Holiday Inn 2015 Annual Report Download - page 13

Multi-generational families are a growing guest segment
the sharing economy to meet their
accommodation needs.
In addition, there has been a diversification
of family travel needs as a result of an ageing
population and changes to the traditional
family unit. Multi-generational families,
for example, are a growing guest segment,
with over a third of respondents in a 2014
US AAA survey planning to make at least
one multi-generational holiday in the
upcoming year.
Another trend we are seeing is the blurring
of business and leisure travel, with a
growing number of professionals adding
leisure days onto business trips.
Furthermore, as a result of these trends,
accommodation providers increasingly need
to cater for a more diverse set of guest needs
and expectations.
A more dynamic
competitive environment
These key trends are changing the
competitive landscape within the travel
Continually evolving
consumer needs
The demographic profile of our guests
continues to evolve and, in conjunction with
the developments in digital technology, these
trends are driving different accommodation
needs and stay expectations.
This is evident across all age groups, and
in particular amongst millennials, who
are becoming an increasingly important
guest group.
This group is also challenging some of the
well-established norms of travel by having
more flexible working patterns, seeking
more personalised and unique guest
experiences, and being more open to using
Trips per year by
millennials by 2020
(predicted):
320m
a 47% increase from 2013
(Source: Forbes)
industry. Hotels compete with each
other and with travel intermediaries
and companies offering alternative
lodging solutions, such as peer-to-peer
home rental companies.
While the long-term growth of branded
hotels has outpaced that of the home rental
market, some peer-to-peer home rental
companies have capitalised on the small
but fast-growing segment of urban
short- to medium-term rentals, offering
personalised, home-like stay experiences.
At IHG, we cater for these guest demands
through our extended-stay hotel brands,
boutique brand portfolio and branded
residences offer. We are also investing
heavily in our people to ensure they deliver
unique and personalised stay experiences.
Meanwhile, our proactive approach to
building preferred brands, targeted at
guest occasion segments, is enabling
us to enhance our competitive position.
Where the industry is heading
Major underlying drivers supporting
growth in our industry
At a local-market level, industry performance
is impacted by short-term economic and
political factors. However, in the long term,
growth in the global hotel industry is driven by
the following three major underlying drivers.
Economic
Long-term macroeconomic trends
substantially benefit the hotel industry.
Global GDP growth of circa 2.6 per cent per
annum in the last 10 years has contributed
to an increase in disposable income and a rise
in middle-class households, making travel
affordable for more people. This trend can
be observed in China, where the number of
households earning above $35,000 per annum
(a key income level, at which international
travel becomes accessible), rose by 21 million
from 2003 to 2013, with an additional 61 million
households expected to pass this threshold
by 2023.
Demographic
The growth of an ageing population, which
has the desire and means to travel, is another
favourable driver shaping the industry.
The global population over the age of 60 is
expected to increase from approximately 800
million in 2013 to 2 billion by 2050, increasing
overall demand for travel services.
Social
Increased competition and capacity amongst
airlines, lower fares, and the relaxation of
travel and immigration restrictions in many
regions are making international travel more
viable for more people. International tourist
travel is expected to increase by 3.3 per cent
a year from 2010 to 2030, reaching 1.8 billion
arrivals by 2030.
The Future of Chinese Travel
In 2015, we partnered with global research
company Oxford Economics to produce a
comprehensive report evaluating the
Chinese outbound travel opportunity.
In this report, we examine historical and
current trends in Chinese outbound travel
and how economic and demographic
developments will shape demand for
Chinese travel over the next decade.
Our industry-leading research provides
a unique insight into which countries, and,
for the first time, which cities, will benefit
most from significant growth in Chinese
outbound travel globally.
Visit www.ihgplc.com/chinesetravel
to download the full report.
11IHG Annual Report and Form 20-F 2015
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