Millennial (born between 1981-1997) are the fastest growing customer segment in the hospitality industry, and by 2005 they will account for 50 per cent of all travelers.
Much has been done to understand this market segment and how they research, engage and book. All point to a shift to digital media. American Express survey recently found that more than 72 % of Millennial travelers prefer to spend money on experiences than things.
As they say “millennials redefine luxury experiences”. They love to travel to discover and experience! “Quality and time off are top priorities, so they are willing to splurge on luxury.” They are about to redefine luxury experiences & marketing. The article by e-hotelier concludes that to Millennials requires “a strong emphasis on empathy and personal customer connection.” Social media is a vital part now of any marketing to this sector and should be used to engage, build trust, loyalty and community.
“Millennials get much of their news online, through blogs and whatever pops up when they are surfing the internet and especially Facebook. In addition, they pay attention to mainstream top tier media like Conde Nast Traveler, The Wall Street Journal, The Huffington Post and The New York Times. Those carry tremendous influence. The stories that appear online from such outlets are highly valued by Google, and indexed at the top of a search.” Articles published on the authority sites are highly influential and also create backlinks that are invaluable.
We have noted before how important experiences are becoming and this article empathizes the need to create personal experiences.
Lorraine has had a 30 year, award-winning, boutique travel PR firm in New York City and is at the forefront of trends affecting traditional and digital media. Her firm has represented such blue-chip names as Four Seasons and Hilton Hotels, as well as boutique properties across the globe and island destinations including St Barth’s and Necker. The agency’s affordable hotel PR and digital campaigns are designed to move the needle regularly gaining eye-catching feature exposure in such top outlets as The New York Times, Travel and Leisure and Conde Nast Traveler. For more information about this boutique New York City PR firm visit www.AbelowPR.com. You can contact her at Lorraine@AbelowPR.com or 203-226-9247.
It is clearly a good sign for agents, that “Millennials Use Travel Agents More Than Other Traveller” and I believe that means your regular walk in travel agent and not the Booking.com or Expedia variety we call OTAs.
Although the reports says it helps if the agent has a strong online presence, it’s not altogether clear who they are talking about and they say:
“While ASTA wouldn’t break out what kind of travel agents were being used the most, Kerby conceded that the travel agent space at large still faces an identity crisis.”
It is also noteworthy that Millennials “Usually search online or on social media [when looking for a travel agent]”. It definitely help if the agent have a strong online presence so that they are come up in the search made by millennials.
Key Finding of the ASTA Survey
Here are some interesting facts from the study
22 percent of Americans from households earning more than $50,000 booked travel through a travel agent, an increase from 14 percent just three years ago
Millennials are more likely to use an agent than any demographic group of older travelers
30% of millennials have used a travel agent in the last 12 months. They’re also most likely to recommend agents to a friend.
45 % of millennials said they’re likely to recommend a travel agent to a friend or family member.
66% said using an agent makes their trip better
Travellers who use travel agents generally spend than those who book trips themselves.
ASTA’s survey conducted by TNS Global, included 14,000 U.S. households with household income above $50,000 US.
Understanding Millennials, Generation X to Z & How they are Changing Travel
There has been a lot of talk recently on how millenials are changing travels. They are the latest wave of the new generations that are now having a significant impact on tourism. Like impact-generations before them they bring a new set of ideals and behavior to the table. They are the generation Y. But to understand their place in history we need to go back to the Babby boomers.
This series of article is pieced together from several trends starting with a review of the impact of the new generations. The article is influenced by the blog on talenedtheads, and a lot more. Talendheads take us back to the Baby boomers and step through the generations that to understand how generation XYZ are changing travel.
Thais article also looks at what is playing out now because of these and related influences, namely government action to curtail OTAs and put hotels in a better position to compete.
Generation X: Boomers
The Baby Boomers are people like Steve Jobs, born just after World War 2 from during 1946 to 1964. After the war as western nations recovered from the economic turmoil of the war years, their was spike on birth and these new babies experienced formative years of economic growth and prosperity. They have influenced markets as affluent buyers and are now retiring with more wealth and spending power that all generations before them.
Generation Y: Millennials
Born between 1980’s and the early years of 2000, are referred to as Gen Y, or the Millennials. They have been shaped by the technological revolution and the financial crisis. They are people like Adele and Kate Middleton, connected more that any generation before them. Many grew up seeing their Baby Boomer parents working long hours at corporate jobs and this has influenced their own views on life and work-life balance. >> millennials-strike-another-blow-to-otas
By 2015 Millennials will outgrow Baby Boomers in absolute numbers (U.S Census Bureau). That is there will be 75.3 million Millennials, VS. 74.9 million Boomers, and that will be the largest generation in the USA.
Generation Z: Next
Born after the Year 2000, these are the children of Generation X and Generation Y and include Stars like Brooklyn Beckham. They are too new to have left their mark, and we can only speculate as to what will drive them and what impact on society they will have. But we know they will be living in a new age of advanced technology, a time of dramatic changes in applications and enhanced function and reality. This is the generation that Wake up connected.
Impact on Tourism Marketing.
In our previous blog on the millennials we saw a dramatic shift to more frugal and independent shopping, with less reliance on online agents and a tendency to want different experiences, no more cooky cutter holidays and a preference to do it themselves and book direct with hotels as apposed to OTAs. This will set the stage for the travel industry of the future.
