Millennials – a New Breed of Travelers

The Millennials refuse to be dismissed! This generation thinks outside the box, pushes boundaries and experiments with the unknown. When they entered the workforce, companies complained about how to manage the “lazy and entitled” employees, but now that they have a little cash in their pockets, companies are faced with a different issue – how to understand their spending habits. Although they are not yet the core customers of airlines, hotels, and travel companies, they are expected to be the power players in five to ten years, when they enter their peak earning, spending, and traveling years. According to the World Youth Student and Educational (WYSE) Travel Confederation, young travelers of the millennial generation represent 20% of international travelers. By 2020, 320 million international trips are expected to be made by youth travelers each year, a 47% increase from 217 million in 2013.  The challenge for travel and tourism companies is to understand this generation’s diversity, purchasing power and most importantly, how they are connected to each other and the world around them.

 

Millennials, also known as Generation Y, refers to the population group born from 1981 to 1990. Unlike the baby boomers that could be homogenized, Millennials, regarded as the first global generation are too diverse.  They share more overlapping values and characteristics across cultures than any before them, particularly BRIC Millennials who are better educated and affluent than their elders. And they love to travel!  According to Brand Karma, Asian Millennial travelers (AMT) already account for nearly 35% of $600 billion spent by Asians on international travel. Additionally, AMTs are expected to increase their travel spending by 1.6 times to $340 billion by 2020 mostly due to personal income growth.

Chinese Millennials, for example, represent an important market segment. With a population of 198 million in comparison to 43 million in the US, the group of Chinese Millennials with gross income over $30,000 is expected to grow by 219% by 2020 in absolute terms. This will certainly translate to greater expenditure on travel. Holiday takers in China are projected to increase to 252 million and 258 million by 2018 for the 25-34 and 15-24 age segments respectively.  For the same period, travel retail expenditure is expected to experience absolute growth of 236%.

Chinese-travel-by-age

Low cost carriers have emerged in response to the new generation of young travelers and consequently hotels are now seeing an explosion of Millennial guests. How can they better cater to the needs and interests of this unique generation? To follow below are five Millennial expectations and tactics as to how hotels can engage this potentially lucrative group.

Trend #1:

Millennials expect to be acknowledged and recognized and are far more emotional in terms of brand loyalty. They are used to having it their way and being able to customize and adjust products and experiences to match their unique needs.

Recommendation: Hotels have the opportunity for highly targeted, personalized marketing by collecting as much data from them as possible, and this generation is more than willing to provide their details and preferences. Check-in and checkout are ideal for gathering more information, but all customer touch points are potential opportunities. Of high importance is that hotels pay attention to where these guests are coming from. While Millennials do share common characteristics, they still have different preferences and cultural sensitivities. Is the booking site translated in Chinese? Are there multilingual staff? What’s on the menu?

Trend #2:

Because they grew up being digitally connected, they don’t just want to be connected. They are dependent on it! Millennials have an immersive, reciprocal relationship with social networking channels. They are twice as likely to read reviews and are pioneering the use of social networking sites and mobile media in searching for travel information and purchasing products.

Recommendation – Hotels must become tireless autobiographers – documenting experiences through social media, concentrating on fully, distinctive inspirational or imaginative content that can stimulate a response from their friends and followers. This presents a huge opportunity for hotels with a knack for providing interesting products and experiences to receive free advertising. But it should never be one-sided. If hotels want to know what Millennials want, they need to engage in a conversation with them and they need make sure they are marketing to them using the medium they use the most. While we know that it’s essential to have a Facebook page and Twitter handle, have they established a presence on Sina Weibo, which has twice has many users at Twitter, or Renren (China’s Facebook)?

Trend #3:

They expect to be inspired, caring more about interesting than comfort.  In fact, they have re-defined luxury as “Instagram-able” experiences. They seek out hotels with individual personality and a distinctive sense of place.

Recommendation: Hotels need to give guests something to talk about – advertise the ability to evoke individual tastes and experience the local culture. Tactics could entail including content taken by guests on their own, branded websites.

Trend #4:

They expect seamless perfection at an affordable price and have a preference for efficiency over “friendly” service. These tech-dependent young travelers won’t just expect wifi for free, they’ll expect it to work impeccably throughout the hotel on multiple devices at the same time. In fact, paid wi-fi is actually keeping hotels from receiving 5 star reviews on review sites.  While they want to be connected 24/7, that doesn’t mean they want to hide out in their hotel room. They spend more time in public places than private spaces.

Recommendation – Hotels can focus on low-cost areas that will attract Millennials, including affordable price points and free amenities – particularly wi-fi. Hotels should invest in “low touch luxury”, ensuring minimal touch points with travelers. When this group checks in to a hotel, they typically do not want the same luxury (an end to end service) that their parents experience in similar properties, rather they want to remain independent and they will ask for help. One basic solution is to offer self-service check-in/out kiosks. Hotels can also avoid competing with local restaurants offering free wifi by offering 24 hour casual food options. Multi-use lobbies that encourage guests to socialize are another option.

Trend #5:

And lastly – booking. This spontaneous generation is driving the trend of “spontaneous booking.” The traditional model of increasing last-minute prices does not work with this group. They are likely to book on their mobile phone and they often book within a week of travel. With the numerous last minute search options, finding the best deals is right at their fingertips.

Recommendation: Investing in mobile booking apps is a minimum requirement. The key will be to offer affordable spontaneous booking by working with those companies that offer last-minute deals (eg. Lastminute.com). In addition, given that most often Millennials search social media sites for vacation ideas, continuous social media management and promotion takes on even greater importance in advertising for these impulsive bookers.

 

Learn more in our free white paper “Understanding the 21st Century Traveller