How millennials will change travel by 2020
 
How millennials will change travel by 2020
05 JANUARY 2015 10:52 AM
Hoteliers need to adapt their product and service offerings as millennials become the largest group of hotel customers.
REPORT FROM THE U.S.—By 2020 or sooner, millennials might dominate the travel demographic. Hoteliers need to understand the nuances of this group of guests and be prepared with product and services that meet their needs and expectations, sources said.
 
“The number of millennial travelers is significant and growing fast,” said Jason Dorsey, chief strategy officer of The Center for Generational Kinetics, a consulting firm focusing on issues of millennial consumers. “It appears by 2017 millennials will outspend baby boomers on hotels. This will be a defining moment given that many hotel brands grew rapidly because of the boomers and all of a sudden the people with wallets are the millennials.”
 
According to Anna Blount, research manager at travel marketing agency MMGY Global, millennials are already more likely to take vacations than those in older generations. According to research conducted by the agency, 24% of millennials are planning to take more overnight leisure trips in the coming year than in the previous 12 months, she said. 
 
“They are the most passionate about travel; and they have the most motivation about why they want to travel; and they are the ones who want to take more trips, go see more places and spend more money on experiences than on things,” she said.
 
The travel patterns of millennials will shape strategies of hotel companies in the coming years.
 
“Millennials are very used to getting things quickly and easily without the encumbrances that perhaps Gen X and the boomers grew up with,” said Tina Edmundson, global officer for luxury and lifestyle brands at Marriott International. “When you think about what companies Uber or Apple have done for millennials’ expectations—not just for product but also for service—it will be incumbent upon the hotel industry to understand how that changes what we do.”
 
According to Dorsey, property-level changes are inevitable as millennials rise to dominance.
 
“The typical hotel experience today was designed for baby boomers. You walk in; someone greets you; and you stand in a line,” he said. “Millennials never stand in line, so this (procedure) will be disrupted. There will be no more lines, and the process of checking in, looking someone in the eye and answering the same questions you answer all the time will all change.”
 
Dorsey said the mobile device will be millennials’ sole point of communication with the hotels they use.
 
“It’s not just the check-in, but also it will be how I communicate if I want a drink or a towel or directions to the gym,” he said. “There won’t be a need for people-to-people conversation for millennials once they and hotels get accustomed to using that screen as a connection point.”
 
Loyalty and millennials
Blount said her agency’s research shows millennials tend to be as loyal to hotel brands as are members of other demographic groups. She said 49% agreed with the statement, “I have a few hotel brands I like and rarely stay with others.”
 
Edmundson believes that in many cases millennials have yet to develop brand loyalties.
 
“It’s not that they aren’t loyal; they’re now in their formative years and are experiencing the brands that they may or may not become loyal to in the future,” Edmundson said. “This is the time for them to experience a wide variety of brands before they make a loyalty decision.”
 
Dorsey sees major changes ahead in hotel loyalty programs to match the psyche of millennials.
 
“Right now, loyalty programs are based on the number of stays or nights, which is not the best way to incentivize millennials or build their loyalty,” he said. “They are much more into shorter-term rewards.”
 

4 Comments

  • Katie January 6, 2015 6:01 AM

    I am considered a Millennial and I disagree with the points made in this article. It is true that Millennials are attached to their devices and screens, but there are many out there that are starting to realize that face to face communication is more affective. As I reach my mid 20s, I am starting to prefer talking to a live person. I have found trying to deal with daily problems and new responsibilities with online devices is difficult. If there is a problem or task that needs to be solved immediately, an email or click of button does not cut it. Sometimes I have to wait up to 48 hours for a response to an email inquiry. I would not be willing to wait this long to receive a drink or a towel for a room. I feel that the correct approach to dealing with Millennials would be to change how person to person contact is done, not just take away the other person.

  • Leo January 8, 2015 12:11 PM

    Myself as Gen X and a hotelier I think Millennials will change certain things like online check ins and apps for hotels but the essence of a true luxury brand or luxury boutique hotels will stay the same with the personalized One to One treatment that millennials also like, I see this rapid change to "robotized" service in more 3 star brands that might take on all these changes becuase that is what sells them, but I consider luxury brands will attract millennials with other perks and more technology in the rooms .

  • Matt February 16, 2015 5:50 PM

    I would imagine in a corporate hotel streamlining of hotel operations to match the Millenials expectations would work. Where as in a luxury hotel Millenials are looking for experiences and this can generally only come from personal interaction which is found in the best luxury hotels. To remove this element of guest tailoring would merely make the experience generic something Millenials are not about.

  • Woody Hinkle September 1, 2015 5:54 AM

    Millennials may well be "passionate about travel" and want to go places, but they also have more debt than previous generations and less disposable income at the moment. Let's stop pretending that technological advances like a mobile check-in is only for the benefit of millennials.

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