Cheap but Cool & Digital

When the U.S. hotel industry set out to capture the older travelers about a decade years ago, they focused on comfortable beds and reasonable workspaces, and rewarded loyal travelers with upgrades and freebies. While this market remains, there’s a new kid in town… literally a new kid – a millennial – who’s yearning to travel and explore. But unlike weary and pained parental and grand-parental bones, this group of nascent travelers has been crashing on couches and floors for a while, so even having a bed is a huge plus to a lot of them. What they really want is cheap, cheap, cheap, networked and device friendly and often something “interesting” (something that might seem “off-the-wall” to an older traveler).

“Travel spending by these younger travelers rose 20 percent in 2010, making them the fastest-growing age segment, according to American Express Business Insights, though they still lag the baby boom generation in overall spending… ‘All of the major brands — Hilton, Starwood, Marriott, InterContinental — have developed hip products that are targeted at the younger traveler,’ said Chris Klauda, a vice president at D. K. Shifflet & Associates, a travel and hospitality market research company… Hotels that ignore these younger travelers, said Mark Woodworth, president of Colliers PKF Hospitality Research, will be at “a very severe competitive disadvantage.” New York Times, March 12^th.

I see the trend in my own family. Even when he was in college, my son, a 2006 Duke grad, was traveling all over the states, and on occasion would dig into his summer savings and venture overseas. He’s getting married in May, and “interesting,” cost consciousness and networked have led him to St. Lucia for his honeymoon (ok, it’s a pretty romantic spot!). Ever since he was a freshman in college, he was a whiz at trolling the Web and finding every bargain on every form of transportation imaginable. He could find the best restaurants at the best prices, occasionally scoring a coupon that simply seemed too good to be true, and scoped out towns he was traveling to with uncanny expertise. He was the king of cheap, with a touch of quality and style. I can’t tell you how many of his recommendations led me to hotels where millennials were on the “very cool roof bar” socializing at a function created by the hotel to cater to that market segment.

“Many hotel owners and operators are remodeling existing hotels or introducing new ones that offer free hotelwide Wi-Fi connections; large, welcoming lobbies with plush, comfortable furnishings; state-of-the-art fitness areas; in-room power consoles to plug in iPads, laptops and other devices; and stylish bars that spill into the lobby… Some are also scheduling nightly social events, like happy hours and free wine tastings, aimed at luring the iPhone-toting generation to their hotels...

“Younger travelers also tend to visit three or four different restaurants and bars a night, so some hotels are opening up multiple bars and lounges with different themes at different times of the day to keep them in the hotel. Many also offer free daily events, including tea tastings, yoga sessions and wine tastings,” NY Times. Peace and quiet give way to bold architecture and a happening scene. No high-speed Internet or extra charges for usage, and there goes that market segment. It’s a basic as running water and electricity. Cool remotes for lights, TV, etc. – like an iPad designed to control these functions in every room (Plaza Hotel in NYC) can make a difference too. So what if the room is only 200 square feet! Think how small their dorm room was and how many years they found that sufficient. But remember, if you are indeed a more mature traveler, that bargain you found online might just provide a bit more noise than you might want… at 2 am.

I’m Peter Dekom, and I can’t wait to see these same travelers in just a few year years with their kids in tow!