Millennial Guests and Unconventional Experiences

By John Tess President & CEO, Heritage Consulting Group | September 30, 2018

Millennials are defined as young adults born between 1981-1996.  Seventy-four million strong, they represent 25% of the total US population and will soon surpass Baby Boomers as the largest demographic in the country.  As this generation has moved up the ladder and gained discretionary income, it has become a driving force in the hospitality industry.  Hoteliers are working mightily to capture this market segment.  And particularly for historic hotels, the market is ripe for an audience that places a premium on authenticity, uniqueness, and value.

Based on a 2015 study by international branding and marketing firm Resonance Consultancy, compared to general travelers, millennials are less likely to own their own home, have lower household incomes, and lower net worth.  Two-thirds have at least a bachelor's degree and are working full time.  More than half have children in the household.  Top activities include dining, fun attractions, shopping, and sightseeing.  On the latter, the quality of sightseeing is distinguished; the most desired activity is "participating in a once in a life-time activity."  And millennials have a preference for participatory activities.  These range from nightlife, music, health and fitness, watching, but also participating, in sports, and volunteering. 

When it comes to overnight stays, staying with friends and Airbnb-like rentals are significantly more popular to millennials than to the general traveler, but so are small hotels, B&Bs, and notable full service hotels.  The 2015 Resonance study further segments millennials into five groups:  "sophisticated explorers," "all-in enthusiasts," "active adventurers," "occasional convenience travelers," and "family-oriented frugals."  Distinctive among millennial travelers is the particular rise in solo traveling; 37% of millennials have expressed a likelihood of vacationing alone.  Also notable is an emphasis on value.  The millennial travel community wants better value for the price they pay; the issue is not so much about cost as what they get for their dollar.  For reference, millennials spent only slightly less money when traveling than older travelers; millennials spent $3,317 per trip compared to $3,381 for older travelers.

When it comes to hotel properties, millennials have demonstrated a preference for unique locations, memorable buildings, and a local vibe.  Roughly translated, it goes back to the "water cooler" syndrome; staying somewhere that when you tell friends and colleagues, they are impressed by what you found and even more impressed by the stories of your adventures. And more so than ever before, the story is about an authentic experience and having it validated by others following their Instagram, Snapchat and Facebook accounts.

Certainly, chains such as Hilton, Marriott and Hyatt have rolled out their millennial products.   Curio by Hilton is an upscale brand within the larger Hilton family.  Hotels are independent and imbue a local flavor.  Canopy by Hilton follows a similar path.  Marriott's Moxy Hotels are individual in design and aggressively marketed to the millennial market.  Hyatt Centric, Radisson Red, and Starwood's Element among others presents a modern, boutique, lifestyle, urban hotel catering to the desires of the millennial market.

The challenge facing many hotel developers is the quality of authenticity and uniqueness.  There is one Pacific Northwest company that was millennial-friendly before millennials were born.  McMenamins is a family-owned collection of brewpubs, breweries, music venues, historic hotels, and theater pubs located in Oregon and Washingto.  With roots going back to 1974, the McMenamin Brothers – Mike and Brian – started their ever expanding businesses with the simple notion that it should be fun and cool.  Their first enterprise was a bar called the "Produce Row Cafe" which was on the wrong side of the river in an artist-occupied industrial area of Portland.  Long before the era of craft beer, the McMenamins wanted a place where they and their friends could get "good" beers.  According to co-founder Mike McMenamin, "our initial idea was to make our pubs into community centers, places for people in the neighborhood to gather and have a good time."

Edgefield, a former 330-acre farm was transformed into a 74-acre property complete with 100 guestrooms and hostel accommodations, restaurants, pubs, bars, winery, distillery, soaking pool and golf course
Each of the Edgefield buildings were carefully restored to blend Oregon's natural beauty with McMenamins' signature style of welcoming interiors, delicious food and handcrafted drinks, lush gardens and live entertainment
McMenamins historic Mission Theater is located in Northwest Portland and offers up a full bar and concessions stand for visitors to enjoy special movie screenings, live music, guest speakers, sports event screenings and more
What once was an auditorium at the 1915 elementary school, the Kennedy School Theater now houses comfy sofas, armchairs and tables for up to 300 guests to enjoy pub fare, handcrafted ales, spirits and wines from the Theater Bar
The Kennedy School property's former cafeteria now houses the Courtyard Restaurant which is adorned with comfortable mahogany booths and eclectic light fixtures
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Coming up in March 2019...

Human Resources: An Era of Transition

Traditionally, the human resource department administers five key areas within a hotel operation - compliance, compensation and benefits, organizational dynamics, selection and retention, and training and development. However, HR professionals are also presently involved in culture-building activities, as well as implementing new employee on-boarding practices and engagement initiatives. As a result, HR professionals have been elevated to senior leadership status, creating value and profit within their organization. Still, they continue to face some intractable issues, including a shrinking talent pool and the need to recruit top-notch employees who are empowered to provide outstanding customer service. In order to attract top-tier talent, one option is to take advantage of recruitment opportunities offered through colleges and universities, especially if they have a hospitality major. This pool of prospective employees is likely to be better educated and more enthusiastic than walk-in hires. Also, once hired, there could be additional training and development opportunities that stem from an association with a college or university. Continuing education courses, business conferences, seminars and online instruction - all can be a valuable source of employee development opportunities. In addition to meeting recruitment demands in the present, HR professionals must also be forward-thinking, anticipating the skills that will be needed in the future to meet guest expectations. One such skill that is becoming increasingly valued is “resilience”, the ability to “go with the flow” and not become overwhelmed by the disruptive influences  of change and reinvention. In an era of transition—new technologies, expanding markets, consolidation of brands and businesses, and modifications in people's values and lifestyles - the capacity to remain flexible, nimble and resilient is a valuable skill to possess. The March Hotel Business Review will examine some of the strategies that HR professionals are employing to ensure that their hotel operations continue to thrive.