How simple marketing and pricing hotel rooms appears to have been in the past. Before
the Internet took over with third-party booking portals and independent hotel review
sites, hoteliers typically relied on travel agents, telephone directories and traditional
print advertising to attract baby boomer travelers. The number of booking channels
available to this demographic was typically limited to calling the hotel directly or
speaking with a travel agent who would do this on their behalf. Unless a savvy consumer
felt the urge to call a number of hotels in a specific location and compare prices, there
wasn't the instantaneous pricing transparency that is available today through online
comparison and review sites.
Just as technology is constantly changing, so too is the way both business and leisure
travelers book hotels. These days, when a traveler books a room in an unfamiliar city or
location, their selection process is much different than it was in the past. They may not
even speak directly with a hotel or travel agent, much less pay attention to the
traditional star-rating system once relished by the hotel industry. In many cases, guests
now look to third party review sites for impartial reviews to 'aid' in the selection process.
However, not all guests rely on these new technologies, and many people may still use
traditional booking methods. It is important for hoteliers to understand the three major
age demographics: Baby Boomers, Generation X and Millennials, and some of the
common motivations and desires of these groups in relation to their accommodation
wants and needs.
Baby Boomers
Baby Boomers have been faithful customers of
the hotel sector for many years and were the primary focus of marketing and
promotional efforts for countless years. They were the generation that started traveling
purely for pleasure and helped kick start growth in the travel-for-leisure sector.
Increasingly, and as the business world became more interconnected in the 1970's and
80's, this was also this generation that began traveling nationally and internationally for
work, facilitating the expansion of the business travel market.
Baby Boomers have generally been a more straightforward customer group for hoteliers
to market toward, relying on traditional media outlets and travel agents to inform them
of potential accommodation choices. Baby Boomers are also generally more loyal
guests compared with younger generations. In fact, a Baby Boomer traveler will
frequently return to the same hotel if they have a good experience with the venue,
leading to the adoption and widespread update of hotel loyalty programs across the
globe.(1)
Hoteliers looking to attract and retain Baby Boomer guests should focus on offering
value for money but also recognizing, acknowledging and respecting this demographic
for being a return guest. Additionally, this is the generation that is most accustomed to
dealing with people directly, so it is important that face-to-face customer service is
highly prevalent to accommodate any guest queries or concerns.
Generation X
Generation X travelers have helped substantially
grow the business and leisure travel markets over recent decades. Similarities exist
between Gen X and Baby Boomer travelers, but the former are typically less patient than
their elder generation and respond well to praise and recognition of their patronage.
Unlike Baby Boomers, who travel for business and are more likely to carry out work in
their hotel rooms, Generation X business travelers enjoy working in more social
environments. Therefore, hoteliers looking to attract and retain guests from this
demographic should ensure they have adequate business lounges and lobbies in place
to create a welcoming, but professional work environment. A recent study by Delliotte
stated:
"Two-thirds of [Baby Boomer] respondents (67 percent) say they often work in their
hotel room, with younger business travelers enjoying working in more social spaces,
such as executive/business lounges and the lobby or common area. Nearly two-fifths
(36 percent) of the 18-44 year-olds surveyed say they often work in the lobby or
common area, while only 17 percent of those 45 and older do the same." (2)
Additionally, while Baby Boomers generally have a greater sense of loyalty and
commitment to traditional forms of work, Generation X is the first age demographic
typically demanding a life outside of work, or 'working to live', and not the other way
around. It is important for hoteliers to incorporate social spaces into their properties like
bars and restaurants to accommodate for Generation X's greater desire for social
interaction as both business and leisure travelers.
Millennials
The Millennial, or Generation Y, age demographic is
a growing consideration for the hospitality industry given this group's spending power
increasing, particularly in leisure travel. While Millennials may not currently equal Baby
Boomers in terms of the number of business of leisure travelers, reports suggest that in
North America alone there will actually be 78 million Millennials (at the peak of their
spending power) compared to 58 million Baby Boomers by 2030.(3)
Given the growing importance of Millennial travelers to the hospitality industry, it is vital
that hoteliers around the world better understand some of the key motivations of this
age demographic and how they relate to the hotel sector.
