SACO's CEO commercial Stephen Hanton says companies should start preparing now for how the world of travel will look in the next decade.
As we move firmly into the second half of this decade, it is crucial that we make plans to prepare for the next.
By the time we reach 2020, the much spoken of Millennial Generation (or Gen Y) will all be of working age, as will some of the older members of Gen Z which follow them. As we prepare our businesses to cater for them, it is important that we take account of some of the trends that are having a huge impact on the world around us.
At SACO we invested in independent research on ‘tomorrow’s traveller’ earlier this year to help us in that process. Any travel provider that fails to prepare, risks a product that will rapidly become unfit for purpose in the advancing 21st century.
The fast-paced urbanisation of our society is a crucial factor. The UN estimates that the global urban population is growing by 1.5 million people every week and that, by 2025, there could be 40 cities worldwide with populations of over 10 million. With these growing concentrations of people driving a sharing economy, it is essential that accommodation providers play their part in this by offering the means for guests to interact easily.
This is especially true for companies such as SACO which provides extended stays where the need to help guests integrate within a community and interact within it is all the more crucial. Our new breed of aparthotels launching next year will reflect that, with amenities such as uniquely designed common areas that reflect their locality.
The world’s population is undergoing massive demographic and social changes. By 2025, there will be another billion of us on the planet. Rising life expectancy, and declining birth rates in some countries, is exacerbating the effects of this change – in 2050, the average age in Nigeria will be 21 whereas it will be more than double that at 53 in Japan.
Not only will travel providers need to cater for this growth, but also for a world more mobile. The number of people being sent overseas as part of their employment has increased by 25% over the past decade – and PWC projects that it will grow by a further 50% by 2020.
At SACO, we are already seeing this trend first hand as our sales through relocation agents grows at an almost exponential rate. Ensuring that your product is available to a globally mobile population – both directly and through key intermediaries – is only going to increase in importance in the years ahead. An online presence that is fit for purpose today and tomorrow is crucial, and a key area of investment for us has been in a new mobile responsive website that is optimised for travellers on the move.
And of course technology will be a huge factor too. The technology firm Gartner estimates that there will be 4.9 billion connected objects in use in 2015, and that this will multiply five-fold to 25 billion by 2020. Equally significant are the number of devices owned by each person. This is estimated to grow from 1.7 per person at the end of 2014 to 4.3 per person by 2020.
Catering for multiple devices from multiple guests is the challenge for today and tomorrow. As the definition of ‘superfast wifi’ constantly changes to keep up with consumer demand, accommodation providers will need to keep pace with this battle for bandwidth. According to Ericsson, the average smartphone in North America consumes 2.4 gigabytes (the equivalent of about 10 hours of streaming video). By 2020, it is estimated that usage could rise nearly six-fold to 14 gigabytes a month.
As an industry, we need to be making that evolution now to ensure we’re ready for 2020, but the dividends it pays will come much earlier than that. Awareness levels of serviced apartments still have much room for growth according to recent research by Savills, and action now will help boost that to the point where we can realise our vision – a world where serviced apartments are at the heart of hospitality.
We live in exciting times, and we need to keep looking forward to ensure we have the 2020 vision we need.
Stephen Hanton, CEO Commercial, SACO