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Changing Consumer Attitudes, the Impact on the Hospitality Industry

Changing Consumer Attitudes, the Impact on the Hospitality Industry. YOU KNOW YOU ARE LIVING IN 2005 WHEN:. 1. You accidentally enter your password on the microwave. 2. You haven’t played solitaire with real cards in years.

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Changing Consumer Attitudes, the Impact on the Hospitality Industry

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  1. Changing Consumer Attitudes, the Impact on the Hospitality Industry

  2. YOU KNOW YOU ARE LIVING IN 2005 WHEN: 1. You accidentally enter your password on the microwave 2. You haven’t played solitaire with real cards in years 3. You have a list of 15 phone numbers to reach your family of three 4. You email the person who works at the desk next to you 5. Your reason for not staying in touch with friends and family is that they don’t have email addresses 6. You go home after a long day at work and still answer the phone in a business manner 7. You make phone calls from home and accidentally dial “9” to get an outside line 8. Your VCR is now the 8 Track of the 21st century and you are thinking you need a TV no thicker than an encyclopedia. What are you going to do with your entertainment center armoire? 9. Leaving the house without your cell phone, which you didn’t have the first 20 or 30 (or 60) years of your life, is now a cause for panic and you turn around to go and get it. 10.You start tilting your head sideways to smile :)

  3. Attitude (ǎt/ ĭ-tōōd) noun A state of mind or a feeling, disposition Synonyms: position, posture, sentiment

  4. WHAT DOES THIS MEAN? YOU CAN’T APPLY OLD NORMS TO NEW ATTITUDES

  5. THIS REQUIRES THAT YOU KNOW YOUR AUDIENCE, WHAT THEY THINK AND FEEL

  6. San Francisco, Demographics

  7. Madison, Wis. Demographics

  8. Psychographics Psychographics measures peoples propensity to buy People with the same demographic profile may have radically different buying patterns

  9. Top Ten Lifestyle Propensities SanFranciscoPsychographics

  10. Madison, Wisconsin • Top Ten Lifestyles

  11. GENERATIONAL MARKETING • Baby Boomers • VIP services • Forever young • Nonconformists – unless it’s serving them • Participants • Adventure • Diversity – pack lots into one vacation • Spas; holistic destinations • Nostalgia

  12. GENERATIONAL MARKETING • Generational Marketing • How we act depends on our generation • Influences • purchase decisions • brand awareness • travel experiences • Opportunities and Challenges • Not the only factor influencing people

  13. GENERATIONAL MARKETING • Matures (1901-1924, 79-102) • Silent Generation (1925-1942, 61-78) • Baby Boomers (1943-1960/2, 43-60) • Gen X (1961/3-1981, 22-42) • Generation Y (1982-2000, 3-18) • Generation 9/11 (2001-present, 2 )

  14. GENERATIONAL MARKETING • Baby Boomers • “Me” generation • Put individual desires ahead of good of a group; job ahead of family • Huge economic gains • Brand savvy • Feel the country owes them • Resent authority • Passion for introspection and self-enlightenment

  15. GENERATIONAL MARKETING • Generation X • Being authentic means showing savvy • Distrustful • Real • Wired • Unafraid to try something new, challenging • Family • Spiritual

  16. GENERATIONAL MARKETING • Generation X • Extreme sports • Depth of purpose • Eco-tourism • Finding themselves in challenges • Brands are meaningless • Really smart, savvy, skeptical • Need one of their own to talk to them

  17. GENERATIONAL MARKETING • Matures • On the road from scout meetings to Sun City, this generation… • Triumphed over the Great Depression • Vanquished the Germans and Japanese • Built suburbs and shopping malls • Instituted the New Deal • Built interstate highway system • In 1927, Charles Lindbergh made the first transatlantic flight • … accomplished their goals through HARD WORK

  18. GENERATIONAL MARKETING • Matures • Tremendous growth in country • Feel they owe the country • Look for value • Enjoy community, commonalities, connecting • Getting to the end of their travel years

  19. GENERATIONAL MARKETING MaturesBoomersXers Defining Idea Duty Individuality Diversity Celebrating Victory Youth Savvy Success because Fought hard Were born, Have two and won therefore should jobs be a winner Rewards because Earned it Deserve it Need it Work is Inevitable Exciting Difficult obligation adventure challenge Leisure is Reward for Point of life Relief hard work Education is A dream A birthright A way to get ahead

  20. HOTEL MARKET TRENDS • Favorable near term and medium term hotel market dynamics • Favorable supply/demand dynamics for the next 3-4 years (probably 4-6) especially in major urban markets • New supply additions look to be very moderate for the next couple of years • Some markets actually seeing reduction in supply due to condo conversions • Less reliance on 3rd party distribution • Pricing power is finally returning • Seller’s market • Electronic marketing focus

  21. YOU MUST KNOW HOW YOUR CUSTOMER’S CULTURE CHANGES OVER TIME

  22. You must know how your audience views and is reacting to the trends that flow through the marketplace

  23. HOW DO YOU RECOGNIZE CHANGING CONSUMER ATTITUDES?

  24. Fad Vs. Trend • Fad • Whimsical pop-culture reflection • Short-lived or little potential for long-term relevance • Niche or sub-segment focused • Trend • Links to socio/demographic data and cultural forces • Evolved over time with potential to evolve further • Can cross segments and geographies with relatively broad appeal