OTAs on the Chopping Block
We expect the rapid and universal access to information and application will make it easier to book direct and we fully expect that OTAs will loose their current mass appeal. The shift is even happening at political and national levels where governments are curtailing powers of the OTAs to create a more even playing field for hotels and tourism operations to compete direct.
Governments Take Action to Level the Playing Field
The recent moves by Hotel associations worldwide have put pressure on Governments to legislate against OTAs demanding rate parity. The new legislation being put in place now will make it illegal for OTAs to insist that hotel cannot offer better prices than they have negotiated. As a result Expedia and others are forced to axe the programs and renegotiate with hotels.
It goes further saying that hotels must have control over the rates that OTAs offer. Often OTAs have used their special net costs and deep discounts to their advertized rates, sometimes below their costs, to create loss leaders. All this has put them into top spot on the best price radar. But that too is ending. It is a fine time for hotel to jump into the drivers seat.
I have covered the trend in direct vs distribution or travel agent assisted booking for some time now, its been gradual and slow but the latest stats and thinking see a dramatic change in booking patterns. Namely that travelers are moving away from OTAs and booking more direct with the hotel.
A large part of this shift is because of the fastest growing segment of the demographics. that is the millennials, or people born between 1982 and 2002. This group has overtaken Generation X and their impact will grow considerable as they mature. Conor Fitzgerald of Goldmana Sachs forecasts that “By 2038 Millennials will be the most important financial generation in America and industry will have to adapt to fill their needs.”
Millennial have a distinct approach to consumption that is shaped by the financial crises, social media and the Internet. Typically they buck the trends and have a very much more do it yourself mentality. They don’t care for frills and luxury or possession as much as their predecessor and I believe this attitude is prevailing more and more and will effect travel, banking and all sectors of the economy (see more on this at the Globe and Mail, June 25th 2015).
Having read the article in Canada’s Globe and Mail I am eager to apply that thinking to what is happening in Travel. MMGY Global’s 2015 Portrait of American Travelers (POAT) documents this convincingly and its findings are analyzed by TravelPulse in a recent article. It too concludes that Millennials Strike Another Blow to OTAs – Here is a snap summary:
Travelers are increasingly migrating from OTAs
Travel shoppers are increasingly going directly to travel supplier websites to both research and book travel. “Only 58 percent of travelers surveyed said they obtained travel information from an OTA during the past year, down significantly from the 84 percent who did so in 2014. On the booking front, the survey found that among travelers who regularly seek information from an OTA when planning a vacation, only 13 percent typically book their reservations on OTA sites, down from 36 percent just one year ago.”
It seems that the main reasons for booking direct are to get the best price (64 percent) and find it more convenient than booking with an OTA (67 percent).
Now to be accurate the study does not track all of this back to Millennials, but the point is this is precisely the sort of behavior we see with this group and it is only going to become more pronounced as they mature and influence more. The report does show that Millennials are reshaping the travel industry in surprising ways:
How Millennials are Reshaping Travel
Many believe millennials are apt to seek travel experiences in far off and more exotic locales, yet more and more are opting to enjoy adventures in their own backyard. More than any other age cohort, millennials are increasingly interested in “staycationing,” with over half (55 percent) taking a vacation close to home as an alternative to traveling a greater distance during the past year. This figure is up 14 percent from 2014 and up 23 percent since 2013. They also appear to find cruising an affordable and convenient vacation option to explore.
Millennials are also using more non-traditional options for accommodation and booking with Airbnb and HomeAway. They are first to use ride-sharing services like Uber. This trends is also hot with GenXers and boomers:
While 80 percent of millennials use these services they are popular with boomers (74 percent) and GenXers (72 percent)
Hotel Direct Marketing Needs a New Strategy
Many hotel have taken the easy road and built their distribution network at the expense of their own website. Too often Hoteliers feel the OTAs understand marketing better than they do and can afford to dominate search results with strategic SEO and marketing. They spend millions on media advertising and attracted millions of travellers. That is still true but, as we see, it is changing. For hotel managers who want to market direct, there are several things that have to be put in place. First is the Messaging. Often the hotel marketing message is fragmented and full of platitudes. This is a mistake that many business owners make- Check out the Power Consultants suggestion for fixing this and other issues – see 2 common messaging mistakes that may be killing your marketing – AllCast PowerConsultants
“In four years, 60% of our business will be millennials,” says Mr. Marriott, who adds with a laugh, “All of us old folks are moving on.”
Mr. Marriott says the company now pulls data focus, groups, research and from social media. As an Example, it asks guests for ideas of how to improve travel. “When one wrote back asking for healthy vending machines, the company flew her to London to find items in farmers’ markets that could be stored in a machine.” Now the Company will launch the first of its new nutritious vending machines—with items such as fresh fruit and energy bars—in Chicago this fall.
Bill Marriott, the 82-year-old chairman of Marriott International, syas we have to be cool: The $19 billion hotel-management company, is done with flowered drapes and white tablecloths. In place of fusty bedspreads and fluffy carpets, he wants most of his 200 new luxury and lifestyle hotel projects to be filled with sleek flat-screen TVs, hardwood floors and hopping bars.
Marriott will soon launch its new hotel chain, Moxy Hotels, aimed at the millennial generation (roughly ages 18 to 33). It will feature small, low-cost rooms with grab-and-go food and the feel of a Silicon Valley startup.
– See more at: http://online.wsj.com/articles/bill-marriott-where-hotels-are-going-1405716717?