Trends In Consumer Preferences For Sustainable Travel & Tourism

Since 2003

ESRC Festival Of Social Science@ Centre for Business and Society

Manchester Metropolitan University Business School

“Resolving The Conflict Between Consumerism & Sustainable Development”

@MikeBallEco

INTRODUCTION• TASK: to resolve the disparity between consumerism and

sustainability• One way we can do this is improve the marketing of

sustainable tourism• We will examine a destination, South Africa, and two

demographic cohorts, Baby Boomers and Millennials• The purpose being so that we can identify what trending

consumer preferences there are that:a) we can direct sustainable tourism businesses along in order

to maximise market exploitation, andb) to identify negative trending consumer preferences so that

we can adopt mitigating market strategies against these particular effects

@MikeBallEco

South Africa• 1996 White Paper The Development And Promotion

Of Tourism In South Africa identified Responsible Tourism as the guiding principle for development of tourism in South Africa

• 2002 Cape Town Declaration On Responsible Tourism• In 2003 South Africa published its National

Responsible Tourism Guidelines• A national policy of Responsible Tourism was

launched in 2009@MikeBallEco

History of involvement with Responsible Tourism

Foreign & Tourists Arrivals To South Africa Versus Global International Tourist Arrivals, 2003-2013

Source: South African, Tourism Strategic Research Unit; UNWTO Tourism Highlights 2014 EditionNotes: n/a = not applicable; prior to 2009 the measurement of arrivals was of All Foreign Arrivals, after 2009 the measurement was changed to Tourist Arrivals

@MikeBallEco

@MikeBallEco

Tourism From Lesotho• A key characteristic of South Africa inbound market - the majority

of arrivals originate from neighboring countries• In 2013 arrivals from Lesotho decreased by -9.1% due to domestic

economic problems and two successive crop failures• Most Africa Land arrivals are Visiting Friends & Relatives (VFR)

while another significant proportion come across the border on Shopping For Business i.e. trade in small household items, foodstuffs, clothing, etc

• In 2013 11.4% of Africa Land arrivals crossed the border on Shopping For Business

• In 2012 24.6% of all Lesotho’s arrivals crossed into South Africa for Business Shopping, by 2013 this had fallen to 12.2%

• VFR and Shopping For Business have limited or lesser direct contact with sustainable tourism products and services

@MikeBallEco

• 45.9% of arrivals from Europe came on holiday

• 33.8% of arrivals from Asia & Australasia on holiday

• 43.9% of arrivals from the Americas came on holiday@MikeBallEco

“In 2013 growth in arrivals was strong in all air markets”

Total Foreign Direct Spend (TFDS), South Africa, Vs Global Tourism Receipts,

Y-on-Y Growth, 2013-2010

Source: South Africa Tourism / UNWTO

@MikeBallEco

“In all years except 2011 – the year after South Africa’s World Cup and therefore a pretty tough act to follow, air market Y-on-Y growths have exceeded global rates”

Total Foreign Direct Spend By Tourists,All Regions, 2011-2013

• In markets where leisure forms a majority proportion of arrivals, TFDS contributions were strong over 2011-2013• However it wasn’t all good news • TFDS revenue from Europe grew from 2012 to 2013, but Average Spend Per Tourist declined by -2.1%• TFDS also grew from the Americas, however Average Spend Per Tourist decreased by -0.9%• TFDS also grew from Asia-Australasia, this market though saw a R500 increase in Average Spend Per Tourist• Arrivals from the two main traditional source markets are still resorting to cost-saving strategies on holiday

@MikeBallEco

Source: South African Tourism

Baby Boomers• Born between 1946 to 1964 (today aged 50 – 68)• British Baby Boomers drive spending on UK’s high streets• Going forward will continue to be important for marketers and

brands to court• 18.3 million over-55s in the UK – by 2018 this number will

increase to over 20 million• The UK population is ageing rapidly, over-55s expected to grow

by more than 8% over the next five years• This is a large growing market with healthy household finances,

high home ownership, savings and investments• 54% are ABC1 social grade; 67% fall into the Wealthy Achievers,

Urban Prosperity and Comfortably Off ACORN group

@MikeBallEco

ACORN is UK specific demographic segmentation tool, it segments the UK population into 6 main Categories and then within these categories there are a number of sub-categories, these are referred to as Groups (of which there are 18) and Types (of which there are 62)

A survey of Over-55s were asked:

@MikeBallEco

• 45% of over-55s were planning to travel or take a holiday in the next 12 months

• Up from 2012 when 40% were planning to travel or take a holiday

• Clearly a sign of growing spending confidence.

• Holiday plans were especially strong amongst:• 55-64 year-olds (52%)• Over-55s ABs (62%)• Over-55s +£50,000 (74%)

“Which of the following, if any, are you planning to do in the next 12 months?”

