser, future winner) This six-sector market grew five percent from 2018 to 2019 to reach $874 billion, but revenues fell 15.5 percent in 2020 to $738 billion. The fitness subsector (gyms, studios, classes) incurred a -37 percent revenue decline in 2020. Fitness technology was the bright spot, with a growth of 29 percent in 2020 to become a $49.5 billion market with digital apps, streaming and on-demand workout platforms increasing 40 percent. The segment’s hybrid bricks and mortar/digital future is forecast to nearly double from $738 billion to $1.2 trillion from 2020 to 2025.
- Mental Wellness (pandemic and future winner) posted strong 7 percent growth from 2019 to 2020 (from a $122 billion to a $131 billion market), as consumers sought solutions to cope with pandemic stressors. The largest segment, “senses, spaces and sleep,” grew 12.4 percent, while the smallest segment, meditation and mindfulness, grew the fastest by 25 percent. GWI forecasts a 10 percent growth annually through 2025 to reach $210 billion.
- Personal Care & Beauty (pandemic loser, future winner) Consumer spending expanded from $1 trillion in 2017 to $1.1 trillion in 2019 and declined by 13 percent to $955 billion in 2020. In 2020, the Asia-Pacific region moved from third to the number one-ranked market. GWI forecasts spending will bounce back post-pandemic, with 8.2 percent annual growth through 2025 to reach $1.4 trillion.
- Traditional & Complementary Medicine (pandemic loser, future winner) This market spans different holistic, indigenous, ancient therapies, and products (acupuncture, Ayurveda, Traditional Chinese Medicine, chiropractic, etc.). It grew from $376 billion in 2017 to $432 billion in 2019 but contracted to $413 billion in 2020. GWI forecasts the sector will see a 7 percent annual growth from 2020 to 2025, reaching $583 billion.
- Healthy Eating, Nutrition and Weight Loss (pandemic and future winner) One of the few wellness sectors that maintained positive growth (3.6 percent) during the pandemic, launched a wave of interest in home cooking, healthy food and immunity-focused foods and supplements. The sector grew from $858 billion in 2017 to $912 billion in 2019 to $945.5 billion in 2020 and GWI forecasted it will grow 5 percent annually through 2025 to reach $1.2 trillion.
- Public Health, Prevention & Personalized Medicine (pandemic and future winner) Another sector that saw positive pandemic growth (4.5 percent), mainly because governments and healthcare systems increased their public health and prevention expenditures during the COVID-19 crisis. The sector grew from $328 billion in 2017 to $359 billion in 2019 to $375 billion in 2020 (when it represented about 4 percent of total global health expenditures at $8.8 trillion). The segment is forecasted to grow 5 percent annually through 2025 to reach $478 billion.
- Workplace Wellness (pandemic loser, future winner with a difference) This segment grew 4.6 percent annually from 2017 to 2019, reaching $52.2 billion, but then decreased 7 percent in 2020, to $48.5 billion. Companies recognize that a compartmentalized, programmatic approach to employee wellbeing is ineffective in tackling the increased challenges of stress, work-life balance, and mental health. Many have shifted to holistic approaches that include changing culture to focusing on the built environment. These expenditures cannot be measured as “workplace wellness,” so spending may decline even as the focus on employee wellbeing expands. Even so, the market is expected to grow 4 percent annually through 2025, reaching $58.4 billion.
To read the full report, go here.
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