Three tips to boost bookings with millennial guests

By Mike Murray, founder of Vir.al, the new inspiration/hotel booking app/website

In the past five years, millennials have been a widely discussed topic in the travel industry; you’d be hard-pressed not to have noticed how much impact they’ve had on the way that we, as an industry, do business.

But even though millennials are changing the hospitality industry in ways that we might never have expected, many would prefer that we adapt more quickly. Unfortunately, that means that unless you were one of the few properties who adjusted quickly enough to suit the needs of the market, you are missing out on many bookings from this valuable demographic.

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First and most foremost, travel is more highly prioritised among millennials than previous generations: Millennials travel more for both leisure and business compared to Generation X and Baby Boomers and have the highest average spend per trip. As a collective group, millennials spend over $200bn on travel each year.

Although many lament the financial prowess of the entire generation, millennials make up 21% of consumer discretionary purchases, which is estimated to be over a trillion dollars in direct buying power and a huge influence on older generations. When it comes to lodging, millennials make up 70% of all hotel guests.

That’s the good news. Unfortunately though, there is also significant bad news for hotels.

Unlike previous generations, 72% of millennials choose to prioritize experiences over luxury and material goods.This preference is the basis of the emerging Experience Economy, in which “businesses must orchestrate memorable events for their customers, and that memory itself becomes the product.” As such, millennials often prefer alternative accommodation options to traditional hotels because they offer a more authentic, local experience while traveling.

In general, millennials have lower incomes than previous generations, coupled with higher levels of debt, making them particularly sensitive to the value proposition of a product or service; in fact, “millennials check an average of 10 sources before making travel purchases to make sure they pay as little as possible.”

Because of millennials preference for value and experiences, hotels are losing market share with this highly valuable market; a recent survey by Morgan Stanley showed that 51% of respondents who used Airbnb were under the age of 35 and forecasted that Airbnb will have decreased U.S. and European hotels’ revenue per available room (RevPAR) by 1.8% in 2017 and 2.6% in 2018.

Not very good news, is it?

Tip #1: Embrace Technology
One of the most commonly discussed characteristics of the millennial market is the importance that they place on being “always connected” on their smartphone. When planning trips, the smartphone is once again one of the most important tools for millennials, as 75% of millennials have travel apps on their phones. In addition, it is important that your property’s website be responsive, as 90% of millennials have researched travel on a laptop/desktop computer, 74% have used their smartphone/tablet and 62% have used only a smartphone.

Tip #2: The Power of Social Media
Socially active millennials are valuable guests for hotels because they often do significant word-of-mouth advertising, which can have a significant impact on a property’s occupancy and RevPAR; in fact, millennials’ word-of-mouth endorsements have been shown to influence 16% of millennials to book travel.

Socially active millennials are also more likely to review and recommend a property online, which is important because 89% of millennials trust recommendations from friends and family more than claims [made] by the brand. In addition, nearly half (44%) of millennials are willing to promote products or services through social media in exchange for rewards, making it important that hotels embrace channels that enable hotels to offer valuable savings to reward guests’ social activity.   

During their trip, millennials will often post photos, videos and stories from their travels and tag the location (your property!), so make sure that you are offering unique, beautiful settings, experiences and events to encourage social sharing. Being tagged in these posts increases your property’s visibility to other millennials, which can have a significant impact on your bottom line, as 86% of millennial travelers were inspired to book a trip based on content they viewed online.

Tip #3: Loyalty & Reward Programs
Hotel brand loyalty is at an all-time low with millennials, as 81% of respondents do not consider themselves as being loyal to a specific hotel or hotel brand. Unlike previous generations, millennials are willing to sacrifice luxury (in their accommodation choice) to ensure that they can still afford amazing experiences during their trip, but that doesn’t mean that your property needs to discount to boost bookings with millennials. Instead, embrace loyalty programs to offer discounts and deals to value-conscious millennial travelers; studies have shown that 78% [of millennials] are more likely to purchase from brands that offer loyalty programs.

If you don’t have a loyalty program for your own property, list your rooms with millennial-targeted booking apps/websites that offer similar loyalty programs (or rewards) to potential guests for booking through the channel.

So what are you waiting for? It’s time to embrace the millennial market. Trust me, your bottom line will thank you for it!