Virgin describes its guests as trendsetters, creatives and entrepreneurs. // © 2015 Virgin Hotels
Feature image (above): Brands are anticipating the needs of millennials in the next five to 10 years, when the group achieves its peak spending power. // © 2015 Thinkstock
There’s no sense denying it — millennials matter.
This year, the generation born in the 1980s and ’90s will surpass baby boomers as the nation’s largest living generation, according to a forecast by the U.S. Census Bureau. Forbes has named 2015 “The Year of the Millennial Consumer,” and Accenture research predicts that millennials in this country will spend about $600 billion by the year’s end.
While that sounds like an enormous amount of revenue, the total is expected to soar as the generation reaches its peak spending years. To that end, London-based market research firm Mintel estimates that millennials in the U.S. will have more than $1.4 trillion to burn by 2020.
Travel planners hoping to tap into the market need not fret. Millennials are actually using traditional travel agents at a higher rate than other age groups, a recent study suggests. Travel and hospitality marketing firm MMGY Global found that 28 percent of millennials used a traditional travel agent in 2014, compared to 15 percent of generation X and 13 percent of baby boomers.
“There are so many great things an agent can bring to the table, and it’s our job to look out for our clients night and day,” said Tyler Diehl, CEO of Zapdog Travel, a corporate and entertainment travel agency for millennial clients. “That’s not something you’ll get through Orbtiz. My clients are mainly people who have never used an agent before, so it’s an ongoing learning process for both sides.”
Because top travel brands have been monitoring millennial trends closely for years, there’s more youth-oriented product for travel agents to sell than ever before. Just about every sector of the industry has responded by creating new brands expressly for millennials, adding creative services and amenities or completely overhauling brand communications to appeal to this profitable travel segment.
Carlson Rezidor Hotel Group is just one of several hospitality brands introducing new concepts they hope will attract next-gen travelers.
“For Carlson Rezidor, it wasn’t a matter of asking ‘Where do we need to be now?’ but rather determining what the landscape and our customer will look like in the next five to 10 years and trying to anticipate that need,” said Rich Flores, Carlson Rezidor’s vice president of branding, the Americas.
In the first quarter of 2015, Carlson Rezidor is expected to announce plans to bring its Radisson Red hotel chain to the U.S. (its first property will debut in Northeast China in 2016). Red promises bold design as well as hyper-personalization through a mobile app. With a few taps and swipes, guests can opt to have the minibar pre-stocked with their favorite drinks or have family photos populate the television screen when they enter their room. They can also arrange for an airport transfer on the fly and check in to their guestroom en route.
“The emergence of millennial attitudes is driving this trend,” said Flores. “It comes at a point where there’s a distinct and growing opportunity to produce something new, something that the market as a whole isn’t offering right now.”
Virgin Group, too, has identified future opportunities. Sir Richard Branson’s empire is expanding with a hip hotel brand and plans to operate two 4,200-passenger cruise ships in the coming years.
The venture capital conglomerate marked its foray into the hospitality sector in January with its first Virgin Hotels-branded property, Virgin Hotel Chicago, and a creative social media campaign that asked participants to spread far-fetched rumors about the brand for a chance to make them come true. Virgin has plans to open a second location in Nashville, Tenn., in the summer of 2016 and a third property in New York City in the fall of 2017.
“Our guests have an entrepreneurial and adventuresome spirit,” said Laura Kilroy, Virgin Hotels’ communications and social media manager. “They’re trendsetters and leaders. They take risks and push boundaries, and many are part of the creative community.”
This summer, Commune Hotels & Resorts will launch its long-anticipated Tommie brand, a “micro-lifestyle” hotel portfolio for young (and young-at-heart) global travelers. Tommie, a sister brand to Thompson Hotels and Joie de Vivre, will feature ergonomic guestrooms, casual communal dining experiences and meeting spaces that serve as “incubators for productivity.”
Not to be outdone, Marriott International, Inc., has also been working to attract younger travelers. Last month, the hospitality chain announced plans to bring its stylish three-star Moxy brand to U.S. soil in 2016. Trendy bars, contemporary art and free Wi-Fi connectivity come first at these properties, but guests will have to be open to its compact, European-style guestrooms. Moxy’s lobbies are designed to be social hubs with ample power outlets for personal devices and the Moxy Digital Guestbook for streaming videos and pictures via Instagram.
“The old, conventional hotel model no longer applies,” said Toni Stoeckl, vice president of lifestyle brands at Marriott International. “Our campaign extends beyond the traditional travel space toward a fully integrated brand initiative comprising contemporary art, design and cultural outreach to innovative designers, architects, fashion brands and film sectors in order to appeal to this new generation.”