• Proportions of people who went on any kind of holiday rises with household income

• This is particularly true of longer breaks• 79% of adults whose household incomes are in

excess of £50,000 have gone on a longer holidays compared with 62% on average.

• Baby Boomers, with a high proportion of retirees, are time-rich

• More importantly, can book holidays because they have household disposable income

• The aspiration rate amongst over-55s to go on holiday is especially correlated to household disposable income and is a more important factor than time available. @MikeBallEco

Financial Caution

@MikeBallEco

• Not all Baby Boomer trends are positive• Disposable incomes among many over-55s are stressed• Many have adopted cautious monetary outlook• 41% of 55-64 yr olds said they were budgeting more

this year (2013)• The highest proportion of all age groups• The ability to travel is strongly linked with disposable

income• Key driving factors:– Low economic confidence– Boomerang children

Low Price, High Quality

@MikeBallEco

• Key Consumer Trend - the disparity between seeking low prices and at the same time demanding quality

• Consequence: sustainable tourism products and services are generally high quality high price

• An Over-55s survey was asked: “Thinking about shopping for yourself and your family, which of the following are most important to you?”– low prices were important to 48%– And 48% did not want to compromise on quality of

products they bought

Wealthy Baby Boomers

@MikeBallEco

• Baby Boomer market is highly differentiated• Many Baby Boomers belong to higher socio-economic groupings

e.g. High Net Worth Individuals (HNWIs)• Amongst UK Ultra-affluent and HNWIs taking holidays is common• All went on at least one holiday in the year to June 2012• 46% went on five or more holidays• UK affluents are prepared to pay premium prices for holidays• 34% spent more than £8000 on holidays in the previous year• 67% believed that comfort and service were worth paying extra

for when travelling• Higher holiday spending is especially high among women UK

affluents and those aged 51-60• 38% having spent these higher amounts• UK affluents display strong tendencies towards family activities• Target market for high end family travel

Over-55s Attitudinal Differentiation

• 7.3 million UK adults aged 55+

• Four in ten aged 55-64

• 57% in the C2DE socio-economic gradings

• 56% are women, 44% are men

• 37% are separated, divorced or widowed

• 24% of Moderate Means and 21% of Hard Pressed ACORN groups

• 49% planning to travel or go on a holiday versus the average of 60%

• Low price point is a clear purchasing priority

• 53% wait for products to go on sale before buying

• Only 3% didn’t mind paying more for higher quality products versus the average of 42%

• 6.3 million UK over-55s

• 65% married or cohabiting

• 48% are 55-64

• 62% are ABC1

• 67% own their houses

• 64% planning travel in the coming year

• The disparity between low price demands and high quality is at its lowest

• 64% willing to pay more for higher quality

• Only 14% will wait for products to go on sale

• 52% use the Internet daily

• 4.5 million UK adults aged 55+

• 59% females, 41% males

• Highest proportion of retirees and property ownership

• Nearly two thirds are ABC1s

• 28% households incomes in excess of £25,000

• 71% planned to go travelling.

• 92% preferred shops they know and 82% brands they know

• They are not opposed to paying more for higher quality

• 24% (versus an average of 9%) find online shopping complex

Family Orientated Prosperous Adventurers Lean Means

@MikeBallEco

The Millennials a.k.a. Generation Y“A large demographic approaching their peak spending and purchasing years”

“Millennial consumer influence as well as spending power will dramatically increase”

@MikeBallEco

• Born early 1980s – early 2000s• In the USA Millennials already outnumber Baby

Boomers by 79 to 76 million• By 2030 there will be 22 million more US Millennials

than Baby Boomers• In the UK more than a quarter of the population are

Millennials• Many are leaders in the technology and media

industries

• Social Diversity - ethnically mixed, open-minded concerning family structure, many from e.g. mixed-race families, single parent families, alternative culture families, same-sex marriages, etc.

• Digital Natives – lived their lives in the digitally connected era, media and tech savvy from a very young age.

• Global Citizens - care about the environment, bettering lives of people, and improving society. Many Millennials are well travelled, cosmopolitan.

• Female Empowerment – live in much more gender equal environment, women Millennials expect the same treatment and opportunities as their male counterparts.

• Gregarious By Nature – family orientated, many are still dependents, Boomerang Millennials, Millennials with their own young families. Also Millennials value their friendships, online and in the real world.

• Participatory And Active – Millennials like to be involved and are hands-on when shopping, look for entertaining websites and appreciate channels that allow personalisation. An experiential generation, many are sporty and have active hobbies e.g. shopping, surfing.

• Educated – better educated, not dependent on an authority figure e.g. parent, manager or teacher, to gain access to information.

