Ms. Knutson

Guest Service / Customer Experience Mgmt

Here Come the Kid$

By Bonnie Knutson, Professor, The School of Hospitality Business/MSU

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?

Before thinking about how your hotel can capitalize on this Kid$ trend, It will be helpful to understand two things about them and their influence. First, children begin their lifelong relationship with brands at a very young age. As unlikely as it may seem, babies begin to recognize brands by six months of age. They can form mental images of brand logos and mascots. Hence the power of icons such as Mickey Mouse, Ronald McDonald, and even the Peabody ducks. When they are two or three years old, brand loyalty begins to kick in and toddlers will begin asking for a specific product or to go to a specific place. This is when the so-called "pester-power" begins rearing its ugly head.

Think about the last time you walked down the cereal aisle at your favorite grocery store with a child in tow. In kindergarten, they begin making their own purchase decisions, and are virtually in total control before they enter middle school. What is both powerful and scary at the same time is the fact that, in many categories, more than 25% of brand preferences carry over from childhood to adulthood. Adult allegiance is rooted by childhood memories, associations, and nostalgia. This is a lesson Coca-Cola learned the hard way with its venture into New Coke.

Second, it is helpful to understand just how kids do influence family decisions. Nickelodeon found that there are basically five approaches to decision-making in families that involve kids' input. Of course, a family can use a different approach at different points in time, as well as depending on the type of decision being made and the ages of the children. But, in essence, the five are described as:

  • Board of Directors - Parents make the final decisions, but only after seeking their children's input (56%)
  • Family Meeting - Parents and children discuss and come to a decision together (44%)
  • Parent Screen - Parents provide options and let the children decide (20%)
  • Because I Said So - Harkening back to earlier generations, parents decide on their own and the children have to just accept it (13%)
  • Kids Cut Loose - Children decide on their own (9%)

So given these duel facts, let's take a brief look at what this might mean for your hotel.

Personalize

Kids of all ages have money to spend in your hotel, if - and it is a very big if -- there are "cool" things to buy in there. Those in the marketing world know that it's important to plant the seeds of brand recognition in children at an early age in the hopes that the seeds grow into purchase and loyalty. They also know that, even if the child doesn't directly buy the product and may not for many years, the marketing of the brand experience must begin in childhood. A case in point would be Christmas/Chanukah ornaments.

Buying an annual tree ornament for each child has become a hot trend for parents and grandparents. Think of the possibilities for having ornaments made that have the hotel's logo, the year, and space to have the child's name engraved. They could be available in your gift shop or even given to each child as part of his or her personalized welcome gift. It would be simple to include a personalized ornament. The same idea can be used for the adults in the family. The design would be different, of course, because kids sure don't want what their parents have.

Beyond Kids Klubs

Gone are the one-size-fits-all little plastic bags filled with coloring books and crayons. In are amenities and activities that are both unique to your hotel and designed for different age groups. A Los Angeles based hotel gives their young guests little backpacks filled with their own toiletries, slippers and robes. And remember that kids like to do fun things and learn new things. For example, one Parisian hotel provides family-friendly movies and pizza making classes with a renowned chef.

Then there are hotels that entertain their young guests with ventures such as kite making, Creole fishing, and a blank license plate to decorate for their bikes. The Internet is awash with examples of hotels that are capitalizing on the kids market by offering unique experiences. While you can look to them for inspiration, the key is for you to offer something fresh, different, and exciting; it isn't just to copy and be a me-too property. So look outside the lodging sector for ideas and inspiration that you can adapt.

Parlay the Buzz

Every parent and marketer knows that a child begging to buy something or to do something is the most powerful persuasive tactic there is. That's why kids' marketing is jokingly called "pester power." Thus, a key for your hotel marketing is the proverbial word-or-mouth (WOM) advertising, which in today's parlance may mean Snapchat (72% use), Facebook (68%), Instagram (66%), ad infinitum. The challenge for hotel, then, is to provide some things that kids - especially teens -- find "cool" enough to channel friends via their social media sites. Many kid brands are using "buzz or street marketing," in which you find the coolest kids and have them sign up for your activity or wear your hotel's product in order to create a buzz that can - and will - spread like wild fire. This type viral marketing connects with savvy and elusive kids by using trendsetters to help position your property as the "cool" place to go.

Whole Family

A.k.a. Multi-generational travelers. Let's face several facts. First, people are living longer more active lives. Second, the most important thing to grandparents are their grandchildren. And third, it is grandma and grandpa who generally have the discretionary money to pay for family trips. But it is the children and grandchildren who influence where they go. In the U.S., multi-generational vacations account for more than half of all trips taken by parents/grandparents. In fact, in one recent survey, more than three out of four grandparents said they try to take a big family vacation every year. After all, the gift of a sweater or toy will last briefly. The gift of a beautiful memory will last forever. My AmEx card can readily attest to these truisms.

Hotels are taking note and looking at how they can better accommodate large family groups - from adding more connecting rooms, suites, and convertible day beds, to providing large tables in the dining room, to serving meals family style. But what about adding activities that are customized to the family? And, of course, don't forget the FMP (Family Meeting Planner). Generally, there is one person who is in charge of corralling all the family likes and dislikes and booking all the travel arrangements. They can heavily rely on your staff for information, guidance, and all around help to make the experience memorable for everyone in their family. Make it easy for them to spend their time and money at your place.

Add an Edition

Finally, take a lesson from such notable magazines as Time, Sports Illustrated and People. Each has launched kids' and teen's editions. What about your hotel launching a kid or teen edition of your social media channels that boasts information about new programs, adventures, products and service that are just for them? Remember, they have their own money, their own pester power, and, most importantly, are your future adult guests

Your REVPAR will thank you.

Bonnie J. Knutson is a professor in The School of Hospitality Business in the Broad College of Business at Michigan State University. She is an authority on emerging lifestyle trends and innovative marketing. Her work has been featured in The Wall Street Journal, USA Today, and on PBS and CNN. She has had numerous articles in industry, business, and academic publications. Bonnie is a frequent speaker for executive education as well as business and industry meetings, workshops, and seminars. Dr. Knutson is also editor of the Journal of Hospitality & Leisure Marketing. Ms. Knutson can be contacted at 517-353-9211 or drbonnie@msu.edu Extended Bio...

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