Here Come the Kid$

By Bonnie Knutson Professor, The School of Hospitality Business/MSU | July 17, 2016

When most of us were youngsters, the notion of children having much say in what our parents did, what they bought, or where the family stayed when it went on vacation was in the realm of comedian Rodney Dangerfield. They got no respect. Now, kids are – or should be – on virtually every brand's radar screen. Overall social and cultural trends have bolstered kids' monetary muscle. Consider the dramatic rise in their purchase power.

Back in the 1960s, children influenced about $5 billion in family purchases. These were the days of children being seen but not heard. Their primary tool of influence was what my parents called "nagging." We called it wearing them down. By the 1980s, parents began to involve their children more in family decisions so their influence power jumped to more than $50 billion. Today, try going out to grab a bite to eat or deciding whether to go to a theme park, dude ranch or stay in a historic hotel in a big city without talking with your kids and you' can be doomed to a really bumpy vacation.

Today's family is an inclusive family, with parents empowering and encouraging their kids to be involved in decisions across the board. If hotels have not yet realized the potential of this market trend, business sure has. Companies spend more than $1.2 Trillion (That's with a "T"!) annually marketing to children because they represent a dynamic retail market, influencing an estimated $500 billion in total retail spending. Marketing to children has evolved from the initial days of "secret decoder rings" and Cracker Jack toys. Today, kids are considered to be customers in their own right. Ask Disney. Ask Noggin.com.

Ask McDonald's, Nike, or True Jeans. They represent an important demographic to marketers because they have their own money, they influence what their parents do, where they go, where they stay, and what they buy. Plus they are the adult consumers of the future. Trends such as smaller family size, multi-generational families, dual incomes and postponing having children until later in life mean that parents (and grandparents alike) have more disposable income and are willing to spend more for and on their kids. Add to this the role guilt can play because parents are time-stressed and you have a potential gold mine for your hotel. Sound familiar?

YouGov research found that children are "active decision makers in family economies" across a lot of decisions – including travel. They also found that young children can hold as much persuasive power as teens. From a young age, children's preferences influence where the family goes and where the family stays 87% of the time. And this is true across geographic markets too. No matter where you live in Europe or the U.S., for instance, the vast majority of parents give their children some say in deciding where they want to go on a trip, whether for a weekend getaway or a more traditional family vacation.

Interestingly, in the U.S. about 71% of parents say they ask for their kids' input, but this jumps to 94% internationally. So just where are your guests coming from? Parents view kids' input as a way to ensure that their children get more out of the family's travel experiences. And it's also a way to reduce the nagging quotient too. As Brian Sharples, HomeAway CEO, quipped, "The whole family is now invested in the experience, with kids bringing their own travel preferences to the table." Parents are listening. So are hotels, resorts, spas, cruise ships, Airbnbs, and Bed & Breakfasts. Are you?

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Mobile Technology: The Future is Now

Mobile Technology continues to advance at a relentless pace and the hotel industry continues to adapt. Hotel guests have shown a strong preference for mobile self-service - from checking-in/out at a hotel kiosk, to ordering room service, making dinner reservations, booking spa treatments, and managing laundry/dry cleaning services. And they also enjoy the convenience of paying for these services with smart phone mobile payments. In addition, some hotels have adopted a “concierge in your pocket” concept. Through a proprietary hotel app, guests can access useful information such as local entertainment venues, tourist attractions, event calendars, and medical facilities and services. In-room entertainment continues to be a key factor, as guests insist on the capacity to plug in their own mobile devices to customize their entertainment choices. Mobile technology also allows for greater marketing opportunities. For example, many hotels have adopted the use of “push notifications” - sending promotions, discounts and special event messages to guests based on their property location, purchase history, profiles, etc. Near field communication (NFC) technology is also being utilized to support applications such as opening room doors, earning loyalty points, renting a bike, accessing a rental car, and more. Finally, some hotels have adopted more futuristic technology. Robots are in use that have the ability to move between floors to deliver room service requests for all kinds of items - food, beverages, towels, toothbrushes, chargers and snacks. And infrared scanners are being used by housekeeping staff that can detect body heat within a room, alerting staff that the room is occupied and they should come back at a later time. The January Hotel Business Review will report on what some hotels are doing to maximize their opportunities in this exciting mobile technology space.