In the early 1950s, Kemmons Wilson and his wife packed their kids into the car for a family road trip to the state of Washington. Along the way, they found themselves frustrated by the lack of safe, kid-friendly accommodation on America’s growing highway system. In response, Wilson opened the first-ever Holiday Inn.
Fast-forward to 2007. Two college roommates struggled to pay their steep San Francisco rent. When they heard a major design conference was coming to town and most hotels in the city were fully booked, they thought of renting their loft to conference attendees as a way to make ends meet.
That simple idea grew to become Airbnb and, subsequently, an entirely new industry.
New generations, new expectations
These two stories not only help illustrate the ingenuity of hospitality entrepreneurs, but also how much the travel industry has changed in the last several decades.
As society, technology and travel continue to adapt, each new generation brings its own preferences and expectations.
For those in the hotel business, navigating these can feel like a challenge, but appealing to younger generations — particularly millennials, the largest living generation today — represents a major opportunity, and it doesn’t have to come at the cost of older hotel guests.
Here are four tips to help hotels understand changing demographics and better attract today’s millennial travelers.
See also:
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Millennial and Gen Z travel trends shaping the future of hospitality
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Seven Gen-Z travel trends that are transforming the hospitality industry
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Using guest segmentation in hospitality to boost hotel revenue
1. Understanding hotel guest preferences
Traditionally, getting to know guests on a first-name basis was a feature of local B&Bs and luxury boutiques, but technology makes it increasingly possible for a property of any size to personalize its guest experience at scale.
And learning the individual preferences of your hotel guests, regardless of age, can be a helpful starting point in gaining a deeper understanding of — and catering to — generational differences.
One common tactic hotels use to understand and address their guests' individual preferences is through market segmentation. Different types of guests have specific needs that hotels can cater to, from the length of their stay to the types of amenities they prefer.
With increased ability to collect to customer data, hotel guest segmentation is becoming even more sophisticated, with microsegments like ecotourism, business-leisure (or “bleisure”) and wellness tourism emerging. These market segments allow hotels to better meet the specific needs of their guests, rather than generalizing across a broad group.
As many differences as similarities
The same goes for generational segments, like millennials or baby boomers, which can be too big to accurately define, even with access to data.
We know, for example, that climate change is among millennials’ top five biggest concerns, that travel is very important to them and that authentic cultural experiences are key, with 60% of millennials ranking that as the most vital part of travel.
But with more than 1.8 billion millennials around the world, ranging in age from 27 to 42, there are as many differences as there are similarities.
Rather than trying to appeal to entire generations or segments, hotels can use data to create microsegments and build a more nuanced understanding of their guests, no matter their age.
2. Make it personal
With well-defined hotel guest segmentation and a clearer understanding of individual guest preferences, hospitality industry operators can begin to offer the kinds of personalized amenities and experiences millennials — and other generations — tend to look for.
Effective personalization allows brands to provide experiences that feel tailor-made for customers, which can boost guest loyalty. Gatorade, for example, tracks customers’ sweat to offer personalized recommendations on how best to refuel post-workout. Netflix has long offered personalized homepages, serving viewers the programming they’re most likely to enjoy.
And in Switzerland, Hotel Lugano Dante offers guests an online portal called “My Page” to customize their experiences with over 150 potential amenities and options, including baby cribs, air purifiers, yoga mats and specific minibar contents to meet their specific needs.
Customers expect personalization
Not only is personalization a nice differentiator, but it’s also now becoming table stakes across industries: a McKinsey & Company study found that up to 80% of customers expect some level of personalization from retailers; other research has found that millennial brand loyalty increased by 28% if they received personalized communication.
An Expedia study reported that 80% of survey respondents between the ages of 18 and 34 — a cohort that includes younger millennials and the older members of Generation Z — said they would be willing to spend more money to upgrade their experience.
At PressReader, we see huge value in personalization and making hotel guests feel like their experience is unique. With our platform, hotel guests can curate their own reading list and tailor their dashboard to meet their needs rather than choosing from a select few publications.
3. Embrace generational differences
In 2020, Hilton Hotels launched a brand for work-focused millennials — a segment they’re calling “modern achievers”. By making their rooms more digitally enabled and focusing on sustainability, they’re hitting many must-haves for the millennial hotel guest.
They also offer novel amenities tailored to the millennial workforce, like “curated assortments of morning and bedtime rituals” including in-room mindfulness and meditation, which they built in partnership with Arianna Huffington’s Thrive Global.
Called Tempo, this new Hilton brand pairs their hotel experience with the kinds of unique offerings millennials and members of Generation Z (particularly the digital nomads among them) crave.
New and purpose-built
Rather than trying to re-market traditional business travel to a changing demographic, Hilton found a way to differentiate itself in a new segment by offering something new and purpose-built.
For millennials and Gen Z, travel experiences don’t have to be one-of-a-kind to feel like they’re once-in-a-lifetime. Even the world’s biggest chains can offer something unique while maintaining the consistency and reliability older guests look for.
4. Prioritize shifts over trends
Millennial pink gives way to Gen Z yellow; skinny jeans are out; butterfly clips and baguette bags are in: fads may come and go (and come again), but some generational shifts are here to stay. When looking for ways to appeal to younger generations, hotels can prioritize those more universal and long-term changes, while still appealing to shorter-term trends.
Climate change, for example, represents a fundamental change in how we do business across all industries. And studies show that climate change is increasingly top-of-mind for millennials and Gen Z. Offering more climate-friendly options is a meaningful way for brands to appeal to younger customers, while creating a more sustainable business and industry long-term.
Find opportunity in change
From ancient Roman gathering places to stopovers for medieval travelers on horseback, to elite continental destinations and family-friendly resorts, the history of the hotel industry tells a rich story of economic and cultural shifts over many centuries.
Today’s hospitality industry continues its long tradition of adapting to the preferences and needs of hotel guests, now with the help — and challenge — of technology and data.
In the midst of so much change, hotels have an opportunity to stand out among younger generations by getting to know their preferences and finding new ways to offer them a unique and authentic guest experience.
