Hotels Cater to Millennials and Update Tech

Hotels Cater to Millennials and Update Tech

Spotlight 2016: Millennials and innovative technology rule the hotel industry as demand continues to increase By: Michelle Juergen
The hotel industry is increasingly updating its technology and catering to millennials. // © 2015 iStock
The hotel industry is increasingly updating its technology and catering to millennials. // © 2015 iStock

It’s quite unlikely you haven’t already heard the word on the street: Millennials are taking over. One of the sectors in which this is most evident is the hotel industry, where the generation — which will be the single largest segment of travelers by 2020 — is increasingly choosing to spend its hard-earned cash, particularly at properties that provide personalized service and meaningful experiences.

According to research from MMGY Global, 24 percent of millennials planned to take more overnight leisure trips in 2015 than in 2014, and 60 percent would rather spend their money on experiences than on material things. And hotels are taking note.

“This is a traveler that prizes experiences, being connected every waking minute to the Internet, efficiency, social media and authenticity, among other notable attributes,” said Ignacio Maza, executive vice president for Signature Travel Network. “The hotel industry is responding by creating new brands to cater to this traveler — witness the launch of brands such as Tommie, Hyatt Centric, Sixty, Graduate Hotels, Even Hotels and Lark Hotels in the U.S.” 

In addition, Maza notes, hotels are improving on-property Wi-Fi connections, upgrading dining options and menus and turning their lobbies into vibrant hubs of social life. 

“The travel industry has to ensure it understands the needs and expectations of millennials in order to serve the right product and the right experience to every customer every time — which is a tall order,” he said.

Frances Kiradjian, founder and CEO of the Boutique & Lifestyle Lodging Association, agrees wholeheartedly. 

“The business world must understand that it is all about the millennial mindset — so make sure your marketing strategy includes it,” she said.

Hand in hand with catering to millennials is hotels’ continued investment in updated and innovative technology. Along with hotel groups such as Starwood Hotels and Resorts Worldwide and Hilton Worldwide rolling out keyless check-in and entry, properties are paving the way for guests to control and personalize their experience with the touch of a button.

“A number of hotels provide guests with in-room smart tablets that not only control the lights and temperature, but can also be used to request room service, make spa appointments, notify the bell desk that you need your car brought around, make reservations off-property and request any number of services,” Maza said. 

Aloft Hotels has even recently unveiled an emoji room-service menu, through which guests can order amenity packages that are delivered directly to their rooms by merely texting the appropriate emoji to the front desk. Kiradjian points to other innovations, as well, such as portable boutique rooms for events and lodging retreats that combine experiential stays with education and brainstorming.

As far as demand goes, the U.S. hotel industry is expected to see continued year-over-year performance increases through next year, according to STR and Tourism Economics’ forecast from August. 

For 2016, STR projects the U.S. hotel industry to post an increase in occupancy (0.8 percent), average daily rates (5.2 percent) and revenue per available room (6.0 percent), though it will not see as large a gain in numbers as this year. 

According to a recent travel agent hospitality trends survey from L.E. Hotels, 60 percent of respondents saw an increase in bookings this year, and 84 percent of those surveyed predicted that the industry would continue to see higher demand for hotel rooms and increased prices in 2016. 

This year, the hotel industry spent more than $6 billion in renovations, according to Maza, and next year these improvements will likely continue — along with continued expansion of inventory and more mergers and acquisitions — as properties compete for travelers’ dollars and loyalty. However, though hotel development has accelerated, there is no threat of overbuilding any time soon for the industry as a whole, says Mark Woodworth, senior managing director for PKF Hospitality Research.