How Millennials are Reinventing the Hospitality Industry
by Ella Nwagbo
Today, millennials have a strong influence across various industries, and companies are seeking creative ways to draw the millennial population into their business. We are seeing a steady increase in this generation’s purchasing power and a deep understanding of their impact in various industries, especially in the hospitality sector.
According to demographers at the Pew Research Center, millennials have surpassed Baby Boomers as the nation’s largest living adult generation and the population estimates from the U.S. Census Bureau illustrates that the millennial generation accounts for 27% of the global population or about 2 billion people, making them the largest living generation by population size.
Millennials are fast becoming the world’s most important generational cohort for consumer spending growth, employee sourcing, and overall economic prospects. According to Bernstein, millennials are expected to have more spending power than baby boomers this year and have already been recognized in many ways as the most powerful and influential consumer group in all industries including retail, hospitality, food, and services.
Further, millennials are also willing to pay more for experiences that they deem truly valuable and one-of-a-kind. A Travelport U.S Vacation survey shows that millennials are most likely to spend more money on their upcoming vacations than other age groups, with one out of three, willing to spend around $5,500 on their vacations.
What makes millennials tick and what has been their role in reinventing the hospitality industry as a whole?
Millennials grew up in a time of rapid technological and digital development. This has now created a shift in demand as we have an increasing demand for digital experiences, rapid solutions, and a millennial-generation-lifestyle. We have become accustomed to this quick and tech-savvy world of digital conversations that makes interactions faster and experiences better.
We crave faster check-in and check-outs, instant answer to questions, restaurants and entertainment recommendations tailored to our taste, and more autonomy to plan our itineraries. With millennial travelers now accounting for 50% of the world’s hotel guests (Insights), It is imperative that hospitality operators redefine their services in order to attract and gain their loyalty. Catering for the needs of millennials means rethinking the conventional processes and procedures. It entails both an evolution and a revolution that the industry needs to respond to in order to remain relevant. As a result, the hotel industry is now adopting the power of the Digital Concierge, stepping in to offer tailored responses to specific guest questions, providing faster services and personalized guest experiences. For example, Ritz-Carlton recently launched their app that enables guests to order in-room amenities, organize a luggage pickup or housekeeping services directly from their smartphone. Conrad hotel offers a concierge app that allows guests to choose their rooms prior to checking in and order room service during their stay. The W hotel group allows tech-savvy guests to unlock their rooms with an apple watch or a smartphone.
“Traditional hotel chains are catering to the tastes of young adults who have never known a world without the internet” The New York Times
Companies in the hospitality industry should adapt their marketing approach to comply with the fact that millennials crave being in charge of their travels and experiences as their motivation is related to exploration, socializing, learning, leisure. Also, rethinking communication with millennials. Millennials are the generation that expects their environments to be friendly rather than authoritative, and their conversations to be digital. Companies are most likely to turn them into their best brand ambassadors through electronic word-of-mouth because they believe in user generated content the most.
Millennials have caused the biggest change in the hospitality industry, relative to the actions of previous generations. Our use of digital technologies has altered the predictable and stereotypical behaviors in the previous decades. Millennials want to feel a digital control with a digital device at their disposal because it helps our swiftness in travel-related issues.