Demographics and growing economies are changing the shape of future travelers in the world. What factors is the future of hospitality looking to deal with?
Nowadays, flights have reached an accessibility in price that allows almost anyone to get on a plane and see the world.
In fact, between 2017 and 2036, the number of airline passengers is expected to grow at a compound annual growth rate (CAGR) of 4.7 percent. Furthermore, due to the emerging economies middle class access to the market, aviation demand is set to be fueled by the rising affluence of the middle classes in emerging markets.
Annual growth in global air traffic passenger demand from 2005 to 2018:
Going more in detail, Chinese travelers are becoming always more frequent. As Thanos Papasavvas, Founder & CIO, ABP Invest says: the traffic of travelers is growing also due to the expanding Chinese middle class.
Furthermore, emerging economies are expected to play a key role in the growth of travelers. Within the next decade, the number of households making at least US$ 100,000 annually will increase by 30 million, with one out of three of these households located in emerging markets. And just as affluence in these markets continues to rapidly grow, so does their spending on travel. There is a projected growth of $1.3 billion in transportation spending in the period going from 2012 to 2020.
Therefore, leading hotels, recognizing this trend, are now focusing much of their new investments in Asia, with properties being opened in all price tiers, in particular luxury brands.
Another important factor are the younger generations now becoming the leading type of travelers. As Chapman adds “By 2020, 320 million international trips are expected to be made by youth travelers each year, a staggering 47% increase from 217 million in 2013”.
“The millennial generation is growing up in a technologically advanced world where travelling and communication go hand-in-hand and are easier than ever before,” Chapman said in a statement. “It is important for the travel industry to better cater to the needs and interests of millennial travelers,” who are spending more and embracing the internet and mobile technology during travels.
To conclude, the hospitality industry needs to comply to this upcoming trends offering solutions that are at pace with technology as well as demand, and that can satisfy the expectations of a new type of traveler. Only with the ceaseless progressing transformation of the hospitality sector the full potential of this industry can be reached.
Author: Miles Ghella, EHL Bachelor Student