Experts share the latest thinking about how millennials book, stay and spend at hotels, and it’s all about experience.
MEMPHIS, Tennessee—While it may be easy to over-generalize millennials, their travel habits and spending patterns at hotels can be complex. Understanding their patterns can be a goldmine for hotels’ profitability and loyalty, said speakers at the recent Southern Lodging Summit.
The process starts by looking at age and life experience, explained Christine Hight, senior director of market research for Hilton Worldwide Holdings. While millennials as an age group fall into the 18- to 35-year-old age range, Hight said they break into two distinct groups in terms of their worldview and behaviors.
“It’s driven by life experience and earning potential,” she said. “Some of those in the younger group may be in college or not even there yet, so they’re not necessarily living independently. Their discretionary income is limited, as is their life experience.”
Bump up a few years, though, and the situation is different.
“By the time people hit 25, they’re looking at marriage, starting families, starting their careers, and their values have changed,” she said.
That older group is the one in which people naturally start earning more discretionary income, which they’ll spend on travel and other hotel experiences, said Albert Smith, SVP at Pivot Hotels & Resorts, the division of Davidson Hotels & Resorts that concentrates on lifestyle and boutique hotels.
“This group is aspirational, and they want to engage in these environments (of interesting hotels) from a lifestyle perspective,” he said. “Even if they don’t stay in the hotel, they may go to the bar or restaurant, and that’s part of the experience.”
Attracting millennials during the booking phase
Since this age group is so technologically connected, especially via mobile phones, attracting them to your hotel property must happen early and thoroughly.
“Just watching friends and my own wife book travel, I can see that everything’s about reviews,” said Josiah Mackenzie, VP of business development at ReviewPro. “So if something isn’t in the top percentile of restaurants or hotels, it’s not even in the decision set. So I’m looking at the top five, maybe the top three restaurants or hotels when I make a decision.”
Great photos, videos and descriptive content also go a long way with this visual-learning cohort, Hight said, as does creating booking options that facilitate travel in groups.
“We have found that at their age, when they have not yet committed to marriage and children, they’re traveling but they also have limited income, so we learn that they can come together for travel and maybe trade up and stay in a nicer place,” she said.
Making the process easy and efficient also appeals to these digital natives, said Christine Kettmer, Marriott International’s senior director of consumer insights advisory services for the Americas.
“Any channel that makes booking very convenient, it’s going to be the winner,” she said, citing that this age group is accustomed to the one-step shopping process popularized by Amazon.
More about the experience
The word “experience” is tossed around a lot when it comes to best practices for attracting millennials to a hotel, but the speakers said it’s about more than just offering unique experiences on-property—it’s about understanding how this age group values and shares those experiences, too.
“There’s a big mentality that if something doesn’t happen on Facebook, Twitter or Instagram, it didn’t happen at all,” Kettmer said. “So the validation that comes with those bragging rights that say, ‘I’ve stayed at this hotel’ or ‘I went to this location,’ that’s really important.”
That influences what millennials will pay for, too.
“There’s an interesting dichotomy that happens with millennials in that they want to have some luxurious or pampering experiences, but they may trade those off with others because they have limited discretionary funds,” Hight said. “So they may be selective about where they stay, at a moderately priced location, but they want to go to the cool bar and get a $15 cocktail and be seen there.”
This group of travelers seeks experiences both in and outside the hotel, so the more hotels can facilitate that process, the more successful they’ll be at garnering loyalty.
“Anything that can be done to make the guest feel like they’re part of a welcoming environment makes them feel like they’re in the know,” Kettmer said. “That’s one of the biggest compliments they can receive, so enabling off-property experiences as much as on-property is very important.”
That’s where partnerships come in, as well as staff education, said Hight. She said that when staff or even online tools via the hotel’s website can help show guests their proximity to interesting attractions or activities nearby, that’s the goal.
The facilitation of experiences is a big differentiator between hotels and Airbnb, Mackenzie said. Since hotels are staffed 24/7, they can offer more real-time suggestions about what’s going on in the city than an absent Airbnb host can do.
What about loyalty?
Brand and property loyalty is where the speakers said millennials differ most from their older traveling counterparts, so hoteliers must adapt.
One of the biggest changes, Kettmer said, is that millennials may not show their loyalty in the form of multiple repeat stays—they are after unique experiences every time they travel, after all—but rather they may show it in the form of recommendations to friends and social networks.
“Any opportunity to post about an experience on social or review sites is important—it shows loyalty if someone is willing to take the time to write a review or speak about experience,” she said. “That’s an indicator that someone is willing to pass along that word-of-mouth recommendation.”
For more immediate loyalty rewards, many hotels are turning to instant recognition or gift rewards instead of traditional points. All methods have their value and trade-offs, Hight said.
“Brand recognition isn’t just about a free stay,” she said. “It’s about recognizing the value of that guest. While (millennial) guests may not come back next week, in three or four years they might, and as long as we’re trustworthy, that will pay dividends in the long term.”