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Friday, June 24, 2016, 15:22

In search of unique experiences

By BONNIE WANG in Hong Kong

From airlines to hotels, Asia’s tourism industry must go online and mobile to keep up with the evolving needs of millennial travelers

In search of unique experiences
Young Chinese tourists taking a selfie at the ancient Golden Fort of Jaisalmer in Rajasthan, northern India, on Dec 6 last year. Millennials tend to avoid traditional destinations in favor of new or unique experiences.  (AFP)
The tourism industry may be booming but it is also changing, thanks in large part to an influx of tech-savvy, fast-moving, free-walking millennial travelers.

The emergence of Asia’s young and affluent travelers is boosting tourism globally but is also forcing operators and destinations to develop new strategies and offerings to tap into the needs of this new generation of tourists.

In broad strokes, millennial travelers are between 18 and 34 years of age. They are typically single and have a lot more time to travel and meet people.

Wouter Geerts, a travel analyst at Euromonitor International, said that millennials grew up with the global economic crisis, so value for money is very important to them.

“With the benefit of the Internet, weighing up different options to come to the best value alternative is becoming more prevalent,” he said.

“Millennials trade up for their hotel stay by trading down for their flight, ending up flying with a low-cost carrier while staying in a luxury hotel.”

This does not mean that high-end hotels have it easy, however.

Guest houses and alternative options, such as the increasingly popular Airbnb, are putting pressure on hotels to be more competitive. Airbnb is an online platform which enables property owners to list rooms for travelers to rent.

Millennials are also more likely to avoid traditional destinations in favor of new or unique experiences. This is good news for attractions along roads less traveled but bad for traditional options, which now have to work harder for each tourist dollar, particularly those of Chinese millennials.

Ethan Lin, cofounder of Klook Travel Technology, said that travel destinations have become more diversified in Asia. Hong Kong-based Klook helps tourists book travel experiences such as airport rides or tourist attractions at the last minute.

“Hong Kong and Macao used to be the first outbound station for Chinese travelers. More people (now) go to Japan and Southeast Asia, and they travel more frequently,” Lin said.

A case in point is Hong Kong’s Ocean Park, a marine-life theme park, which saw attendance fall 14 percent in 2015 from a year earlier.

Another popular destination, Hong Kong Disneyland, saw attendance fall 9 percent to 6.8 million visitors through the fiscal year 2015. While the drops cannot be solely attributed to the new preferences of millennial travelers, they are certainly telling.

Other destinations struggling to attract millennials are traditional shopping malls in tourist areas, which are losing out to local nature or cultural experiences.

Euromonitor’s Geerts said: “Activities like shopping are likely to become less important, especially to Chinese travelers.”

And overcrowded or heavily polluted cities may also fail to attract this new group of socially conscious travelers.

“Sustainability and healthy living are becoming more important decision-making factors as our understanding of climate change grows,” said Geerts. “Destinations which can tie in their sustainability with unique experiences are in a good position to benefit from the increase of millennial travelers.”

The upshot is that millennials want new experiences and are likely to avoid what is considered the norm.

On the Chinese mainland, for example, traditional hotels that have long focused on government guests and business conferences are feeling the pinch. They are now ramping up efforts to provide more online and mobile sales options and services while redesigning properties to attract younger customers.

“Hotels are reaching the millennial generation through an online and multi-platform presence, like the Marriott producing content-driven short movies to market their brand,” said Geerts.

French Kiss , one of the US-based hotel giant’s short movies, tells the story of two people who build their romance by taking a trip. It has been viewed more than 6 million times since being uploaded on YouTube last year.

Mobile sales are increasingly important to hotels, said Jeremy Kressmann, founder and CEO of Wanderlust Strategy Group, a travel industry marketing consultancy.

Hotels must focus on mobile platforms that provide more services, such as the booking of rooms and the ability to check in and out. These trends are unlikely to spell the end of hotels but are forcing hospitality groups to rethink their operations.

Chris Fair, president of hospitality industry experts Resonance Consultancy, said the new trends will bring long-term changes to the hospitality industry.

“People start to design (hotel rooms) in a more residential way, more like a living room. Good examples are Generator Hostels and Ace Hotels,” he said, referring to chains based in the United Kingdom and United States, respectively, which cater to millennials.

“Hotels provide space to let people work in the lobby with their laptop. You may see 50 people drinking and working on their laptops. It looks much like an office center,” Fair said.

While hotels and airlines adapting to this new generation of travelers may be rewarded for their efforts, other sectors are hurting.

At the top of this list are traditional travel agents. Last year, many small travel agents in the Chinese mainland merged with larger rivals and even Internet companies.

In Singapore, in the first half of 2016, only 80 travel agents sought out new operating licenses.

The number of new licenses issued is dropping, with smaller players pushed out by thin margins, stiff competition and the tendency by many millennials to bypass travel agents.

Zhang Xiuting, an industry expert who worked in hotels for many years, said: “Small agents can’t react quickly when millennials’ appetites change, and they don’t have adequate capital to develop new routes or new services.”

This shift is also evident in the massive growth of the online travel agent market, which grew 51 percent in China in the first quarter of 2016 alone with revenues of 6.46 billion yuan (US$1 billion), according to iResearch Consulting Group. The figure was 20.3 billion yuan for all of 2015.

Traditional travel agents have not yet suffered significant losses, but neither are they growing.

“These are millennials’ travel habits — freestyle. (They) book a trip as late as possible, (which is) also price sensitive,” said Lin of Klook.

Traditional travel agents still have advantages with good product packages and well-developed services, he said, but added that the market is becoming saturated. “Millennials are free walkers. They seldom book a trip with travel agents in the Asian market.”

Traditional travel agents have long lost their monopoly as providers of holiday destination information.

Fair of Resonance Consultancy pointed out the strong influence social media has on the sector. “Millennial travelers are influenced by reviews and recommendations, such as Qyer.com, a travel advice website in China,” he said.

And Wanderlust Strategy Group’s Kressmann noted that travel companies not making their products available online are set to lose. He cited car service companies Uber and Didi as examples of popular mobile platforms which travel services need to move toward.

“Moving towards more digital is an interesting trend,” he said. “Millennials are embracing messaging and digital (platforms). It’s important to be interactive.”

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