The modern tourism and hospitality business is significantly being influenced by demography, and it is posited that it will characterize the future of the area. Current demographic patterns will influence the demand for tourism and the choice of the workforce, which will impact how the industry operates, is structured, and how it will develop in a sustainable manner.
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Furthermore, the tourism sector has to know what, why, how, and when something will occur, the repercussions, and the strategies that should be employed to exploit the benefits and play down the risks that these changes will bring. Tourism is quickly gaining a global dimension as people have a higher purchasing power, allowing them to tour cross-border destinations.
The World Travel & Tourism Council report shows that there were one billion international tourists in 2012. It also found that the global tourism and travel industry earned $2.057 trillion in direct global contribution to the gross domestic product in the same year, and it is estimated that this figure will grow to $3.0 trillion in 2022 (Fuller, 2013).
The industry has as well shown remarkable growth in the United States, as it accounted for $438.6 billion of the gross domestic product in 2012, and expectations are that it will rise to $628.5 billion in 2023.
This growth is attributed to a considerable change in customer demographics with a rising population of baby boomers and middle-class segments who can afford to travel for leisure. Moreover, statistics show that Asians form a significant proportion of travelers in modern-day tourism.
These changes have necessitated the need to study trends in tourist demographics in order to anticipate a swing in client preferences and develop products that meet these tastes. This is a discussion of current and future trends of tourist demographics and the challenges and opportunities they present to the tourism industry.
Travel and leisure patterns have changed over the years in several ways. For example, international tourism is gaining popularity as people desire to see more than what their country has to offer.
Records show that most of the guests who visit the United States are from Western Europe and Asia as shown in 2007 documentations where, 45.6% of all the arrivals were from Western Europe, while 26.9% were from Far East Asia (U.S. Department of Commerce, 2007). Furthermore, it is reported that in the same year, the average age of male leisure travelers was 42 years while that of females was 38 years.
The proportion of visitors from Western Europe and Asia was 43.2% and 26.6% respectively in 2010, which illustrates that the number of European tourists fell while that of Asians rose over the three year period. In addition, the average age of male travelers was 42 years and that of females was 37 years (U.S. Department of Commerce, 2010).
The rise in the number of Asian guests is an indicator that these countries are significantly impacting the global tourism industry as countries like China and India record a strong middle class, which is estimated to be approximately 600 million people in 2015. Experts also predict that, by 2030, the middle-class population in China will have grown by about two billion people.
Indonesia also anticipates that about 60 million people will join this group in the next couple of years (Fuller, 2013). Consequently, it is believed that there will be a higher demand for leisure travel, as the middle class is considered a strong indicator of travel intent, ability, and desire.
Additionally, analysts argue that baby boomers will form a critical component of the tourism industry, as it is projected that they will have a higher disposable income, and will be more youthful and determined to travel than their predecessors (Boksberger, Sund, & Schuckert, 2009). The above statement is explained by the fact that it is estimated that this age group will own about 60% of the nation’s wealth in the United States by 2015.
In addition, they will account for 40% of total spending in the same period and it is assumed that they will spend a substantial amount of time traveling after retirement (Deloitte, 2010).
Though boomers are likely to catapult the travel sector, the younger populace aged between 20 and 50 years is also keen on traveling albeit on cheaper budgets. Moreover, players in the business should also focus on this market because it has shown a desire to tour and are flexible to participate in a range of fun activities.
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Importance of Understanding Demographic Trends
It is apparent that demographic trends in the tourism industry in the United States and globally will change extensively in the next few years. This change means that service providers must develop product offerings that appeal to the changing clientele in order to attract repeat customers.
Consequently, it will be essential to understand the cultural differences that come with these changes and efforts made to ensure that visitors feel comfortable while on vacation.
Some of these efforts include sensitizing staff to tolerate the different cultures, offering meals from different parts of the world, and employing multi-lingual tour guides. Besides that, it is essential to make sure that the leisure activities provided are suitable for the diverse market segments. Additionally, it will be vital to develop sustainable strategies that help businesses attract and retain different groups.