  25. EIGHT TRENDS AFFECTING CONSUMER ATTITUDES TOWARDS HOTELS • Increasing Affluence and Style Consciousness 2. “Trading Up” 3. “Experience Economy” 4. Mass Customization / Personalization 5. Increasing Number of Women Travelers 6. Increasing Interest in Wellness 7. Internet Changing Buying Behavior 8. Authenticity/ Homegrown

  26. Increasing Consumer Affluence And StyleConsciousness • Consumers are becoming more affluent which is contributing to an increase in style consciousness Michael Graves

  27. “Trading Up” Consumer Behavior Customers willing to spend more to have a better/more memorable experience… ……..while rabidly pursuing bargains on products perceived to be commodities

  28. Emergence of “Experience Economy” • Experience becomingmore important attribute when choosing products • We are evolving toward an “Experience Economy” Agricultural Industrial Information Experience

  29. EXPERIENCE ECONOMY • People are collecting experience “Merit Badges” • Vacationers are collecting experiences rather than consuming things. It is no longer what one has, but what one does. Destinations are about the experience rather than the attributes. Within experience collecting, the following values exist: a.     Learning b.     Growth c.     Freedom d.     Exhilaration e.     Fun

  30. Mass Customization/Mass Personalization Increasing rejection of “one size fits all” brand/product approaches CRM Becoming More Important!

  31. Mass Customization/Mass Personalization • Fingerprinting • People, especially boomers, are on a search for personal identity. This is the one area where they seek affinity with groups and others with similar quests. This explains the rise in personal coaches and holistic journeys. Affinity travel is the niche of the future. Be a dream maker. Fulfill a fantasy. The values that relate to Fingerprinting are: a.Consumer identity b.Individuality c.Do-it-yourself d.Affinity – paring with others of like mind e.Self-esteem

  32. An Increasing Number Of Woman Travelers

  33. WOMEN TODAY • Today’s Female Customer – Multiminding vs. Multitasking • Women’s buying has grown tremendously and is expected to increase dramatically in coming years • Women Control 80% of household buying decisions • The US economy is increasingly female-driven • $3.3 trillion in consumer spending • Make 62% of all car purchases • Take more than 50% of all business trips

  34. Increasing Consumer Interest In “Wellness”

  35. WELLNESS: NATURAL HIGH • People are seeking a natural experience and seek balance in their hectic lives. Vacationers search for an experience that allows them to unplug from hype and stress. This is the halo of rural, simple life. Spas, self-discovery camps, spiritualism, eco-tourism all fit within this area. a.Well-being b.Fitness c.Balance d.Vitality e.Conservation f.Spirituality g.Environmentalism

  36. SENSE OF AUTHENTICITY / HOMEGROWN • People have a passion for the real America and authentic experiences. Arts and crafts and nostalgia are important. Within this area experiences such as antiquing, authentic foods, backroad experiences, kitsch, festivals and rural travel are important. a.Authenticity b.Rediscovering the familiar c.Honoring your roots d.Curiosity e.Discovery f.Romance

  37. The Internet is leveling playing field for independent/boutique products and companies The Internet Is Changing The Rules Of The Game ….Small players can compete effectively with bigger players by creatively using the internet

  38. INTERNET USAGE • 56% of the 213.9 million adults in the U.S. currently use the Internet - 120 million adults (2004) • Usage has flattened • 82% indicate they are travelers • Among the 145.7 million past-year travelers, 67% use the Internet • Frequent travelers (5 or more trips) have high likelihood of using – 74%

  39. INTERNET USAGE FOR TRAVEL PLANNING - 2004 • 65% of online travelers say they consulted the Internet to get information • 26% used Internet for business travel planning (similar to 2003) • 94% of trips planned were for leisure • 76% did trip planning online – 69% in 2003

  40. CONSUMER INTERNET USAGE 2003%2004% Used internet to… Obtain travel info and pricing 57 65 Make a travel booking 38 45 Hotel reservations 67 73 Airline reservations 65 64 Car rental reservations 29 32 Complete vacation reservations 21 20 Average number of sites visited N/A 3.9

  41. INTERNET USERS • Women 51% • Men 49% • Boomers (35-54) 47% • Married 66% • Children at home 42% • Employed full-time 62% • Annual HHI $73,000

  42. E-MARKETING • Travel suppliers such as hotels, airlines and online travel agencies have been successful in using email marketing to communicate with current and potential customers (whether or not booked travel) • 37% of all online travelers (36 million) have registered or subscribed to travel websites • 47% say they have registered with three or more travel websites

  43. E-MARKETING • Online promotions seem to have an influence over consumers • In 2004, 11% of online travelers claimed they had taken a trip they otherwise would not have taken based on an emailed travel promotion, discount or offer (the same share as in 2003)

  44. WHY IS ALL OF THIS IMPORTANT? BRAND OR PRODUCT AWARENESS IS NOT ENOUGH TO INSPIRE BRAND LOYALTY….

  45. TODAY WE MUST UNDERSTAND OUR CUSTOMERS’ ATTITUDES IN ORDER TO SPEAK TO CUSTOMERS IN THE WAY THEY WANT TO BE SPOKEN TO CUT THROUGH THE CLUTTER

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