Tourism and leisure industry: Current trends and the importance of the family segment
By Prof. Dr. Torsten Widmann (Head of Leisure Industry Studies, Member of the Local Senate, Duale Hochschule Baden-Württemberg Ravensburg)
Both tourism and the leisure industry are important economic sectors as well as indispensable partners in shaping individual lifestyles. In the coming years, these industries will continue to grow dynamically and face new challenges.
Technological advances, changing consumer habits and increasing environmental awareness are shaping the future development of offerings. At the same time, the family segment plays a significant role in tourism and the leisure industry, as families are looking for shared experiences and child-friendly offers. In the following, some important trends for the coming years and the importance of the family segment are examined in more detail.
"Wanderlust beats air fares" was the headline of the industry trade magazine fvw Travel Talk in its June 2023 issue. Indeed, at least for the German market, a new desire for long-distance travel can be observed after the years of the COVID-19 pandemic crisis, despite the inflationary increase in prices and the climate debate. International tourism will continue to see significant growth in the coming years due to economic improvements in many potential source markets and the infrastructural development of new destinations. An important trend in already established travel markets is the increasing individualisation of travel experiences. Travellers are looking for authentic experiences and want to immerse themselves even deeper in the local culture. They are no longer satisfied with standardised package deals, but want customised trips that suit their personal preferences and interests. The consequence from the supplier side will be a further increase in the customised production of trips (dynamic packaging, dynamic bundling). Other suppliers are looking for opportunities in specialisation. Through precise product knowledge and knowledge of customer wishes, specialised suppliers can occupy niches and satisfy individual customer needs. The customer is increasingly becoming the decision-maker and thus integrated into product creation.
Furthermore, sustainability will be a key trend in tourism. More and more travellers appreciate environment-friendly practices and want to reduce their ecological footprint. Sustainable tourism involves caring for the environment, protecting natural and cultural resources, supporting local communities and promoting environmental awareness among travellers. Hotels and tour operators need to develop sustainability strategies and provide transparent information about their environmental and social practices to meet the needs of travellers who are becoming increasingly aware of environmental issues.
Another important trend in tourism is health tourism. While in the past health was associated with the absence of illness, today a development of the term health in the sense of a holistic understanding is emerging. Wellness tourism has been booming in Germany for more than 30 years. From a small niche, wellness tourism has developed into what is now a significant economic factor. More and more people attach importance to wellness and well-being, regarding both physical and mental health. Health centres, spa resorts and yoga retreats are strongly on the rise. Travellers want to recover, relax and recharge their batteries. The considerable growth of the health tourism segment is due to the fact that, in the course of the general change in values, growing health consciousness has emerged as a significant element of today's attitude to life, in which health, physical fitness and performance have become benchmarks of social recognition. The growing awareness of a work-life balance and the importance of self-care are also reflected in this development.
In the future, the area of medical wellness in particular will gain more importance. Medical Wellness combines proven orthodox medical measures with complementary methods: Healing as such is linked to vanity (cosmetics and bodystyling) and well-being (in the sense of wellness), with prevention clearly in the foreground. Medical Wellness will be of great importance in connection with the demographic development in Germany, as the proportion of the population over 60 years of age, which has a higher need for medical services, will grow disproportionately.
Society is getting older and the baby boomer generation is on the threshold of retirement or has already reached retirement. In the coming decades, the proportion of people over 60 will increase significantly, not only in absolute numbers but relative to the total population. Improvements in medical and social care, combined with a generally more health-conscious lifestyle, will further increase life expectancy. Accordingly, the senior citizens' market will be supported in the long term by the senior citizens and very old people segment. In the long term, demographic change will bring about a decline and an ageing of the demand potential for leisure and tourism offers in Germany. However, the decline will be partially compensated by increasing mobility in old age.
When discussing the increasing importance of senior markets and the implications of an ageing society, it should not be overlooked that even with unfavourable forecasts, more than two thirds of society will still be under 60 years of age, and accordingly, leisure demand will continue to be largely driven by the under-60 age groups in the future. As a result, the leisure and tourism industry must adjust to an ageing guest potential, but without neglecting the target group of families. The decline in the family segment will be less than the demographic development would lead one to expect, as small families with one or two children are on the increase and can provide more income for leisure and tourism consumption.
Currently, more than half of the German population lives in a parent-child community, so tourism with children still plays a major role and will continue to do so in the future. The processes of socio-demographic change, triggered among other things by the ever-decreasing number of children, should not hide the fact that a partnership with joint children is still a desirable goal for young adults. Within Generation Z, traditional values such as family are once again gaining importance.
The family and household structure is changing towards smaller households. Overall, there has been less marriage, more divorce and lower birth rates in recent years. As a result, there are more 1-person households (but not necessarily more singles) and fewer children per household. Instead, the proportion of patchwork families (divorced parents living with a new partner and children), single parents, adult children still living with parents even though they have their own income, and so-called "DINKS" (Double Income No Kids) is rising. At the same time, the number of households in which several generations live under one roof is decreasing. This structural change is only partly relevant for holiday tourism, as nevertheless leisure time is increasingly spent by children in the company of senior citizens. Spending time with children is becoming increasingly important to the growing number of senior citizens. The senior segment is characterised by specific travel behaviour (e.g. lower seasonality, higher expenditure, longer duration).
