A new report published by Skift.com details the travel habits and mimdset of affluent Americans. Among Â the findings: Â Affluent Americans make up just 20% of the U.S. population, but they account for 51% of total travel expenditures. The Skift report – which is available online for reporting subscribers – also looks at a sub-segment of the affluent travel market: the "Super Affluentâ€ (those with a combined household income over $200,000) amd how their travel differs from the less affluent travelers.
With just a quick analysis, the most interesting report highlights to the luxury marketer may be Skift's summary ofÂ how Affluent Travelers are increasingly embracing alternative accommodation options as well as the reporting onÂ how Affluent Travelers prioritize experiences while traveling.
Hotels.com has completed its fifth annual survey of Chinese travelers and – among other insights – developed the five profiles ofÂ Chinese who plan to travel internationally in the coming year. While the resutls show that 92% of Chinese travelers plan to increase or maintain their travel spending in the coming year, the survey also fiveÂ profiles ofÂ Chinese international travelers:
Five Profiles of Chinese International Travelers Revealed
To help the industry cope with these more independent and diverse travelers, the Chinese International Travel Monitor 2016 reveals five travel personas that Chinese travelers fall into.
1. Detailed explorers (25%): Born in the 60s and 70s, they are innovative and optimistic, like to learn and explore and to plan their trips down to the last detail.
2. Cautious connectors (25%): Also born in the 60s and 70s. They come from lower-tier cities and responsible family people and travel to bond with loved ones. They prefer safe, family-friendly hotels.
3. Experience seekers (17%): Tend to be born in the 80s and 90s and be from top-tier cities. They like stylish hotels and professional advice on local cultural activities. They travel to enrich their experience, being independent and ambitious.
4. Indulgers (12%): Most likely born in the 80s, they travel to indulge themselves and to demonstrate their power. They tend to stay at higher-star hotels and go on adventurous local tours.
5. Basic pleasure seekers (21%): Millennials born in the 90s. Unlike other groups, more of them are women than men. They are aesthetically minded and travel for non-material enjoyment, seeking value-for-money accommodation.
Chinese millennials spent 27 percent of their income on travel, according to survey data – the highest proportion among all Chinese travellers. The hoteliersâ€™ survey showed that the number of Chinese millennial guests (aged under 35) increased 12 percent, slightly more than the median increase of total Chinese guests (11 percent). This trend reflects the growing demand – and opportunity – for hospitality internationally.
A recent presentation by Peter Yesawich, vice chairman of MMGY Global, highlighted a number of trends and insights for the hospitality market in the near term. While there was definitely a lot of beneficial information presented, one key insight may emerge as the number on trend in hospitality: multigenerational travel.
"Multigenerational travel" or "mutligen travel" most commonly refers to grandparents traveling with grandchildren, but can reflect any number of generations traveling together.
According to MMGY Global, more than 20% of travelers are grandparents. Of those, 40% have taken a trip with a grandchild during the past year. And eight out of 10 times that a grandchild comes along, so does a parent.
As you can see, the market is already well developed. As more affluent baby-boomers retire and begin traveling alongside children and grandchildren, this market will will just continue to mature (pardon the pun!)
Several elements are key to capturing this target market, but most important among them is a well-developed recreation program that meets the needs of these guests collectively. Broadly inclusive cooking classes, walking tours, and lower-impact activities that can be enjoyed by all age groups are key.
For the hospitality market, multigenerational travel represents one of the few demographics that shows extensive growth potential domestically. Beyond just welcoming family guests, multigen represents a new gateway for luxury hoteliers. Traveling alongside affluent parents and grandparents, economically stretched GenX and GenY consumers are discovering brands that can serve them for decades to come as their affluence grows, making this a significant play for the luxury market.
“Hotels in some markets of China are clearly oversupplied in the next three to five years, and they won’t be generating good returns,” said Nigel Summers, Hong Kong-based director at Horwath Asia Pacific, which tracks the hospitality industry. “China has had a very strong demand. The question is whether the increase in demand is going to be big enough to handle all the new hotels.”
Sixty-one percent occupancy is not a strong indicator, however it is must be taken in context.
According to USA Today, China had 14,100 recognized hotels (those with at least one-star rating) in 2008, nearly double the 7,400 recognized hotels in 2001. By the end of 2012, the number of recognized hotels in China is expected to top 18,000.
Given the rapid supply expansion and downward economic indicators, it's quite remarkable that the country was able to maintain its 61% occupancy rate so far in 2011 – flat to the previous year.
And therein lies the hidden opportunity behind the "low" hotel occupancy numbers in China.
Hoteliers were able to expand supply at a pace roughly equal to the increase in demand. In other words, expansion in China has done nothing to dilute the market. To the contrary, international brands are reporting 23% growth in RevPAR, with continued upward pressure on both occupancy and rate.
Affinity China has unveiled some amazing statistics in a recent study of the Chinese luxury consumer that point to not just the growth of the luxury sector in China, but also the global reach of the affluent Chinese.
The average age of the Chinese luxury consumer is 20 years younger than consumers in the US or Japan
In 2010 there were over 1 million millionaires in China, up from just 300,000 just four years before
In 2010, Chinese travelers made 57 million trips abroad. That number is expected to be 100 million by 2015
More than 50% of the luxury goods purchased by Chinese are bought while they are traveling overseas
On average, Chinese travelers spend $7,000 each when traveling
There are more fascinating factoids contained in this short video overview of the Chinese market.
47% of adults in the US use social media sites versus only 26% in 2008
The average age of social media users is now 38, up from age 33 just two years ago
52% of Facebook users and 33% of Twitter users engage with social media daily
Myspace users tend to have the lowest level of education; LinkedIn users are the most educated
Within these findings, I'm most intrigued by the growth of middle-aged and senior users. While adoption by younger users tends to mark the start of trends, the growth among older users indicates mainstream acceptance. In other words, it's clear that social networking – particularly on Facebook – has officially arrived.