Younger travellers will drive the growth of micro hotels in Asia-Pacific

Micro hotels – classified as smaller-sized lodgings with high-end, functional in-room furnishings usually found in high-density, urban locations – are gaining in popularity among young travellers in Asia-Pacific, with the region also pegged as the next big growth space.

According to Future Market Insights, the micro hotel market was estimated to be US$84 billion in 2022 and is projected to reach US$150.4 billion by 2032, at a CAGR of six per cent from 2022 to 2032.

Moxy debuted in Australia with Moxy Sydney Airport, pictured, in August last year

“(The) micro hotels (concept) is probably the fastest-growing segment in hospitality, and (I think) that more of the big hotel brands will be venturing out into a segment that Yotel pioneered. When we started, we were an oddity, and currently there are very few brands competing globally,” opined Hubert Viriot, CEO of Yotel.

He shared that the Asia-Pacific holds “massive potential” for Yotel, as the region “will have the largest tourism market in the world thanks to its very young population”. This comes as the micro hotels concept is a “perfect fit” for Asia-Pacific, as most people live in high-density cities.

It also helps that the younger generation of Asian travellers are very responsive to new concepts, new ideas, technology and social media, and are also “price-sensitive”, which makes them “not so loyal to legacy brands”, he noted.

Viriot added: “These young travellers want immediate recognition (as opposed to collecting points over many years for a free stay). They want a great experience, but they also want to save money to utilise their disposable income on experiences. Hotels are only a small component of travelling. That is why we offer cashback programmes, immediate upgrades, or a free experience at our hotels.”

Similarly for Marriott International, Moxy is one of its-fastest growing brands. In August 2023, Moxy debuted in Australia with Moxy Sydney Airport. This year, the brand will be opening outposts in Thailand (Moxy Bangkok Ratchaprasong) and India (Moxy Chennai and Moxy Bengaluru).

“Travellers in Asia-Pacific, especially Gen Z and millennials, continue to gravitate towards hotels that offer vibrant experiences, stylishly-designed rooms, and dynamic communal spaces at an affordable price point,” said John Toomey, chief sales & marketing officer, Asia-Pacific (excluding China).

For instance, Moxy’s lobbies are bars that doubles up as a reception for check-ins, while rooms are designed to maximise space while providing functionality such as motion-activated LED lights, tables and chairs that double as wall art, to roomy under-bed storage and sleek peg walls.

Toomey also expects Gen Z and millennials to lead demand among Asia-Pacific travellers, pointing out that when compared to other generations, they will prioritise travel above material goods, allocate more budget to trips, and take at least three trips a year.

“In 2024, we anticipate that young affluent travellers will also choose to rediscover familiar and nearby locations and immerse themselves in cultures. In addition, their demand for purpose-driven and personalised offerings will continue to increase and loyalty programmes will be the key differentiator in offering exclusive experiences,” he added.

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