Time to Hand Over the Youth Mantle: Millennials Grow Up

By Carolyn Childs Principal, Mytravelresearch.com | May 29, 2016

Globally the influence of Millennials on travel and on marketing has been profound. In the US, Millennials are as large a generation cohort as Baby Boomers(1). In China, they are a smaller generation numerically thanks to the one child policy. But as the first generation to benefit from China's astonishing economic growth, 80's children (as they are known) are a wealthy and high-consuming group.

The word Millennial has almost become synonymous with youth. But that is about to change. Millennials (Gen Y) were; broadly speaking born between 1980 and 1995. So the upper end of this cohort is now entering its mid-30s.This Generation (people sharing the same birth years and thus formative influences) is about to collide with lifestage (the needs that relate to age).

So as an industry we need to plan for this tectonic shift in three broad areas: 1) what will happen to their travel behavior as they become parents?; 2) what business travel will look like as Millennials occupy the 'peak of influence' and finally 3) the human capital development implications when Millennials are the majority of managers and leaders within our industry.

Millennials as Family Travelers

As Millennials become parents, their needs and values often converge with those of other generations. Where they once sought 'cool' brands, their brand choices often move to the mainstream as parents(2). They also become more value conscious adopting a 'trading up, trading down' philosophy. They will save on the elements they value less while continuing to focus spending on the experiential elements. Food in particular continues to be a driver for Millennials when they travel – and as parents they are also very conscious of nutritional choices for their families.

Millennials were slow to leave the parental home compared to earlier generations. When they did so, it was often with the help of their parents. As a result, they remain close emotionally and financially to them. As parents this has driven the phenomenon of the multi-generational family trip. The cruise industry has been adept at developing products that meet the needs of this trip – with multi-bedroom suites and larger cabins. It is not just about hard product. In focus groups, we often hear that an absence of pricing and booking services that recognize more complex family structures is a key barrier to purchase. It is important to show that you welcome multi-generational groups as they offer a more superior ROI than smaller family groups.

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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.