Mr. Schuurman MBA

Diversity Issues

Exploring New Markets: The Gay & Lesbian Opportunity

By Darrell Schuurman MBA, Co-Founder, Canadian Gay & Lesbian Chamber of Commerce

The hotel industry, and the tourism industry in general, has changed dramatically over the last several years. Everything from war, terrorism, the economy, the fluctuating exchange rates, and a variety of other negative travel influencers have made the industry much more volatile and challenging than ever before. The fight for market share has gotten tougher, and hotels have started to see the need to find new ways to grow that diminishing share.

So in an industry that remains increasingly competitive, how do you prevent a decrease in your market share, and what opportunities are there for you to grow your market share? One way is through diversification in your target markets. Hoteliers and the tourism industry need to look at alternative sources to tap into and to draw on.

The gay and lesbian market is one market that hotels and other tourism-based companies have for too long overlooked, or simply chose to ignore. But can the industry continue to ignore this market? Can you? The simple answer, in my opinion, is no. And why would you want to?

Most hoteliers understand the importance of diversifying their markets, but many aren't completely sold on the gay and lesbian market. I've identified three main reasons for why you and your hotel should choose to target this market.

1. Size of the Market

According to San Francisco based company Community Marketing Inc (www.communitymarketinginc.com), the US gay and lesbian travel market is worth an estimated $54.1 billion per year, or approximately 10% of the total US travel industry. Research shows that this market has a higher discretionary income, with 76% having household incomes above the national average. Not only do they have higher discretionary income, but they also tend to spend more when travelling. Is that really a market you want to continue to ignore?

2. Resilient Travel Group

Over the past year, the gay and lesbian travel market has proven to be less adverse to negative travel conditions. For instance, only 7% reduced travel over the past couple years due to terrorism and security concerns, and only 3% due to SARS. Is the fact that gays and lesbians have had to fight for their rights for decades directly correlated to making them more resilient travellers? Whatever the reason, this is a prime incentive for reaching out to them. Case in point. When Toronto was hit in 2003 with SARS, would having diversified into the gay travel market helped to reduce the devastation that the hotel and the tourism industry faced? For Wild Women Expeditions it certainly did, where 2003 was their best year ever. They are quoted as saying "In 2003, [business] went up 15 per cent, even while everyone else's U.S. business tanked". So yes, in my opinion, the depression that Toronto hotels faced could have been eased had the hotels, the hotel association, and the city itself had more foresight to have actively diversified into the gay and lesbian market.

3. Loyal Market

The third reason for targeting this market is that this is a loyal market. Gay and lesbian travellers seek travel destinations and businesses that they know are safe and inviting for them, and they support those businesses that support them. Research has shown that 94% of gay and lesbian consumers will purchase products and services from corporations known to be "gay friendly". Loyalty counts.

Still not convinced that this market is for you and your property? Looking closer at their demographics and travel habits, it's easy to see that, for many hotel properties, this market fits right into their overall target market. The following details about the gay travel market are from Community Marketing's 2003 online research (www.communitymarketinginc.com) on gay and lesbian travellers in the past 12 months:

Okay, sure, so this is all good, but do we want "gays" in our hotel? That may seem like an antiquated thought to some, but some tourism-based businesses still have misconceptions about what the gay and lesbian market is. In my opinion, this is not for the most part a case of homophobia, but more just a simple lack of awareness and understanding. Not only is this understanding important to overcome misconceptions about the market, but also critical for identifying their needs; without fully understanding the market, you will be unable to meet their demands and expectations.

This really applies when considering any new market. Case in point #2. Canada this year was granted Approved Destination Status by China, which simply permits Chinese residents to travel to Canada using a tourist exit visa. With China being one of the fastest growing economies in the world, recognition as an officially approved travel destination has huge economic opportunities for the Canadian tourism industry. Great news for the hotel industry, which expects a large influx of visitors from this new market. But it's also naive to think that hoteliers will reap the rewards without first finding out what this market wants and expects, or without becoming familiar with their culture. This is the same for the gay market. Hoteliers need to understand the market before they can expect to reach them and retain them.

So what does the gay and lesbian market expect and demand? In essence, the gay and lesbian traveller demands the same product and engages in similar activities as the "traditional" traveller, but they expect that their experience will be safe and open to them. If you want to attract the gay and lesbian market, you have to demonstrate to them that they are accepted, and that you can offer everything that they need. As with your traditional markets, new opportunities within the gay and lesbian market will continue to become available, such as the emergence of same-sex marriage and the new business that this presents. You have the chance to tap into these new opportunities providing you are aware of them and actively engage in them.

Market diversification offers a wealth of opportunities for the hotel industry. The gay and lesbian market is growing and becoming much more of an economic force. So why would you want to reach out to the GLBT traveller - because it makes good business sense!

In the next issue, I'll talk about how you can actually reach the gay traveller, a sort of "Gay Travel Marketing 101".

Darrell Schuurman is the co-founder of Travel Gay Canada, working towards improving economic opportunities for members through research, product development, and the promotion of Canada as an LGBT travel destination. Mr. Schuurman is also the co-founder of the Canadian Gay & Lesbian Chamber of Commerce. He has over 20 years experience in tourism, working in the accommodation, transportation, tourism services, and travel trade sectors of the industry. Mr. Schuurman MBA can be contacted at 416-761-5151 or darrell@cglcc.ca Extended Bio...

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