The oldest members of Generation Z are only approaching their twenties, but hoteliers are anticipating this emerging cohort will change the industry within the next several years.
GLOBAL REPORT—Spending power, fear of missing out, social media and multiculturalism are a few facets of the future influence Generation Z will have on the hotel industry.
Fredrik Korallus, CEO at Generator Hostels, said Generator is already serving members of Gen Z—the age group comprised of people born in 1998 and later—on a daily basis as well as millennials.
“We’ve found Gen Z to be very informed and culturally aware,” Korallus said via email. “They care about their world a great deal, want to live in the present and want to find their own way forward.”
There’s still a lot to learn about Gen Z, but here’s what hoteliers know about this generation and how sources said they expect the age group will influence the hotel industry.
They value experiences over material goods
Members of Gen Z will soon surpass baby boomers in overall volume and are expected to be financially responsible once they are old enough to enter the consumer market.
Korallus said Generator Hostels has found that members of Gen Z are willing to spend, but are less likely to spend money on material items. He said his company markets to Gen Z travelers by promoting a property’s communal space and partnerships with local artists and community events.
“We have found that Gen Z values experiences over material goods and prioritizes travel, food, music and social experiences above many material things,” he said. “By 2020, Gen Z will have more than £44 billion ($63.9 billion) in spending power.”
Mitch Patel, president and CEO of Vision Hospitality, said Gen Z members have FOMO—an acronym that stands for “fear of missing out,”—which could influence hotels to create greater experiences at properties.
“Experiences are the new commodity to them more than ever,” Patel said. “It’s not cars, homes and other material things … experiences and sharing those experiences are so important to millennials and are becoming even more important to Gen Z.”
Patel said designing smaller rooms and adding more communal space is going to become more important in hotels going forward.
This age group is “very communal,” he said. “I don’t think they want to be by themselves in a room. I don’t think that trend is coming back anytime soon.”
Mark Weinstein, SVP and global head of loyalty and partnerships at Hilton Worldwide Holdings, said that the company’s new brand, Tru by Hilton, is ideal for travelers with a young mindset, which includes Gen Z.
“Knowing the audience for this brand is value-conscious, rooms are affordably priced, but do not skimp on the basics,” Weinstein said via email, adding that the brand is “designed around the desire for human connection, personalization and environments that foster experiences.”
Technology and social media are necessities
Members of Gen Z grew up with technology and the internet, which means they expect that seamless connection during a hotel stay.
“They think of being constantly connected, so having any (trouble) with Wi-Fi or difficulty in being connected is very uncommon for them,” Patel said. “And having multiple devices and multitasking on those devices is very common for them. There’s only so much bandwidth that’s out there, and the need is going to multiply exponentially at hotels because they’re not just bringing in one or two devices, they’re bringing in multiple devices.
“That puts more pressure on our industry to meet those demands.”
Korallus said Generator catches the attention of the generation that craves experiences and the need to be in the know by connecting with Gen Z through various social media channels and hashtags.
“These seekers are much more likely to seek opinions via social media when researching potential vacation destinations, so we appeal to them by including Generator hashtags and our social channels on all collateral found throughout the hostels,” he said. “We know that content is king and context is queen, and video is where the two meet. We are producing videos that are tailored to each social outlet. Our YouTube videos are of high quality with engaging inspirational imagery, our Snapchat videos are off the cuff and shot from the hip and our events are often covered through Periscope for a live, in-the-moment feeling.”
Patel and Korallus said members of Gen Z use Snapchat rather than Facebook. Korallus said Facebook is “archaic” to Gen Z.
Weinstein said Hilton is appealing to Gen Z’s tech needs through the Hilton mobile app that allows guests to book a room, check in and access their room key from their smartphone.
Gen Z is more multicultural
Members of Gen Z are also are characterized as more culturally aware. Patel said that Gen Z is “more diverse than ever” and its awareness and exposure to multiculturalism could influence the way hotels think about food and beverage.
“How we approach that in our industry, it could affect F&B,” Patel said. “I would expect to have a lot more diversity in your F&B selection more than ever (before).”
Gen Z as employees
Patel said he looks to his three children, who are members of Gen Z, when it comes to thinking about what this generation wants. A lot of what Gen Z members want will affect how the industry serves this generation from a travel standpoint, but hoteliers should also be thinking about how to train members of Gen Z who are employees or will one day be employees in the industry.
“They are very visual,” he said. “I think that we all kind of know that having a lot of text and literature, you’ve got employees now that are millennials, soon to be Gen Z in their company … giving them a manual with a bunch of text is not how they learn as much as videos and using other visuals to learn.”