Millennials & the Hospitality Industry

The hospitality industry has always been an essential part of our lives, offering a wide range of services that cater to our needs, whether it is for accommodation, food, or entertainment. With the rise of the millennial generation, the hospitality industry is witnessing significant changes in the way people spend money on its offerings. In this article, we will explore how millennials are spending money on the hospitality industry and the impact it has on the sector.

Firstly, it is important to understand that millennials have a unique spending pattern compared to previous generations. They are more inclined to spend money on experiences rather than material possessions. According to a study by Eventbrite, 78% of millennials would choose to spend money on a desirable experience rather than buying something desirable. This means that the hospitality industry, which is all about providing experiences, is well-positioned to cater to the needs of this generation.

Secondly, millennials are more tech-savvy and rely heavily on online platforms to make bookings and reservations. A study by Expedia Group found that 41% of millennials prefer to book their travel and hospitality services on mobile devices. This has led to the rise of online travel agencies and hotel booking platforms that offer convenience and flexibility in making bookings. Millennials are also more likely to leave reviews and feedback on online platforms, which can influence the purchasing decisions of other potential customers.

Thirdly, millennials are also more conscious of their health and wellness and are willing to spend money on services that promote well-being. This has led to the rise of wellness tourism, which is a subset of the hospitality industry that caters to the needs of health-conscious travelers. This includes services such as spa treatments, yoga retreats, and healthy dining options. According to a report by the Global Wellness Institute, the wellness tourism market is worth $639 billion and is growing at a rate of 6.5% per year.

Fourthly, millennials are also more socially responsible and are willing to spend money on brands that align with their values. This has led to the rise of sustainable tourism, which is a subset of the hospitality industry that focuses on minimizing the negative impact of tourism on the environment and local communities. This includes services such as eco-friendly accommodations, responsible tourism practices, and local sourcing of products and services.

Millennials are reshaping the way people spend money on the hospitality industry. They prioritize experiences, convenience, health and wellness, and social responsibility. The industry needs to adapt to these changing needs to remain relevant and competitive. It also needs to focus on leveraging technology to enhance the customer experience and provide personalized services that cater to the needs of this generation. The future of the hospitality industry will be shaped by the spending habits of millennials, and it is up to the industry to respond to these changes to thrive in the years to come.

Ted Fang Tera Capital – The Rise of China’s Hospitality Market

Ted Fang, Tera Capital, Tera Partners, Tera Realty (Tera Sothebys)

The Chinese hospitality market has seen remarkable growth in recent years, thanks to the country’s booming economy, increased disposable income, and a burgeoning middle class. China is now the world’s second-largest economy and is home to a population of over 1.4 billion people. As a result, the hospitality industry in China has become one of the most vibrant and dynamic sectors of the economy.

The hotel industry in China has seen significant growth in recent years, with more and more foreign hotel brands entering the market. According to a report by China Tourism Academy, the hotel industry in China saw a 12.6% year-on-year increase in revenue in 2018, with the total revenue reaching RMB 678.5 billion. This growth can be attributed to the rising demand for quality hotel services, increased tourism, and the explosion of the middle class.

The restaurant industry is another key sector of the Chinese hospitality market. Chinese cuisine is popular all over the world, and the demand for Chinese food continues to grow. The Chinese restaurant industry has grown rapidly in recent years, with a CAGR of 10.6% between 2013 and 2018, according to a report by Research and Markets. The report also forecasts that the industry will continue to grow at a CAGR of 8.5% between 2019 and 2023.

One of the unique features of the Chinese hospitality market is the emergence of the online travel agency (OTA) industry. OTAs have revolutionized the way people book travel and hotel accommodations, making it more convenient and accessible. The two major players in the Chinese OTA market are Ctrip and Meituan Dianping, with a combined market share of over 70%. The growth of the OTA industry has also had a significant impact on the traditional hotel industry, forcing them to adapt to changing market conditions.

China’s hospitality market is not without its challenges, however. One of the most significant challenges is the intense competition in the industry. With the rise of the middle class and increased disposable income, more players are entering the market, making it increasingly competitive. Additionally, the Chinese government’s policy on tourism and hospitality is constantly changing, creating uncertainty for industry players.

Another challenge for the Chinese hospitality market is the quality of service. With so many new players entering the market, maintaining a high level of service quality can be challenging. The high turnover rate in the industry also poses a challenge, as it can be difficult to retain experienced staff.

In conclusion, the Chinese hospitality market is a rapidly growing sector of the economy, driven by increased disposable income, rising tourism, and the growth of the middle class. The hotel and restaurant industries, as well as the online travel agency industry, are all key players in the market. While the industry faces several challenges, the potential for growth and profitability is significant, making it an attractive investment opportunity for both domestic and foreign investors.

Ted Fang Tera Capital Singapore

Ted Fang is the founder of Tera Capital.

*All information is subject to change without notice.

Ted Fang is a Singapore-based consultant and advisor . He is the founder of several companies, including Tera Capital, Tera Partners, Tera Realty (Tera Sotheby’s) and Tera Investments. He used to maintain a website, which provided information about his companies and their various projects.

Ted Fang, together with his brothers Harry Tan and David Tan, co-founded Frontier Group in 2003. Its main focus was the acquisition of the Days Inn master franchise for Greater China from Wyndham Worldwide in 2003. Under their leadership, the team successfully made Days Inn China the fastest growing mid-market hotel chain in China up.

Ted Fang was active in Tera Capital, Tera Partners, Tera Realty (Tera Sothebys) and Tera Investments from 2003 to 2021.

Ted Fang, Harry Tan & David Tan - Ted Fang Tera Capital - Founder