Millennials, Now Bigger than Boomers, Offer Hotels Challenge

Date: 30/07/2015

Article written by Felicia Greiff for Ad Age:

As the summer travel season hits its peak, the $928 billion global travel industry is reaching out to a new key segment: millennials.

Hospitality chains are doing everything from changing up decor -- updating rooms with trendier furnishings and glitzing up lobbies with musical acts -- to adding services such as budget prices, 24-hour cafes, full-service bars and even yoga classes in pursuit of the millennial traveler. And in a nod to this digitally conscious generation, they are wooing them with social media, concierge apps, free Wi-Fi and smartphones used as room keys.

"This is a huge generation that will have a big impact, and we'll continue to meet them wherever they are," said Mary Beth Parks, senior VP-global marketing at Hilton Worldwide, which has more than 4,300 hotels in 93 countries.

The reason is clear: the demographic's sheer size. This month, the U.S. Census Bureau released a report saying millennials are now 83.1 million strong -- more than a fourth of the nation's population and bigger than baby boomers, who come in at 75.4 million.

And they do have wanderlust: a 2013 Expedia report finds that people under age 30 travel 4.7 times per year on business versus 3.6 times per year for 30 to 45-year-olds and 4.2 times per year for 46-to-65 year-olds. The same report found that millennials take 4.2 leisure trips a year, more than those age 31-to-35 (2.9 trips) and those 46-to-65 (3.2 trips).

According to a Boston Consulting Group survey, 75% of millennials are interested in traveling abroad as much as possible versus 52% of non-millennials.

To lure this tech-savvy generation, Hilton has introduced a digital check-in service for smartphones, which allows guests to select a room on a map, and all its hotel room doors will be smartphone-enabled by 2016. Hilton and Hyatt have concierge accounts on Twitter, and Marriott's Rewards app lets guests choose from a list of services and amenities or chat with a person for other requests. InterContinental's Concierge Insider Guides app offers video tours and recommendations on where to shop and eat, and Starwood Hotels & Resorts' app lets guests FaceTime with staff at any hour of the day.

Because millennials rely on social media for the insider scoop before booking, Starwood Hotels & Resorts Worldwide hired social media influencers to visit its its new Tribute line. These influencers, including Instagram users who post about their travel experiences to audiences of thousands, visit the hotels and post photos of what they like best. A millennial traveler can look up a hotel by hashtag to gain access to views and rooms at their potential getaway. Take Instagram photographer brianladder for instance. Employed by Starwood, he shared images of his stay with his 60,000 followers, including the one below.

Last year, Red Roof Inn shelled out $150 million to renovate its properties based on TripAdvisor feedback. According to an Ad Age article on the renovations, Red Roof planned on launching 40 new hotels from their new brand Red Roof Plus+, an upscale economy line with designs that appeal to millennials. Updates included new carpet, countertops, sinks and amenities like flat-screen TVs, Serta beds and free snack boxes.

The top 20 apps used by millennials are retail or discount focused, with Amazon Mobile and Groupon at the top, according to a 2014 Nielsen paper on millennials. With this in mind, Wyndham Hotel Group is investing $100 million into a new loyalty program featuring a quirky wizard character played by an actor from HBO's "Game of Thrones." The video below featuring the wizard character received three quarters of a million views on YouTube.

For Marriott's Moxy brand, the company uses Amsterdam ad agency LikeFriends for digital strategy and its own content studio launched last year. One such project includes an upcoming video series called "Do Not Disturb" and hosted by YouTube comedian Taryn Southern. The company said the series, which will be filmed inside a Moxy shipping container containing a prototype bedroom, will explore topics "one could only reveal from inside a Moxy bedroom" including favorite hangover cures.

David Beebe, who leads the studio, said part of the studio's purpose is to make Marriott a "leading publisher of travel lifestyle content for the next generation" with a goal to "produce engaging content that builds communities of people passionate about travel that will drive commerce." The budget-friendly hotel line, which has a location in Milan, has plans to open in Berlin, London, Frankfurt and Oslo.

Dan Vinh, VP-marketing at Renaissance Hotels at Marriott International, said marketing for millennials is about embracing their mindset. "It's not an age," he said. "Millennials reject anything that feels like marketing or corporate, and they've pushed us all in how we guide brand experience." Moxy, for example, has an ironing room in Milan with a life-sized image of the tattooed man went viral; guests often pose for photos with the wall and share their photos on social media. The hotel also has a video "guestbook" on a wall that collects images, quotes, videos, experiences from guests who pass through the hotel.

Hyatt announced its Centric brand this year, geared at "modern explorers" with aims to offer "experiences that lead to great stories." The rooms at the hotel's Herald Square New York location start at 175 square feet, which isn't as sizable, as say, the Grand Hyatt's Midtown location, which starts at 280. But the hotel offers affordable minimalist style inspired by the Herald Square history of publishing and fashion with "industrial newspaper printing elements." In the hotel's espresso bar, guests can look through old newspaper stacks while they drink coffee made from locally roasted beans. One TripAdvisor user Lissansky posted a photo of a decorative typewriter perched on a table in her review -- a far cry from the classic lamp-beside-the-bed image.

While traditionally hotels have tried to make properties uniform to offer travelers the reassurance that they know what they are booking, the current trend for chains to create individual stories for each hotel in the style of an independent hotel. Add in vibe that allows young people to express themselves and tell their friends about the place.

Of course, large hotel brands might not achieve the authenticity of indie or boutique hotels, said Pavia Rosati, founder and CEO of Fathom, a travel site focused on indie experiences. But she applauds big brands that make an effort, likening it to restaurants -- for example, Chipotle setting itself apart from McDonald’s.

"If [the hotel] has an interesting vibe, and it has a good story with an engaging experience, then it has nothing to do with millennials," Ms. Rosati said. "It has to do with a good story." Hilton offers another take on the generation. "At the heart of it, people are people, and they have common experiences and common needs," said Hilton's Ms. Parks.

While millennials are important, she said, as of now, generational divides aren't considered more important than practical decision-making factors like spending patterns, household income or traveling with children to consider its demographics. "Honestly, I think it remains to be seen," Ms. Parks said on the generation outweighing decision-making factors in importance.

View the article on Ad Age here

< Article List
Total Pages:
Total Results:
Page Start:
Page Result #: