Hoteliers seek loyalty among millennials

GLOBAL REPORT—Just like Generation X and the baby boomers before them, millennials are the target of intense pursuit by global hotel companies as members of this group of 20- and 30-somethings approach their peak earnings years. The question, however, is whether hotel companies and hotel brands can make loyal customers out of these consumers.

Millennials—also called Generation Y and commonly defined as people born between 1982 and 1999, and with 80 million-plus members—is one of the fastest-growing segments of consumers, including consumers of travel.

A lot of traits are used to describe the psychographics of millennials, but as with most age categories, it’s a group with both specific characteristics as well as many variables that can’t be generalized.

“We always believed millennials would be minimalists and would prefer form and style over substance, but everything I’ve seen and read says that’s not true,” said Robert J. Habeeb, president and COO of First Hospitality Group and a Hotel News Now columnist. “Millennials have the same sense of luxury that other generations do. They like luxury. They like being pampered. The biggest difference is they’ve grown up in an environment where they can buy (luxury) on a flash sale.”

Their reliance on technology is often cited as a key descriptor. In fact, millennials are the first generation that has had technology and the Internet as a persistent part of their lives.

“They’ve grown up with the Internet, are heavy users of social media and are used to receiving instant information,” said Don Berg, VP of loyalty programs and partnerships for InterContinental Hotels Group. “The Internet created transparency with respect to pricing, availability and reputation, and social media became a magnifying glass on transparency.”

Millennials are heavy users of mobile technology. According to MMGY Global’s “2013 Portrait of American Travelers,” 74% of millennial leisure travelers regularly access the Internet from a smartphone, compared to 68% of Generation X travelers and 53% of baby boomers. On the other hand, Gen Xers are more likely to access the Internet from a tablet (49%) than are millennials (43%).

Teresa Y. Lee, an analyst with HVS, said mobile technology might be the most important tool in marketing to millennials. Lee, who is in the millennial generation, authored a report on the most important trends in millennial travel.

“Mobile is the biggest of these trends because of what technology will control in the future and where it is going,” she said. “Some companies say they’ve been hesitant to move toward mobile because they don’t know if it is the next big thing. All signs point to the fact that mobile is here to stay, and companies should be investing in it. It’s not just a millennial trend, but we grew up with this technology so we expect it.”