Gen Z Travelers Boost Hotel Revenue
Skift Take
Key Points
- Gen Z travelers are boosting hotel revenues, with significant increases in revenue and bookings for brands targeting this demographic.
- Short-term rental bookings in Paris are up due to the Summer Olympics, but rates are beginning to drop as hosts worry about unbooked units.
- TUI faces increased costs due to delays in Boeing deliveries but still reported a strong second quarter with a 16% revenue increase.
Summary
Gen Z travelers are significantly boosting hotel revenues, with brands like Generator and Freehand seeing a 15% increase in revenue and a 40% increase in bookings in cities like Miami, Madrid, and New York. This growth is attributed to the financial stability of Gen Z, who are better off than previous generations. Meanwhile, short-term rental bookings in Paris are up due to the upcoming Summer Olympics, but rental rates are beginning to drop as hosts worry about unbooked units. Europe's largest tour operator, TUI, faces increased costs due to delays in Boeing deliveries but still reported a 16% revenue increase in the second quarter.
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Episode Notes
This year’s Summer Olympics are boosting short-term rental bookings in Paris, writes Reporter Elizabeth Casolo.
Short-term rental bookings in Paris between July 26 through August 11 are up 46% compared to the prior two weeks, according to data analytics firm AirDNA. Bookings in Paris’ suburbs for the Olympics are up 112%.
However, AirDNA Chief Economist Jamie Lane said short-term rental rates during the Olympics are beginning to drop. Lane added AirDNA expects rates to continue falling because hosts will get worried their units aren’t booked.
Next, Generation Z travelers are spending big on travel — especially hotels, writes Senior Hospitality Editor Sean O’Neill.
Generator and Freehand hotel brands — both of which heavily target guests between the ages of 18 and 28 — saw revenue jump 15% in 2023 from the previous year. The two brands have seen bookings jump 40% this year in markets such as Miami, Madrid and New York. Alastair Thomann, CEO of the two brands, attributed that growth to spending by Gen Z travelers.
O’Neill notes Gen Z is financially better off than young people in prior generations, with youth unemployment in the world’s seven most well-off countries the lowest since 1991.
Next, Europe’s largest tour operator TUI is facing several challenges due to ongoing Boeing delivery delays, writes Travel Experiences Reporter Jesse Chase-Lubitz.
TUI CEO Sebastian Ebel said the company received fewer Boeing jets than expected, which drove TUI to extend leases on older aircraft. Ebel added that maintenance expenses associated with older aircrafts helped drive up costs for TUI. However, he said the tour operator expects to receive compensation from Boeing.
Despite the challenges brought about by delivery delays, TUI still had a strong second quarter. The company generated just below $4 billion of revenue, a 16% increase from last year.
Presenter/Producer: Jane Alexander
Photo Caption: Hotel brands are finding larger revenues from Gen Z travelers. Adobe Stock
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