Marriott has even entered the content business, partnering with major YouTube stars and pop-culture media brand What’s Trending to produce video content that showcases the power of mobile check-in. Marriott’s newly formed Content Studio went as far as creating the original short film “Two Bellmen,” which will premiere in March at the JW Marriott Los Angeles L.A. Live, where the movie was filmed.
However, it’s not just forward-thinking hotel brands that are courting millennial travelers. Destinations see growth opportunities as well. The Greater Fort Lauderdale Convention & Visitors Bureau, for one, has assembled its own Millennial Advisory Board and plans to reach the untapped market with a “Hidden Gems” video series, a digital magazine, Pandora advertising campaigns and videos that promote Broward County’s diversity and multi-culturalism.
“Marketers across all sectors are rushing to learn more about millennials, and it’s a challenge to come up with a ‘one-size-fits-all’ strategy because of the size and diversity of the generation,” said Nicki E. Grossman, president and CEO of the Greater Fort Lauderdale CVB. “A big mistake is to stereotype millennials — they are the least-cliched generation today. Those trying to target the group should build marketing efforts to be authentic and appealing to the particular segment that their research shows will be the most receptive to their offerings.”
Thailand, for example, has taken a more targeted approach. A popular destination for younger travelers for decades, Thailand’s tourism board is currently focusing on converting today’s tourists into repeat business.
“Thailand is a destination that experiences strong repeat visitation from those who discover it, and we believe if we can capture travelers in the adventurous period of their 20s and 30s, we will have them as visitors again later in life,” said Ben Fleming, Tourism Authority of Thailand’s marketing manager.
Thailand’s natural environment, affordability and exotic appeal resonate with young explorers, and recent marketing campaigns have put their experiences front and center.
Through a partnership with the Web platform DreamJobbing, the tourism board offered contestants a chance to travel to Thailand and work as a wildlife volunteer, aiding in conservation efforts for the Asian elephant. Contest applicants filmed themselves telling the world why they were perfect for the job, and a social media-driven voting process ensured that a much broader audience would learn about the campaign as well.
Getting Gen Y Onboard
In addition to seeking authentic and socially conscious travel experiences, millennials want to be connected at all times and be able to share their best moments while on vacation. Until recently, this evolving attitude toward technology and communication had been a major obstacle for the cruise market.
Knowing that millennials simply won’t tolerate slow Internet connections, Royal Caribbean International (RCI) put an emphasis on delivering broadband Internet at sea. With HD video streaming capabilities, Quantum of the Seas and Allure of the Seas enable guests to binge-watch their favorite Netflix original series, Skype with friends and family back home or match with a cruise crush on Tinder.
In the same vein, Carnival Cruise Lines is rolling out enhanced Internet services that include the cruise industry’s first social media package, enabling guests to access popular sites such as Facebook, Twitter and Instagram for $5 per day.
“We’re also piloting a mobile app on Carnival Breeze that provides guests with a variety of information on their cruise experience — from an at-a-glance look at the day’s activities to dining options and itinerary choices — along with a unique chat feature that allows them to communicate with their traveling party onboard,” said Stephanie Evans-Greene, Carnival’s vice president of brand communications.
Even the hardware of the ships themselves has advanced in order to accommodate today’s adventure-seeking, seen-it-all travelers. Carnival Vista, set to debut in 2016, will offer a SkyRide suspended cycling experience, the first IMAX Theater on a cruise ship and the RedFrog Pub, which will feature the line’s first onboard brewery. RCI’s latest ship, Quantum of the Seas, features the Ripcord by iFly skydiving simulator, a FlowRider surf simulator, bumper cars and disco roller skating.
Norwegian Cruise Line’s Norwegian Escape will debut in October with Spice H20, an adults-only pool and lounge area inspired by Ibiza’s beach parties, and a three-story ropes course, complete with five zipline tracks. Fearless cruisers can also test their courage on The Plank, a six-inch-wide beam that extends eight feet from the side of the ship.
The latest and greatest products on land and sea are innumerable, which only works in favor of travel advisors who want to earn millennial business. In today’s environment, there are almost too many options to choose from and too many decisions to weigh.
According to Taegan Walker, CEO of Montana-based Get Lost Travel, the key to gaining a younger clientele is understanding the millennial mindset and earning their trust. Walker has found great success in showing her Gen Y clients the value in booking with a travel advisor. She often closes the deal by convincing clients that she can take out all of the guesswork, save them time and create an itinerary that is completely customized to their unique preferences.
“Millennials are experiential travelers who work hard and play hard,” said Walker. “If you can show the potential client that you are honest, here to be the best steward of their hard-earned dollar and that you can deliver the kind of efficiency we have come to expect in our day and age, then you have their attention.”