Capitalizing on Millennial Hotel Guest Behaviors and Travel Trends
How to win the business and loyalty of millennials
by Binu Mathews, CEO of IDS Next
If it seems like everyone in the hospitality industry is talking about millennials — well, that’s likely because they are. With 2019 fading into the background, our collective feeds and conversations with industry peers are rife with discussions of what’s to come and, subsequently, who makes up the most significant travel segments moving forward. As we determine those primary guest segments, a new question arises: Is guest behavior changing and, if so, who is leading the charge? What do they want? How will they influence our industry?
Understandably, millennials (those born between 1981 and 1996) have marked their territory as key industry players both now and moving forward. In fact, by the year 2020, millennials will make up more than half of the global workforce. They also account for the largest segment of business travelers, with one recent study stating that 38% of millennials travel for work, compared with just 23% and 8% of Gen-Xers and baby boomers, respectively. Even further, millennials are expected to represent 50% of all travelers to the USA by the year 2025, according to a recent study.
With this in mind, it seems due time for hoteliers to get to know the millennial traveler. Who are they? What do they want from hotels? Are they looking for a traditional experience, or are they more interested in the conveniences of self-service and mobile hotel technology? What, if anything, inspires their continued loyalty?
Here’s the thing, millennial travelers aren’t particularly interested in the traditional travel experience. Mind you, that doesn’t mean they aren’t interested in travel — quite the opposite. Millennials practically invented the term “wanderlust,” and spent $200 billion on travel in 2018, with 33% claiming a spending budget of $5000+ on their vacations. Let’s face it, buying power talks, and the hospitality industry is listening.
The Rise of DIY Mobile Travel
Straying from the traditional associations of “cookie-cutter” vacations, millennials demonstrate a vested preference for unique getaways, often of the do-it-yourself (DIY) nature. Backpacking adventures and local experiences, faraway destinations, memorable weekends such as micro-vacations, sustainable travel, these are all popular choices among the millennial traveler demographic.
But the “DIY” aspect of their approach goes far beyond merely opting for unique experiences in favor of an all-inclusive week in Mexico; they also love self-service technology. In an ideal world, millennials have control over every aspect of their stay. From mobile booking to check-in to check-out, mobile concierge, self-service kiosks, and more, millennials crave the opportunity to engage with hospitality brands on their terms, through their choice of medium.
66% of millennials book their trip using a smartphone, while 74% use it to research. Further, 97% will share travel experiences on social media, with 2 in 3 millennials posting once a day, and 87% use social media to inspire their booking options, making social media a crucial driver for travel research and decision-making.
This preference for user-friendly, self-service technology should come as no surprise. Millennials are empowered “digital natives” after all and have spent their entire lives, or nearly so, interacting with digital technology. The convenience offered by mobile, self-service solutions is not only appreciated; it’s become a standard expectation. As aforementioned, millennials often find the inspiration for their next trip via a social media platform on their mobile device, and, in the majority of cases, both flights and accommodations are booked on mobile as well. During a trip, their mobile device is often their most important travel accessory, doubling as their camera, wallet, their room key or ticket, and their primary communication pathway. With this influence, we are also likely to see a continued rise in AI-powered technology in-room (Amazon Echo, Google Home, etc.), and AI-powered chatbots utilized throughout the entire guest journey.
Now, this isn’t to say millennials are entirely consumed by digital mediums in a way that is aversive to traditional, high-touch interactions with hospitality staff. However, providing them with the choice across all touch-points is paramount.
Traditional Loyalty Programs Are Missing the Mark
Gone are the days of traditional, point-based loyalty systems. Often associated with a lack of flexibility, relevance, and transparency, millennial travelers crave more choice and versatility, along with a ‘unique’ and personalized approach to the rewards offered. In fact, according to an ICEF Monitor study, 86% of all travelers “like or value personalized offers,” and “more advancement in this area will likely bring more success for travel companies.”
However, they want to be rewarded for their loyalty with unique perks and other indirect benefits. Once they are hooked on a brand, studies say millennials will pay as much as $41 more to stay within their preferred hotel program.
In many cases, millennials are more likely to look for ‘instant’ deals, often influenced by promotions and data-backed upsell offers that appeal to their desire for instant gratification. In many cases, millennial travelers might be grappling with student-loan debt, and while their desire to travel is undeniable, they still intend to spend responsibly. As such, millennial travelers are more likely to:
- Actively save for trips, prioritizing multiple trips per year
- Plan their own trips, mapping out every aspect of an upcoming vacation in a hands-on fashion
- Capitalize on deals and promotions
- Book shorter trips or staycations
- Combine business trips with leisure (bleisure)
The Experience Economy
It’s also essential for hoteliers to recognize the millennial desire for meaningful, experiential travel. 86% of millennials travel for experience and culture, while 60% rank authentic culture as the most vital part of the entire travel experience, and 78% want their travel to be educational and to learn something. At heart, millennials crave local experiences (whether cultural, culinary, or natural) that allow them to get closer to their surroundings and generate meaning from that experience. Studies suggest that 75% of millennials are looking for travel experiences where they can learn something new.
With this in mind, hotel packages, upsell opportunities, and loyalty programs, which are positioned to see the most success, are those which cater to the ‘experience’ of the traveler. Millennials represent a wealth of opportunity to modern hoteliers. Prioritizing travel and experiences over material goods, while boasting impressive buying power and wide-spread influence, this travel segment shows no sign of slowing down its momentous trajectory. And while there are limitless trends and statistics specific to millennials for hoteliers to consider, the primary takeaway is rather simple. Millennials want the opportunity to balance their work with pleasure, experience new cultures, meet new people, create memories, and share those experiences with others online in real-time.
What Does All This Mean for Hoteliers?
Ultimately, millennials desire authentic, personalized travel experiences that not only prioritize mobile technology and conveniences but also allow them to build their ‘dream trip’ around their personal tastes.
To attract and retain the millennial generation, hoteliers need to adapt to meet the needs of this new breed of guest. The rise of the millennial traveler means that hoteliers need to move the goalposts of traditional guest services and look to how they can deeply engage with this experience-driven, informed, tech-savvy, and always-connected traveler.