Gen Z in hospitality: The impact of the new generation

by | Feb 25, 2022

Gen Zs are now entering the markets of all industries and are gradually altering the trends set by the Millennials. Information and new technology are second nature to them and they adopt and confirm new trends. In fact, they demand new technologies and novelty. The experiences, living standards, value systems, and diversity among Gen Zs are much higher than their previous counterparts. This means all industries including the hospitality industry must take steps to accommodate this fast-growing and diverse population segment. 

Millennials Vs. Gen Z 

With the shift in time, the contrast between generations becomes more obvious, as does the way in which these generations need to be perceived by both employers and sellers. While this scenario may not be industry-specific, the hospitality industry has its work cut out for them when approaching Gen Z.  

The demographic born between 1996 and 2000 – referred to as Gen Z – are fast-growing in both influence, numbers, spending power, and buying power. According to Forbes, Gen Z accounts for $29 to $143 billion in direct spending. Unlike Millennials, Gen Zs know exactly what they want, are willing to pay for it and expect what is promised. They grew up with constant social changes, innovation, and economic instability. As a result, they are resolute, hard-working and are shrewd decision-makers.  

While Millennials often had a bucket list of places to travel, Gen Z is more focused on the experience over the destination. Rather than go to a hotel to work on their tan, Gen Z is more interested in the activities surrounding the area and the new experiences they can enjoy when visiting a particular place. 

Generation Z as Guests 

Gen Z loves to travel. While the intentions behind travelling may vary according to the individual, the demographic as a whole is passionate about travel. They tend to document their entire experience, mainly on Instagram, TikTok, Snapchat and YouTube, staying true to their “influencer” title.  

According to the Travel Agent Central, Gen Z take a minimum of 2.8 leisure trips per year. Many studies show that Gen Z heavily influences family decisions because parents are keen to keep their children happy. This shows that Gen Z children are the true spending power behind family vacations. As this generation grows up and begins earning their own money, their spending power will increase further. However, the expectations when travelling remain the same – they will look for excitement and unique experiences.  

According to a survey by Campaign Monitor on “The challenges of Generation Z marketing”, social media plays a key role in influencing Gen Zers to purchase a product or travel to a destination. Two-thirds of this demographic are often undecided on a destination and are open to suggestions. The most popular trip types among Gen Z travellers are relaxing, sightseeing, adventure, and visiting family. Travel Agent Central notes that Gen Z prioritises once in a lifetime opportunities and bucket list experiences ahead of deals and budget prices. Furthermore, 77% of Gen Z travellers are willing to receive help and inspiration when they plan a trip, and this inspiration comes via the smartphone for nearly 70% of them. 

There are a few specific areas of focus when catering to this demographic, and the hospitality industry had to go through a shift in focus after Gen Z came into the picture. 

Uniqueness 

Gen Zers like to stand out. As opposed to many other generations including Millennials, whose individuality depended on a pack mentality, Gen Zers are very firmly lodged in the notion that the more unique they are, the better it is. Their travel tastes reflect this attitude.  

Many Gen Z travellers look for hidden nooks and crannies, previously undiscovered or not often visited. They prefer these destinations of travel over large tourist infused destinations. Hotels that provide a uniqueness targeted at this demographic can stay ahead of the competition. Due to this, traditional marketing where the latest trends are identified and campaigned are losing potency since they have no effect on Gen Zers.  

Sustainability 

Gen Zers grew up with information at their fingertips, and this information also includes facts about global warming or eco disasters caused by human behaviours. This plays a significant role in travel for Gen Zers. The hospitality industry has to re-evaluate its strategies and create a wholly different experience incorporating this sentiment. Prioritising the environment is fast becoming the norm, and Gen Zers are one of the main advocators of this.  

Eliminating plastic is one major change that was made in the industry. Small hotel shampoo bottles were replaced with large refillable bottles mounted on the walls. The bottled water in each room has been removed, and many hotels have automatic motion sensor lights that switch off when no movement is sensed for an extended period.  

Embracing Digitisation 

One of the major changes in the industry caused by the new generation is the role played by digital innovation and technology. Gen Zers happily accept QR codes in lieu of payment, and making bookings via a Twitter DM or Instagram Message is the norm. They consider virtual tours ahead of the actual trip convenient, and it is even expected sometimes. This generation prefers mobile guest journeys created through solutions like FX GeM. Gen Z’s affinity for technology makes it a priority in the hospitality industry. 

Sudden Inspiration 

It is no secret that Gen Zers have a short attention span. This is obvious in their multi-tasking and multi-screen behaviours. The hospitality industry has to be able to capture their attention within eight seconds via engaging and eye-catching forms of marketing. The platform used has also changed during the past few years. Facebook is no longer a priority when targeting Gen Zers specifically. Instead, they are more focused on social media platforms such as Snapchat, Instagram and YouTube. This has caused the entire hospitality industry to shift its marketing strategies to these platforms, taking a step back from email marketing and Facebook posts.  

Gen Zers are a highly influential generation who brought drastic changes that are environmentally friendly and tech-savvy. This generation has turned the hospitality industry has towards a digital and sustainable path. With Gen Z constantly demanding that their wants be met, the hospitality industry is undergoing a subtle revolution to accommodate their dynamic tastes and preferences.

Jacob K I | IDS NEXT

Author

Jacob K I

Vice President – Business Development

He is responsible for developing growth strategy focused both on financial gain and customer satisfaction. He is also responsible for conducting research to identify new markets and customer needs.