The world is undergoing a major shift in decision-making and buying power. In 2015, millennials surpassed every other age group as the largest generation in the U.S. labor force. Then in 2016, Gen-Yer’s overtook Baby Boomers as America’s largest living generation. But the generational impact isn’t limited to the United States. Regardless of their birthplace, millennials consistently value experiences over material goods. As middle-class income brackets grow internationally, global travel is becoming accessible to millions more people and business. It’s already happening with tourism, and where there’s leisure travel, meetings and group booking will follow. So what’s setting us up for a bright decade ahead?
Millennials Make the Decisions Now
If there’s one trait that millennials commonly share (across any demographic), it’s that they value experiences over material goods. It’s a common thread that drives millennial buying habits in their personal lives but it also changes common perceptions towards business travel.
According to a recent Hipmunk survey, 72% of millennials reported that they traveled more in 2016 than in years prior. Additionally, 55% of millennials say they extend business trips into a little extra leisure time. They’re also seeking career paths that make traveling more likely: 38% of millennials travel for business, compared to just 23% and 8% for Gen Xers and boomers respectively. The relationship between leisure and business travel has never been more closer.
55% of millennials extend business trips for extra leisure time.
Click To Tweet
“This extraordinary growth is from the demand side, because of the growing middle class around the world, people reaching retirement, and Millennials are more interested in experiences than collecting cars and houses.”
– Arne Sorenson, CEO of Marriott International @ NYU International Hospitality Investment Conference 2016
If it’s not something that can be shared with friends and colleagues or on social media, it’s not something that’s worth pursuing. Today, meeting and event professionals are getting wise and expanding the ways they engage with millennial attendees at professional events. They’re doubling down on more smaller meetings, planned and executed with shorter turnaround times which make it possible to take advantage of a destination’s cultural offerings. The only question is, will your hotel be ready to accommodate modern groups?
Join the movement for a better event. Try Social Tables today.
Money Talks, Now it’s Bilingual
Internationally, most of 2016 proved to be a robust year for meetings, especially with the backing of a strong U.S. dollar. An American Express study forecasted that group rates would grow across North America, Europe, APAC, and South America through the entirety of 2016 (and by as much as 4.2% across the U.S and Canada). Across the globe, the middle class has doubled in the last 20 years, which means that properties in major cities will start expanding their comp sets overseas. Events that clung to cities like New York, LA, Berlin, and Hong Kong in the past, are now cosying up to new markets.
The next five years hold the possibility for continued growth in group business, particularly in Europe where hoteliers are relying on meetings and events to make up for the loss in tourism. Terrorist attacks in France have already contribute to a 20 to 30 percent drop in hotel guest-room reservations. In the same way that hospitality struggled in the U.S. post 9/11, “would-be” travelers are looking for new places to spend their time off. In the wake of the tragedies, hotel sales managers in Europe are turning to meetings and events to make up for lost occupancy.
Chairman and Chief Executive Officer Sebastien Bazinof at Accor SA, (Europe’s largest hotel operator), is optimistic that Accor properties will stay in the green in the coming months and had this to say at NYU’s International Hospitality Investment Conference in 2016, “With several of our key markets, including France and Brazil, shaken by crises and violent events, group [demand] showed remarkable resilience in the first half,” said in the statement. That’s a healthy assessment given the opportunity to drive business from Asia, the Middle East, and the U.S.
Old Threats Become New Partners
Airbnb offers over 2,000,000 places for guests to stay, and owns no real estate. That also means that some hosts didn’t have the permits to operate “micro-hotels” – until now. Major cities like New York and San Francisco are enacting new regulation that would require Airbnb to register some properties as traditional hotels, or face serious fines, and potentially lawsuits. For the first time since home-sharing rose into ubiquity, they’ll compete with hotels on a more even playing field price-wise.
As many as 1 in 3 group rooms are booked outside of the hotel.
Click To Tweet
At the same time millennials love the Airbnb experience, even during business travel; a recent joint study by ASAE, CEIR, MPI and PCMA revealed that as many as 1 in 3 group rooms are booked outside of the hotel. Hoteliers have to face the facts that home-sharing isn’t going anywhere. But that’s no cause for alarm. By working in tandem with hoteliers, services like Airbnb can actually provide more flexibility to your group sales strategy. The next 5 years will result in a more balanced distribution of business between a more leisure focused Airbnb, and hoteliers looking towards homesharing as an overflow strategy to satisfy group demand.
The Peak is Yet to Come
Cities like Nashville have experienced annual RevPAR growth since they came out of the recession, and experts are confident it can continue to grow through 2018. In Nashville, occupancy sits at a very healthy 74% with average daily room rates at $130. Hotels have already started reaping the benefits by reinvesting in construction and renovations, and it’s happening in new markets.
“…Outside of a couple big markets like NYC, the rest of the country is still growing RevPAR—most of which is coming via rate increase. Pipeline is slowing due to difficulty in getting construction financing, yet demand is increasing at a steady pace so I believe we are at a somewhat slow pace but still growing. Having said that I think we will continue to experience this well into 2018.”
-Bharat Patel, Chairman and CEO, Sun Companies (Published by Hotel News Now)
Hoteliers are not asking if demand will continue to increase. The answer is a resounding “Yes”! What they are asking is; in growing markets, how can they capture that growth? Keep reading to see how sales teams are optimizing revenue by focusing on higher value clients and bringing more predictability to group sales.
The post The Next Five Years: Future Hospitality Trends You Should Know Now appeared first on The Social Tables Blog.
No comments:
Post a Comment