In light of several UK hospitality firms making the Sunday Times Virgin Fast Track 100 list, this week on the Htet Tayza Blog I ask: why is the hospitality industry experiencing a growth trend?
Sunday Times Virgin Fast Track 100 League Table
According to Big Hospitality Magazine, several lucrative hospitality ventures were featured recently among the list of fastest growing businesses on the Sunday Times Virgin Fast Track 100 league table.
R200 Restaurant Operator of the Year, Bills, landed at number 19 on the list, making it the hospitality sector’s highest showing on the league table. It amassed a compound annual growth rate of 108% over the last three years to £53.9 million.
Other hospitality ventures also featured highly on the list. The Alchemist Bar and Restaurant Group followed just behind at number 20. Meanwhile Brew Dog, a Scottish-based brewery and bar operator, ranked 40th, whilst nightclub owner Inception Group followed at 47th.
Explaining Away the Growth of the Hospitality Industry
In other words, hospitality ventures of every creed have experienced a standout year, typified by growth, in the UK. Look around the world and no doubt, you’ll find a similar story.
Taking a step back, we can provide many reasons to explain away the growth of the global hospitality industry. New technology enables easier travel, the economic recovery has provided households with more disposable capital etc.
However I believe the most prominent reason for the growth of the international hospitality sector relies on sheer demographics. The millennials are taking over, affording the industry the sheer customer volumes it needs to grow.
The Growth of the Millennial Market
Providing their thoughts for the fortunes of the sector at the onset of 2014, Ernst and Young explained why millennials are the future of the hospitality industry.
In their ‘Global hospitality insights: Top Thoughts for 2014’ report, Ernst and Young explained: ‘With their oldest members only 33 years old, approximately 20% of the Millennials are just entering their peak spending ages, and 40% have yet to enter the full-time workforce.
‘Nevertheless, this customer segment is already accounting for around one-third of all business travel expenses. In the next four years, the Millennials are projected to account for 50% of all employees worldwide. In the next 5 to 10 years, as Millennials enter their peak earning years, this generation will provide the majority of spending for travel and leisure.’
Embracing the Millennial Market
Therefore, if millennials are already spending more on travel and leisure, it would be fair to suggest that in no small part, they could be said to responsible for the growth of the hospitality industry.
As the decade draws on, millennials will come to comprise an ever larger share of hospitality’s consumer base. Therefore, it needs to embrace this lucrative market to expand its growth prospects in the long-term.
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