'Generating' Profits - Developing Tomorrow's Hospitality Concepts for Today's Influencing Generation

By Jeffrey Catrett Dean, Kendall College Les Roches School of Hospitality Management | February 13, 2010

How will generational effects determine the successful hotel concepts of the next decades? As the influential Y Generation begins to have economic power and as the still influential Baby Boom enters yet another life stage, the question is essential for hotel marketers to consider.

The past has proven eloquently that the company able to anticipate generational tastes (until now more through intuition than through planning) will be the company that defines one or more decades. It is easy enough to see how generational effects in conjunction with life-stage elements, technological advancements, business cycles, and historical events have shaped the hotel products of the past.

So what will the new hotels for Generation Y look like, and how will they change over the duration of this influential generation's economic life? How will Boomers finish out their travelling days (a question often overlooked)?

Although demographic science in general is not especially new, generation-watching is relatively recent as an important marketing activity with significant research conducted throughout the 1990's. Unfortunately, generation-based prognostication can easily fall into the over-simplification trap of technology-based futurism and wildly miss the mark, for it is not as simple as it looks. A number of overlapping factors must be taken into account:

Dramatically altered social and technological influences on the first half and last half of a generation combined with parental learning mean that the second half of a generation differs from the first. Researchers now suggest that the second half of Generation Y (sometimes referred to separately as the Millennial's) is markedly different from the earlier Gen Yer's.

What, then, do we know about today's generations? Research suggests that the first half of Generation Y is:

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.