Mum hotel: Adults who won’t fly the nest

Author: Countries and Consumers

Date published: 5 Feb 2008

A peculiar phenomenon has been brewing of late. The trend is defined by a strong attachment of its main actors; young people aged 25-35, who continue living in the parental home, in financial comfort. Among the main drivers of this trend are sky-high rents, college debts, a lack of interest in marriage or in taking on commitments and the 'kidult' syndrome. This segment is characterised by its distinct purchasing behaviour, as most 'Mum hotel' consumers spend the bulk of their income on themselves.

Key trends

A worldwide phenomenon;

The burden of economic crises;

Oh, but it's so cosy here!

Commercial opportunities

The typical absence of household expenses, rent, mortgages and dependents combined with their active social lives turn them these young adults into attractive targets for marketers, as they are willing to spend on fancy products, with electronic devices their favourites;

As these individuals share some expenses with their families, brands also face the challenge of marketing to multigenerational households.

Background

Evidently, adolescence is lasting more than it used to. Many youngsters are no longer interested in leaving home to experience independence and self sufficiency. On the contrary, they intend to harness the benefits of what is now called “Mum hotel”. While this situation was strangely frequent in Asia and some parts of Europe, it has become a natural state of affairs in the entire world, having fully reached the Americas.

At the same time, besides the ones who refuse to leave the nest, this group includes “boomerang children”: youth who've moved out, but who choose, or often have to return home after a brief period of independent living, to financially burden their parents.

A recent Euromonitor International report on this phenomenon outlines its prevalence: “In the USA, nearly 16 million families had at least one child over 18 living at home in 2003, marking a 70% jump from the situation in 1995. A 2003 survey by the Royal Bank of Scotland of 1200 graduates in the UK found that nearly 60% are still supported by their parents three years after graduating. A 2006 Statistics Canada report found that young adults today stay at home longer than their parents did”.

Unlike their parents, who grew up during the post-war economic honeymoon, had stable jobs and were able to save and buy a house, today's young have a different, tougher present and a completely uncertain tomorrow. They face work instability, low salaries, and a lack of rights or guarantees. As a consequence, many have no chance of paying rent or of even envisaging their own futures.

A worldwide phenomenon

Brazilian newspapers are currently describing a true exodus, a mass departure of young people who are saying goodbye to the USA and heading back home to dear Brazil. Due to a weaker dollar and the recent construction crisis, these Brazilians feel it is not worth staying any longer, even those who finally obtained their much coveted green card.

According to a 2006 survey carried out by the National Demographic Counsel (CONAPO), in Mexico, around 21 million families live with their children, most of them aged 25 to 59 (which constitutes a total of 17.2 million), although circa 1.5 million young adults aged under 25 are already fathers.

In Asia, a very similar situation can be observed. Between1994-2004, the number of unmarried Japanese women aged 24-29 living at home soared from 40% to 54%, largely because of Tokyo's expensive housing market. Though branded “parasite singles”, this derogatory term morphed into a cool badge – many printing business cards bearing their proud new title.

In Italy, according to Istat (the national statistics institute), approximately 5.5 million young people aged 20-30 (a figure that represents 69.7% of the total) still live with their parents. In fact, the situation is so critical that last October, Tommaso Padoa Schioppa, Finance Minister, announced cheaper rents for young adults as “it is necessary to pull their 'bamboccioni' (dummies) out”!

Similar situations had already reached most parts of the planet, and far from labelling its actors with offensive tags, societies understand the situation and consider it natural within the current context.

The burden of economic crises

Of course, the economy is one of the main causes of Mum hotels all over the world. In September 2003, according to the American Bureau of Labour Statistics, 10.9% of youth aged 20-24 were unemployed. The jobless rate among those aged 25-34 rose from 3.7 to 6.3% between 2000 and 2003. It is then hardly surprising that many go back home. An article published by BusinessWeek online, highlights debt related to college loans. “For as many as 40% of recent grads, it made smart economic sense to move back in with their parents – where life is comfortable and rent is either low or nonexistent – while they get their finances in order”.

In Argentina, because separate households are beyond the budgets of most young adults and also due to the lack of professional opportunities, most people in their twenties and thirties are also living at Mum's. And Italy's panorama is pretty much the same. As outlined in Elisabetta Piqué's piece for the La Nación newspaper, most young Italians aged 20-35 define themselves as a “precarious generation”, foreseeing a shaky future. In Italy, more than two thirds of young adult wage-earners make less than €1000 monthly, and almost a third earns less than €500.

“Why aren't I living on my own? Do you know how much I make?” responds Mexican Laura Suárez, 31, to a question from El Universal paper. She affirms that the economic situation is outstandingly difficult, and that this is why she still lives with her family. For the director of the Mexican Youth Institute (IMJ), José Antonio Pérez Islas, their stay at Mum Hotel has become a common occurrence, with the two big reasons being employment and housing.

Oh, but it's so cosy here!

Yes, money is one big issue, but there's still another. As Dennis Prager's piece for World Net Daily puts it, “adult children stay home today because it is often quite pleasant to live with one's parents.” Total or partial financial support, credit card and tax payments, petrol; menu a la carte, available at any time; clean, ironed cloths, and special wake up calls with breakfast included, apart from the cuddles and kisses. All these heavenly benefits come free, and are the very tempting carrot that keeps youth homebound. According to Prager, this is a quite a different reaction to that of youth of the 1970s. Today's generation wants comfort, above all.

A study of this consumer group by Mary Bold from the Center for Parent Education (University of North Texas), reveals some interesting facts on their conduct. About half of them contribute to the household in a tangible way; generally get along with their mothers, being cheerful and good company, and consider their stay as temporary.

Outlook

This segment of consumers wants to be treated as independent, despite the fact that they remain in financial comfort at the expense of their families and may then be consider hedonists. However, they also maintain their own social and professional lives, and don't hesitate to pamper themselves. Brands stand to profit from this situation as these consumers don't spend their money on taxes, rents or foodstuffs. It should be noted that Mum hotel residents are particularly drawn to technology and entertainment-related 'cool' products and services.