Airbnb hasn’t dominated the travel industry just yet, but to keep young travelers checking into national chains, hotels need to know what 13-35-year-olds want…
Gen Z and Millennials have a strong case of wanderlust. A huge majority say they are interested in taking trips, and the jet-setting generations have rewritten the rules when it comes to where to go, what to do, when to plan, and how to budget. And while this means that far-flung destinations are in vogue and extreme activities abound, it has also led to the creation of the biggest disrupter in the travel industry—Airbnb. Since its inception, the home-sharing platform has promised to overtake the hotel industry as thrifty and experience-driven Millennials flocked to its unique destinations, and national hotel chains have scrambled to stay relevant. As it turns out, however, Airbnb is third in line when it comes to where 13-35-year-olds prefer to stay when they travel. Ahead of the Millennial-directed home-sharing service are more classic accommodations. The number one place 13-35-year-olds want to stay? National hotel chains.
This may come a surprise to those in the travel industry who have long braced themselves for the day when Airbnb’s beach bungalows and treehouses officially lured Millennials away from high-rise hotels for good. But so far, hotels have held their own. While Airbnb’s growth rate has been astronomical, it hasn’t yet hurt the bottom line of hotel chains. From 2014 to 2015, the revenue per available room for hotels in the US grew 6%, according to hotel industry research firm STR, and between 2010 and 2015, the price per room jumped $20 to $78.71. A recent survey from Resonance Consultancy also found that 35% of Millennials prefer to stay in upscale or luxury hotels compared to 23% who prefer short-term rentals, according to the Los Angeles Times. And when we’ve surveyed young travelers in the past, national hotel chains have consistently topped the list of their preferred places to stay.
That doesn’t mean that hotel chains haven’t had to do some soul-searching to figure out how to remain relevant to the young traveler, who is more likely to seek out unique experiences, distinct settings, and Instagram-worthy accommodations than previous generations of vacationers. In fact, a new crop of hotels is taking cues from Airbnb, according to Quartzy, opting to be chic, small, and tucked away from touristy areas. Condé Nast Traveler highlighted some in their hot list, including one with just four rooms and even a “converted 18th century villa.” The editor-in-chief explains how some hotels are striking a balance “for people who want to feel a local experience but also want all the amenities, the concierge, the lounge.” Other old-school brands have launched entirely new boutique brands with young travelers in mind, like Marriott’s Moxy Hotels, which include checking in at the bar, free high-speed wifi, local designs, and communal spaces.
But are coworking spaces and fancy coffee bars really what young consumers want from a national chain? In our recent Topline on travel and spring break trends, we asked 13-35-year-olds to tell us what makes them want to stay at specific hotels. Here’s what they had to say:
Design-driven spaces, mobile apps, and social spaces have nothing on a good deal when it comes to luring the Millennial and Gen Z traveler—last year we found that 69% of 18-35-year-olds seek out the least expensive options when travelling. This should come as no surprise to those following the spending habits of young consumers—the thrifty generations are adept at living fully on a low budget. With the majority of Millennials underpaid and saddled with student debt (and Gen Z bracing themselves for the same), saving money for a trip is not easy, so they want to get the most bang for their buck. Which is where some of their other top priorities come into play, like free WiFi, free food, and amenities.
Keep in mind that location is nearly as important as price. Young travelers want to be in the action—or in a unique location—so hotels that reflect the local culture while bringing 13-35-year-olds into it will win out over the edge-of-town budget motels of old. But this also means that hotels have to rethink their own relationship to the areas they’re located in. “It’s no longer just the job of the concierge to give you recommendations,” a Hyatt executive told the Washington Post. “Our colleagues are constantly being asked what their hidden gems are and what they would recommend.” Hyatt’s Millennial-targeted brand, Hyatt Centric, also places original local guides in their rooms (and publishes them on the hotel’s website) with recommendations for local art and food.
While free food surpassed food quality among 13-35-year-olds’ priorities, it’s clear that getting a good and affordable meal at the hotel is important to young travelers. While this is taking shape in the form of chef-hotel partnerships, trendy on-site restaurants, and “Millennialized” menus, some hotels are going so far as to reinvent room service. Hyatt Centric is tapping into the grab-and-go mentality of young consumers by offering food delivered in environmentally friendly packaging. And at Radisson RED, guests can order grab-and-go food—including Belgian waffles with mac and cheese and fried chicken—from its on-site restaurant OUIBar + KTCHN. Not only that, but young guests can order their food digitally through the RED app. Though just 16% of 13-35-year-olds say mobile tools are important to them when it comes to choosing a hotel, young consumers do like their digital tools. By offering them in ways that integrate into young people’s already established habits, national hotel chains can continue to draw them in.
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