Opportunities and Challenges
The current and future demographic trends of travelers present several opportunities for the hospitality industry for players who can package the products to take advantage of the expectations of the different segments. For instance, senior tourists are likely to be thrilled by cruise- related activities because they are, quiet, and are less risky.
In contrast, generation x and y may be more inclined to engage in precarious and social activities such as excursions. It is also imperative to consider the changing factors such as more holiday periods, intention to combine leisure travel with work, shorter vacations, preference for a participatory vacation and discretionary tourism, among other factors.
Secondly, younger travelers have access to information, which influences their choice of destinations and activities. They have become sophisticated clients who want value for money so they are deemed to be experience-oriented rather than destination-oriented. There is an opportunity to transform the market by offering customized holidays and providing personalized services, allowing visitors to take on a more active role during their trips.
All this information can be posted online to make it easily accessible and where possible allow for electronic booking, which has become a favorite travel option for the tech-savvy.
The shift in tourism demographics also creates prospects for forging alliances to derive synergy from each other. For instance, the middle class and affluent travelers would prefer to have an airport and hotel transfer services rather than having to arrange their own transport. Moreover, they would like tour operators to plan their itinerary and they are willing to pay a premium to avoid the inconveniences that come with self-planning for a vacation.
This new demand requires players to work together to ensure they deliver top-notch services to create delight and attract repeat business and referrals.
Unfortunately, the demographic changes have a downside. For example, the surge in baby boomer population comes with additional costs as this age group may require special treatment because of its fragile nature.
As a result, service providers with limited resources may opt to steer away from this market, and miss out on the returns that it can generate. On the other hand, a swell in the number of international visitors means that firms have to invest heavily in hiring and training multicultural staff to increase customer satisfaction. Lastly, there may be a need to forge partnerships to derive synergy; however, it is not easy to do so with competitors.
The process of management of a hospitality facility has multiple layers and very complicated infrastructure. Like any other type of business tourist business is oriented towards the maximization of revenue potential. This is done through the representation of new branches and services to the facility and exploring the range of benefits and activities the facility can provide for the customers.
This is why the statistical knowledge of the needs of potential clients is crucial. The success of the facility management lies in the accurate monitoring of the kinds of tourists using the services of the facility and the modern cost policy.
Contemporary customers have access to the information, which influences their expectations of the quality of services distributed by the facilities; this is why training a qualified staff is an important part of the management success.
The modern world is tightly connected to the technologies and the Internet. This is why every contemporary hospitality facility has to be equipped with a powerful IT team and the best software needed to provide predictive management based on diagnostics and planning.
It is highly important to keep an eye on all the modern newly developed trends within the business and quickly adopt all the changes, because the potential customers are most likely to be interested in the most modern services, so their choices of the facilities will be based on their levels of preparation for the season and on their abilities to please even the most spoiled customers.
There are various types of people traveling, and they have various demands, yet the hospitality facilities have to offer certain types of services that will never stop being popular. Such services are good, comfortable and clean accommodations, diverse and fresh meals, and a broad range of beverages. These are the aspects of the facility management that need the most of attention.
The tourism and hospitality sector is growing at a remarkable rate locally and globally. Analysts attribute this growth to demographic changes such as a strong global middle class, a rise in the number of senior tourists, and a rise in the number of international travelers. This shift means that the sector needs to understand current patterns, anticipate future trends, and understand the opportunities and challenges that they present.
Nevertheless, the most important thing for tours and hotel operators is to formulate strategies and tactics that will grow their competitive advantage because only those that can foresee and plan for new trends will survive in the trade.
Boksberger, P., Sund, K., & Schuckert, M. (2009). Between Past, Present and Future – Implications of Socio-demographic Changes in Tourism, Trends and Issues in Global Tourism, 29-36. Web.
Deloitte. (2010). Hospitality 2015: Game Changers or Spectators? 1-26. Web.
Fuller, E. (2013). Impact of the World’s Travel/Tourism Industry Adds Up To More Than A Walk On The Beach, Forbes. Web.
U.S Department of Commerce. (2007). Profile of Overseas Travelers to the United States: 2007 Inbound. Web.
U.S Department of Commerce. (2010). Profile of Overseas Travelers to the United States: 2010 Inbound. Web.