Millennials to fuel tourism growth

Agarwal ... millennials believe in the

Heraclitus of Ephesus was a pre-Socratic Greek philosopher, while many digital natives might not have heard of him, I am sure the profound statement that he made in around 500BC is actually relevant in today’s day and age. Heraclitus proclaimed that ‘the only thing that is constant is change’, a statement that aptly describes the present wave of change and growth we see in the Middle East region.

Today, the Mena region is proving to be one of tourism’s biggest success stories. While several global markets are on a downward spiral, the story here is quite refreshing as it brings a spectrum of opportunities to the industry. I strongly believe that the hotel accommodation category is poised to become the single-largest contributor to the tourism industry in this region.

For instance, in Dubai, everything is evolving in terms of its infrastructure and by extension the hospitality sector. Dubai’s ambition to attract 20 million visitors for Expo2020 and the emerate’s globally renowned tourism destinations are all gearing up to put its hospitality industry into a sustainable growth trajectory. Dubai’s room supply is also expected to reach 132,000 by the end of 2019.

If you look at the other neighbouring countries, the Muscat International Airport signals Oman’s tourism intentions. It aims to welcome more than 20 million passengers in a year, with plans to scale it up to 48 million passengers in the near future.

On the other hand, the decision to move the nation from oil dependency was the driving force behind Saudi's new-found focus on its tourism and leisure industry. 

The sweeping reforms in Saudi Arabia have further fuelled the demand for hotel rooms in the kingdom. The country that has now started issuing tourist visas for the first time in around eight years and this will give the tourism sector the much-needed boost. This also means that there will be a relatively large movement of youth population within these GCC economies.  They will have a voice, and an opinion and the hospitality industry stakeholders cannot ignore them, but to listen to them and address their needs.

Also, Saudi Arabia is investing close to $49 billion towards tourism projects per year until 2020. The objective of this investment is to develop and nurture both its existing tourism destinations and also build new ones. This is yet another bold move by the leadership of the kingdom that will further strengthen their hospitality industry.

As per market research firm FutureCast, the millennials, defined as those born from the early 1980's to 2000, spend around $200 billion on travel each year. It is interesting to observe the emergence of these new trends as the decision-making power shifts mainly to the millennial generation. With around $6 trillion in disposable income, they have more funds to spend on their passions. Being a millennial myself, I can say that the motivations are different, there is always that fire in the belly to do something – explore the unknown.

So what’s driving them? Well, it is technology adoption and the ease of mobile-enabled transactions that is fuelling new trends in consumer behaviour.

Unlike a few years ago –when the use of cabs was to go to an airport or a momentous occasion, today’s generation does not hesitate to book a taxi using their mobile apps even to travel few 100 metres. 

Today a vast majority of people are choosing to make and execute plans on a real-time basis. While leisure and business sectors are the primary demand drivers, new travel patterns are emerging with online hotel brands enabling last-minute bookings and pay-at-hotel options.

We have also recently seen a growing trend, where people choose to stay in a hotel within the city of their residence for a weekend getaway. Therefore, the industry is not just growing with the help of international tourists, but also the local audience.

This trend is catching up in the UAE and other GCC countries as well. With affordable pricing and other attractive offers from hotels, this concept is going to grow further in the days to come.

Globally, we are also seeing young millennials opting to stay at a nearby hotel for non-travel-related reasons such as, working late and wanting to avoid long travel times. For instance, if there is a show in Sharjah that stretches to more than a day, then it makes more sense for business travelers to stay back in Sharjah at a hotel of their choice.  This will surely help them use their time productively and avoid mundane commutes.

Often perceived as unpredictable, gadget-friendly and self-absorbed, this generation has been criticised for spending their money than saving to buy a house.  With rising purchasing power, they don’t want to be tied to one place.  They want to see the world and continue to build an enriching lifestyle, not just for themselves but people around.  They believe more in the ‘now’ economy. Something that resonates with me.

So, we seek something new and innovative all the time – which includes travel. This is good news for tourism and the overall hospitality industry.

‘Impulse planning’ is a clear trend, especially among millennials. Despite last-minute decision-making, travellers’ expectations in terms of service, facilities, and experience are growing more pre-determined and non-negotiable.

When we spoke to our guests, they listed Wi-fi, breakfast and room hygiene as their primary expectations. In other words, they want to get the basics right.

Thus, the onus on travel partners such as hoteliers and those offering travel-related services is to ensure consistent, high-quality service delivery. This phenomenon of impulse planning while seeking standardised services represents an attitudinal shift in millennials. 

These new age consumers want complete freedom to choose, change and decide at a moment’s notice, and at the same time, the quality and consistency of service cannot be compromised.

The millennials are already here, and they know exactly what they want. So, is the Mena hospitality sector gearing up to serve this new and evolved group of customers? Well, absolutely yes.


* The author is founder & CEO of OYO, which has recently opened shop in Dubai