@MikeBallEco

early 1980s - early 2000s

Millennial Travel Motivators

@MikeBallEcoNB: A psychographic index is a scaled measure of personal characteristics (e.g. personality traits, lifestyle preferences, interests, values, beliefs, attitudes, opinions) as opposed to physical traits (e.g. age, gender, height).

Millennial Differentiation

“Whilst the Baby Boomer market is a highly differentiated one, only recently has a degree of Millennial market

differentiation started to appear”

“One of the problems when making analyses of non-differentiated markets is that any identification of trends

tends to be broad”

@MikeBallEco

The Boomerang Generation“There is a clear differentiation based on spending power … the youngest Millennials are still dependents living at home while older Millennials with young families and who are beginning to scale the career ladder, are beginning to enter their peak spending years.”

• The emergence of the Nouveau Poor is a consumer macro-trend• Continuing low economic confidence is driving ‘downward mobility’ among middle-class consumers, who have reacted by recalibrating lifestyle expectations for a lower-class reality• Amongst the Nouveau Poor Boomerang Millennials are a sizeable contingent• They are a target for affordable, pared-down, quality products and services that deliver the comfort and familiarity they’ve been accustomed to• Key compatible sustainable tourism areas are: food, the backpacker-flashpacker circuit, city tourism, and new accommodation models

@MikeBallEco

Marriott Hotels

• Baby Boomer segmentation is a reflection of personal finances or status in society

• Millennial differentiation is usually based on differing attitudes

• One such method is to divide Millennials up into tribal identities

• In 2013 Marriott Hotels launched its Travel Brilliantly campaign

• As part of the campaign they surveyed lifestyle habits of UK 18-35 yr olds and identified five Millennial Tribes

@MikeBallEco

Millennial Tribes Typology

“Early adopters of hi-tech gadgetry and digital inventions, fit, sociable, fashionable males, they are well travelled and often use their tech prowess to

create start-ups”

• 58% are interested in fashion• 23% love shopping• 57% work out at the gym or go running regularly

Jason Bradbury, a TV presenter and author recently named Gadget Personality of the Year by T3 Magazine. Jason has flown to the four corners of the globe to research the science and

technology of the future

@MikeBallEco

DESIRABLE DIGERATI

Marriott also defined a tribe leader for each of the tribes:

“Fashion forward, savvy, self-employed, likely to have had a career change after having kids to fit around their lifestyle. They like to blog and engage via social media,

many have their own websites. They tend to work alone and have a passion for fashion”

• 70% place huge import on personal image, they shop in vintage shops, charity shops and eBay• Interested in the environment, 69% regularly recycle• Avid mini breakers taking up to 10 UK trips a year

Tribe Leader: Katie Piper, author, speaker, TV presenter, columnist, and charity campaigner. She rebuilt her life after surviving a brutal acid attack and set up her own charity, The Katie Piper Foundation

@MikeBallEco

FASHIONISTA MUMPRENEURS

“fitness super-fans who thrive on the challenge of physical competitions.Keen sharers on social media,

Competitive Challengers travel in groups and are always on the look out for adventure, they are driven people who take trips all over the world to take part in competitions”

• Prefer adventure holidays, with a third opting for backpacking trips• 27% aren’t interested in technology apart from listening to music• 1 in 4 describe themselves as very energetic

TRIBE LEADER: Danny Care, rugby union, Harlequins and England. His passion, gritty determination and talent, has seen him rise to be one of the best players his age

@MikeBallEco

COMPETITIVE CHALLENGERS

“Lovers of the Selfie and social apps, these well-groomed, young, carefree spirits prefer to party at home

or away, rather than pursue anything cultural or academic”

• 60% are always up for a good party• They have short attention spans and high self-esteem• Almost 40% said they rate themselves as attractive and well groomed

TRIBE LEADER: Victoria InTheFrow, is a Celebrity Blogger, fashion doctorate, graduate and lecturer

@MikeBallEco

SOCIAL MEDIA SAVVIES

“In the city by day, cookery by night, found at food markets at the weekend.

They have a gift for numbers but a passion for all things foodie.A growing number ditched their lucrative jobs to start up food

related businesses”

• 73% say they dedicate large amounts of spare cash towards food

• 53% use social media to read about food

TRIBE LEADER: Luiz Hara is a former investment banker turned chef and travel writer. Host of the #Nikkei Supper Club. Born in Brazil to Japanese and Italian parents and educated in the UK

@MikeBallEco

FINANCIAL FOODIES

@MikeBallEco

Marriott’s ‘Travel Brilliantly’Concept Guestroom

• An example of how all these tends can be fed into marketing• Marriott incorporated their differentiation system plus a number of themes mentioned earlier• e.g. experiential participation, active involvement, tribal digital connectivity, etc• Built a concept hotel guest room of the future• Tribe Leaders each designed a room• Consumers were asked to vote on the best features designed by the Tribe Leaders• The winning best features were built into Marriott’s concept guest room