It is a commonly held belief that Millennials seek immediate gratification, and that this
underlying impatience extends to hotel visits. Having grown up with technology and
instant information which has helped streamline everyday tasks, Millennials can feel
put-off by a stay in a new hotel if they encounter long check-in lines at reception. To
this end, hotels looking to attract Millennial travelers in the future should consider
electronic check-in options to accommodate for the tech savvy, but time poor, younger
generations. The Delliotte study also noted:
"When it comes to interacting with hotel staff for check-in, almost two-fifths (36 percent)
of the 18-44 year-old respondents favor automated kiosks rather than checking in with
a hotel employee at the front desk. Whereas only 19 percent of the 45 and older survey
participants say they prefer automated kiosks."(2)
Millennials are the most independent travel generation the hospitality industry has
encountered to date. Trends show younger people are performing more research, on
more online booking platforms, before booking hotel rooms without the help of a travel
agent. This generation is clearly more reliant on information online and it is important
hoteliers accommodate for this by having comprehensive material presented on their
websites, along with a strong social media presence to help facilitate a Millennial
traveler's selection process. A solid good hotel website may also make a Millennial
traveler less likely to visit third-part review website, which are "not beneficial for hotel
operators and owners as they cannot control the content on those sites. Therefore, if
accurate substance is readily available and easily accessible, Millennials will easily
obtain the answers they are seeking." (3)
Interestingly, although it is commonly assumed that Millennials are not as loyal when
compared with older generations, research also suggests they will commit to brands
they believe in.
"When considering loyalty, nearly half (46 percent) of the 18-29 year olds say they
prefer to stay at their favorite hotel brand even if it is not conveniently located, whereas
37 percent of those 30 and older do the same." (3)
Hotels Need to Change with the Times
Each generation's needs
and desires are different, so those operating in the hospitality industry need to adapt to
the changing marketplace or risk turning away potential guests in the future.
Hoteliers need to recognize the consumer is now in control at the heart of the
experience. They are able to directly communicate with wide numbers of potential
guests and inform them positively or negatively about their experience with your hotel.
Therefore, it is vital for hoteliers to ensure they are offering guests experiences they
can't get anywhere else and developing personalized stays based on their preferences
and behavior. For example, this may mean that, to better cater for Millennials,
complimentary Wi-Fi is offered, or business centers are designed for Gen X travelers.
Hoteliers looking to better cater to all of the different generations, while offering
customized stays, should consider allowing guests to choose their hotel rooms not just
on class, but on specific room attributes like sunrise rooms, rooms with a stand-alone
baths or conveniently located rooms near the gym. Additionally, guests should also be
able to view the availability and cost of a hotels ancillary products, such as spa services,
and package them with their rooms to be able to self-create a customized stay of their
choice.
Hoteliers not only need to ensure they are offering customized guest experiences, but
also ensure they are present across all new media and communication channels. With
the rise in usage of social media outlets like Facebook, there are more touch points
than ever before for a hotel to interact with potential guests.
While some hoteliers are reluctant to fully engage with the wider community on social
media, this does not mean that the conversation about their hotel is not going on
without them. It is the savvy hoteliers that are monitoring what is being said about their
hotel on social media and acting where appropriate that are gaining the most benefits
from this new digital age. For example, if the prevailing comment in social media about
a hotel is that the check-in process was tedious, the operations team at the hotel will
likely pursue a solution to create a better experience for guests. In the same way, if a
hotel is highly rated with the majority of comments related to the tastefully decorated
rooms and comfortable beds, the marketing department will build on these positive
reviews and revenue managers may be able to consider strengthening the pricing
position of their rooms.
Understanding the Generations Means Understanding Your Guests
The hotel booking market is increasingly fragmented and hotel owners and
managers alike face challenges in ensuring their properties remain relevant to the
major generational groups and their different motivations and wants. It is those
hoteliers who research and understand the different generations and what their property
means to them, while also understanding how the hotel guest is today in charge, that
will be best placed to secure customers in the future.
References:
1) http://hotelnewsnow.com/Article/13149/Solving-the-
loyalty-dilemma-for-independents
2) http://www.hotelnewsresource.com/article59875.html
3) http://www.hospitalitynet.org/news/global/154000320/4060316.html
IDeaS, a SAS company, is the world's leading revenue management software and services provider. Combining industry knowledge with innovative data analytics technology, IDeaS creates sophisticated yet simple ways to empower revenue leaders with precise, automated recommendations they can trust. With 35 years of expertise serving hospitality, including hotel, event, and parking clients, IDeaS delivers revenue science to more than 30,000 properties in 164 countries around the world. Results delivered. Revenue transformed. Discover greater profitability at IDeaS.com.
