A new report published by Skift.com details the travel habits and mimdset of affluent Americans. Among the findings: 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 Affluent” (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 of how Affluent Travelers are increasingly embracing alternative accommodation options as well as the reporting on how Affluent Travelers prioritize experiences while traveling.
This week, as many begin to focus on budget planning and creating strategic plans, I'm reading more about how the hospitality industry continues to evolve in the social media era. Here are five fresh hospitality reads:
How Luxury Hotels Mine Social Data in the name of Comfort
Great reminder that (a) there is so much information available online about each of us and (b) some hoteliers are using that public data about their guests. I think there's a lesson in this piece about the importance of balancing hospitality/privacy.
How TripAdvisor wants to own the Travel Cycle
TripAdvisor has evolved from a review site to an efficient booking engine. Now the TripAdvisor teams wants to be the provider of choice for local area information and concierge service. I will be interested to see if crowdsourced hospitality data can ever truly scale.
Another clear indicator of how important it is to know your audience and to continue to refine your message to each guest.
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.
You already know how to use Expedia, Travelocity, and TripAdvisor. You're not an online travel novice. Perhaps you're using more advanced tools like Kayak, Hipmunk, and TripIt to plan your vacations. But are you neglecting to use the #1 travel resource in the world? If you're not using a professional travel agent, then you're putting your time, money, and experience at risk. Travel agents are travel EXPERTS. They've been there, done that, and donated the t-shirt.
There are many, many good reasons, which I will explain. But the bottom line is that they know more than you do, they are better connected than you, they have access to benefits you can’t get otherwise, they can often beat any other prices available (even online, yes), and after you have planned everything, they provide a safety net during your trip that you simply won’t get by booking yourself or buying insurance. Having a top travel agent can also make you an instant VIP – free room upgrades, hard to get restaurant reservations, cutting lines, access to otherwise closed stores and exhibits, private guides, and cheaper – often much cheaper – premium airfares. Here’s the best part: even though most top agents charge fees, in almost every firsthand experience I or my friends, family, and acquaintances have had, travel agents have saved money, often a lot of money, thousands of dollars, and in every case, more than paid for themselves.
“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.
A new Mojiva study being reported by EyeforTravel reveals that 61% of smartphone users would be comforable booking travel on their iPhone or Android.
The study, which was based on responses from almost 200 mobile users on the Mojiva network, shows that while 64% of users would be comfortable spending up to $500 dollars via their phones for travel, nearly forty percent of smartphone users would be comfortable booking travel in excess of $500.