Marketing to Millennials

By Simon Hudson Endowed Chair in Tourism and Hospitality, University of South Carolina | October 11, 2015

Millennials have been called a lot of names by marketers: narcissistic, lazy, indecisive, and self-promoting. They have been labeled the boomerang generation for the many who are unwilling to leave the nest (I had one of those), or the Peter Pan generation because they supposedly won’t grow up (he is now one of these). But businesses are now realizing that this generation - born between 1980 and the early 2000s – should be treated with a little more respect. Given that there are currently around 79 million of them in North America – that’s three million more than Baby Boomers - they have the ability to reshape the economy, and are changing the way everything is sold, including hospitality.

According to a recent study by Moosylvania, a digital marketing company, Millennials already represent $1.3 trillion in consumer spending, out of total spending of nearly $11 trillion. Young adults, the study found, need a lot of reassurance but don’t like to be marketed to. “No one truly understands Millennials,” the researchers summarized. “Not even Millennials”. Risk-averse and socially-conscious, Millennials are savvy shoppers, and brands are finding them a tough nut to crack. The most diverse and educated generation to date, they are using their comfort with technology to not only locate the best prices, but also influence ‘how things are done’. Just witness the growth of the sharing economy, primarily driven by Millennials. It might be too early to estimate the impact of this trend on the hotel sector, but a recent study of the impact of Airbnb in Texas found empirical evidence that the sharing economy is significantly changing consumption patterns, and that Airbnb’s entry into the Texas market has had a quantifiable negative impact on local hotel revenues, particularly lower-end hotels.

So for hotels, what are the keys to attracting, satisfying and retaining this demanding demographic? Certainly, social media, online reviewing and apps are mainstays of Millennial choice-making. Around 40% of Millennials are likely to share travel experiences during their trip and 34% will disperse details via social media on their return. Likewise, they use peer reviews, checking on average about 10 sources, before booking. This is a vast resource of feedback that hotels and destinations can harness for their own marketing purposes. The Sheraton Cavalier has responded to this trend via multiple social media channels – TripAdvisor, Facebook and Twitter – as well as the Starwood Preferred Guest Program in order to engage Millennials.

Research has shown that speed is vital to digital-dependent Millennials. In order to hasten the booking process, the Sheraton has formulated an app: “It is now a necessary tool to compete for the growing share of online booking specifically taking place on mobile devices, along with creating loyalty among guests,” Erickson explains. “Guests also see high value in the app as it gives them an easy way to manage their profile and preferences and, simply put, makes the booking process easier and faster.” The hotel monitors all its social media platforms, responding in real time to guest reviews and feedback.

Increasingly, websites need to be cellphone-friendly. Around 49% of Millennials plan, as well as book, trips on their smartphones according to Expedia’s Future of Travel Study. Edmonton’s Varscona Hotel in Canada has also tailored its online presence and social media specifically to Millennials, placing rolling testimonials in the center of its website home page: “We are focused on providing a positive online experience with brand new websites rich in sharp visuals, mobile websites, making on-the-go booking fast and easy, and interactive social media outlining local events and other businesses in our area that Millennials might be interested in visiting during their stay,” says Jane Jess, Director of Demand & Reputation Management. Online reviews are important to Varscona which involves all hotel departments in the quest for positive commentary. “Guest service and comfort is paramount in our operation and a core component to our product,” Jess explains. “We encourage our guests to review their stay with us online. We do our utmost to respond to each and every one of these reviews and want our guests to feel they are connected to our staff and our brand.”

Despite their reliance on online communication, Millennials are actually more sociable offline than previous generations. With such constant access to images of social activity, they are subject to the FOMO (Fear of Missing Out) phenomenon. Around 58% prefer to travel with friends: that’s 20% more than other demographic groups. Varscona has worked on understanding Millennials through webinars, white papers and online research tools to analyze their habits and shape their product accordingly. “They are becoming increasingly important as the number of them traveling for business increases,” says Jess. “They also enjoy leisure travel with friends. We find that they are interested in unique hotel experiences in eclectic and active neighborhoods, which makes Varscona a perfect fit.” The hotel disseminates information about community attractions, events and businesses via social media and encourages guests to share their personal experiences at the hotel and area.

Coming up in January 2018...

Mobile Technology: Relentless Innovation

Technology has become a crucial component in attracting and retaining hotel guests, and the need to enhance a guest’s technology experience is driving a relentless pace of innovation. To meet and exceed guest expectations, 54% of hotels will spend more on technology in 2018, and mobile solutions in particular will top the list of capital investments. Many hotels are integrating mobile booking, mobile keys, mobile payments and mobile check-in into their operations. Other hotels are emphasizing the in-room experience, boosting bandwidth and upgrading flat screen TVs to more easily interface with guest mobile devices. And though not yet mainstream, there are many exciting technology developments on the near horizon. The Internet of Things (loT) is taking form in some places, and can be found in guest room control systems, voice activation systems, and in wearable sensors that can be used for access and payment options. Virtual reality headsets are available at some hotels so guests can enjoy virtual trips to exotic locations or if off-property, preview conference facilities and guest rooms. How long will it be before a hotel employs a fleet of robots for room service, or utilizes a hologram as a concierge, or installs gesture-controlled walls that feature interactive digital displays? Some hotels are already using augmented reality for translation services, or interactive wall maps, or even virtual décor. This pace of innovation is challenging property owners and brands to stay on top of the latest technology trends while still addressing current projects. The January Hotel Business Review will explore what some hotels are doing to maximize their opportunities in the mobile technology space.