Hotel CEOs Say Demographics Are the Future of Travel
Yes, AI is going to be everywhere one day, and yes, lifestyle hotels are the hot new thing. But if you want to track the future of travel, the answer lies in demographics.
A “bulging” middle class, an aging population, and a global shift eastwards are among the most powerful forces in the industry, according to recent comments from global hotel CEOs at IHG, Accor, Hilton, and Marriott.
Hilton CEO Chris Nassetta, at a conference in Saudi Arabia last week, said responding to demographic shifts would help usher in a new era of growth. “My own view is we’re at the beginning of a golden age of travel,” he said. “Three things are driving that. One is demographics: We’re going to have over five billion in the middle class by 2030. Middle-class growth is huge.”
“When you wake up in 20 years and you look at the growth in the industry, the bulk of the growth will be in the mid-market. Why? Demographics. The middle class is the bulge bracket that will drive travel demand.”
Hilton, like all of its competitors, has hotel brands ranging from budget-level with the likes of Garden Inn and newcomer Spark, to luxury flags such as Waldorf Astoria and Conrad.
At Skift Global Forum last year, Nassetta said that while Spark isn’t “the sexiest” brand in Hilton’s line-up, it does present some of the strongest growth opportunities thanks to the middle class.
Skift CEO and founder Rafat Ali put demographics top of the list last year in a piece on the future of travel. And we’ve identified a Megatrend around how travel is responding to demographic shifts.
Focus on the Middle Class
Also speaking in Riyadh, Marriott CEO Anthony Capuano agreed hotel operators must focus on travelers of all income levels.
“All of us are seeing the bifurcation of the consumer. We’re seeing high-income households travel at the upscale end, and the lower-income households also have an appetite to travel. That’s why we’ve all built portfolios across multiple price points. The pandemic created a bit of a pause, but we’re all talking about an explosion of the middle class.”
Capuano said this laser focus on the middle class isn’t just “intuition,” it is driven by piles of consumer data Marriott and other operators gather from users spending with their branded credit cards.
He added: “That’s not our intuition, all of us have big branded credit card platforms so we have terrific data on consumer spending real-time. That appetite to prioritize travel and experiences is across demographics.”
