Tuesday, May 8, 2012

Diversifying Markets: The Gay & Lesbian Opportunity

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

One way for hoteliers to grow their market share is through diversification in their target markets.  Hoteliers and the tourism industry need to look at alternative sources to tap into and to draw on.

The gay and lesbian travel market is one market that hotels and other tourism-based companies have, in general, overlooked, or simply chose to ignore, for too long
           
Most hoteliers understand the importance of diversifying their markets, but many aren’t completely sold on the gay and lesbian market.  Here are three main reasons why hotels should choose to target this market:

  • Size: the North American gay and lesbian travel market is worth an estimated $80 billion per year.  Research also shows that this market is more likely to take leisure trips and spends more when travelling.
  • Resilience: gay and lesbian travellers have proven to be less adverse to negative travel conditions.  For instance, shortly following 9/11 and SARS, they had higher propensity to start travelling again compared to the heterosexual travel market.  Even now, during the downturn in the economy, they still budget more discretionary dollars to spend on travel then heterosexuals. 
  • Loyalty: 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. 

Looking closer at the demographics and travel habits of gay and lesbian travellers, it’s easy to see that, for many hotel properties, this market fits into their overall target market.  Research has shown that the average US gay traveller spent 10 nights in a hotel while on leisure trips.  For both Canadian and US gay and lesbian travellers, price was the top motivator when selecting a hotel, with both location and the “gay friendliness” of the hotel also being strong motivators.

Misconceptions about the gay and lesbian market may deter some hotels from targeting them.  By being more aware of the market, hotels can overcome these misconceptions.  This understanding is also critical for identifying the market’s needs.  As with any market, hoteliers need to understand the gay and lesbian traveller before they can expect to reach them and retain them. 

So what is the gay and lesbian travel market looking for?  In essence, gay and lesbian travellers demand the same product and engages in similar activities as heterosexual travellers; they behave in every respect the same as general market travelers, including in how and by what they are motivated.  But they expect that their experience will be safe and open to them.  If you want to attract the gay and lesbian traveller, you have to demonstrate to them that they are accepted, and that you can offer everything that they need.  Cost, safety, and “gay” reputation are important considerations when they do their travel planning. 

It’s important to keep in mind that not all gay and lesbian travellers are the same; there are sub segments defined by gender, region, life stage, and so on.  As with any other market segment, hotels must understand which sub segment they are targeting and specifically how to meet the needs of these different groups.

As well, as with traditional markets, new opportunities within the gay and lesbian market will continue to become available, such as same-sex marriage and the new business that it created.  Hotels have the chance to tap into these new opportunities providing they 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.  Reaching out to the gay and lesbian traveller just makes good business sense.

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