New family constructions are emerging through new social relationships (friends instead of relatives), which are increasingly replacing the bourgeois nuclear family. Patchwork families show expanded leisure and travel needs and single parents/singles for a time are recognised as a target group. Because " multi-parent children, not multi-child parents are the future", family researchers Ursula Ott and Mathias Pape already said in 2003.
The tourism industry has realised that it needs to address the specific needs of families in order to remain competitive. Family hotels, theme parks with child-friendly attractions and special family offers are just a few examples of how companies are targeting this segment.
Because the target group consists of experienced travellers who are becoming more and more demanding. Family holidays are expected to be more than just a beach and a holiday flat. Due to the increasing desire to be able to fulfil many different wishes with one holiday, a comprehensive target group-specific offer is also expected for family holidays, which makes the holiday as a family holiday a special experience. Furthermore, a complementary offer is also desired that goes beyond the family holiday and makes it possible to realise individual holiday types and expectations. The demands of holidaymakers with children are therefore becoming increasingly differentiated. Children should be offered specific experiences that offer more than the ordinary everyday experience. This can be achieved through artificial holiday worlds as well as through authentic, traditional ways of life like on a farm. In order to successfully address the family segment, it is important to offer child-friendly infrastructure and services. This includes, for example, family rooms in hotels, child-safe facilities and child-friendly menu options in restaurants. In addition, activities and attractions must also be developed that are tailored to the needs and interests of children. This could include, for example, interactive museums, nature experiences or adventure playgrounds.
The adventure offers of the leisure industry are essential success factors in family tourism. However, they do not only play a major role in the tourist offer mix. Commercial leisure offers are also becoming increasingly important in the short-term day and weekend leisure time.
Developments in leisure demand behaviour and in leisure tourism offers are mutually dependent and complementary. Five important trends have been identified for the future of the leisure sector:
Digitalisation: Advancing digitisation will further change the way we plan and enjoy leisure activities. Online booking platforms, mobile apps and virtual reality will enhance the leisure experience and enable personalised offers. Virtual attractions and virtual tours can facilitate access to leisure activities and open up a new dimension of experience. However, significant competition to physical leisure facilities is emerging as digitisation continues. Delivery services of all kinds (such as video-on-demand, food and beverage delivery services, on-line shopping) are shifting classic leisure activities (e.g. shopping trips, going to the cinema) to the home environment. Leisure facilities can only survive against this competition if they offer a quality of experience that cannot be achieved at home. To increase the quality of the experience, leisure providers form alliances, as illustrated by the example of the VR attraction Yullbe. Here, visitors to Europapark Rust can go on a virtual journey through the Miniaturwunderland Hamburg.
Change in recreational sports: There is a continuing interest in individually pursued recreational sports, which is expressed in the development of new sports (e.g. Nordic walking, stand-up paddling) and leads to demand for commercial recreational sports providers (e.g. fitness studios), which partly replace classic club sports. The trend towards year-round indoor leisure activities (e.g. indoor water parks) is accompanied by outdoor activities with modern, high-tech equipment (e.g. electric bicycles).
Experience orientation: consumers will increasingly look for unique and eventful activities. Companies in the leisure industry must therefore create innovative offers that arouse emotions and offer unforgettable experiences. This can be achieved, for example, through thematic events, interactive and immersive attractions and high staging quality. It is becoming increasingly difficult to distinguish between leisure infrastructures such as holiday parks, leisure facilities, leisure worlds or theme parks, because the different types of operation are becoming more and more similar and the boundaries are blurring. For example, amusement parks are becoming more and more like holiday parks through the development of accommodation capacities, and these in turn are investing in leisure facilities and thus coming closer to amusement parks in terms of content. Modern amusement parks can be understood as mixed-use centres, i.e. multifunctional facilities for experience consuming, whose offer is made up of different components. They get their specific profile by focusing on the amusement sector, which, however, is increasingly combined with other services, some of which are not related to the sector (e.g. conferences and conventions).
Sustainability: Sustainability will also gain importance in the leisure industry. Consumers are paying more and more attention to environment-friendly practices and companies that take ecological responsibility. Companies therefore need to develop sustainability strategies to meet consumer expectations. This may include, for example, the use of renewable energy, the reduction of waste and the protection of the natural environment.
Individualisation: Individual needs and preferences are becoming increasingly important. The leisure industry will increasingly create personalised offers to meet the different interests and requirements of consumers. This can be achieved by providing customised experiences, flexible schedules and individualised services. Leisure facilities are increasingly operated by private companies and are developing into multifunctional places of leisure, so-called Third Places (alongside work and home environments), whose visit is an expression of individual lifestyles. For example, a day stay in a modern and architecturally appealing thermal spa, which offers not only bathing but also other leisure activities such as sauna, wellness treatments, events and good gastronomy.
Tourism and the leisure industry are facing exciting developments in the coming years. Trends point to increased individualisation, a focus on sustainability and the continuing high importance of the family segment. Tourism and leisure industry providers must adapt to meet consumer needs and remain competitive. Businesses should invest in developing child-friendly offers while creating innovative and sustainable experiences to meet the increasing demands of consumers. With the right strategy and adaptability, companies can successfully benefit from current and future trends in the leisure industry.
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