While a desire to travel isn’t unique to any generation, millennial, and Generation Z consumers may be among the biggest adventurers our world has ever seen. Younger generations are no longer aiming to start families or purchase homes — two goals that have become less attainable with rising costs — but instead, they’re aspiring to see the world.
However, rising revenue in the hospitality industry doesn’t indicate that businesses are bound to succeed. The unique spending habits of millennials and Gen Z are quickly shifting hospitality trends.
Another significant shift brought about by Millennials and Gen Z is their pursuit of personalized and memorable travel experiences. They value authenticity, local culture, and Instagram-worthy moments. As a result, hotels have started to design creative and social spaces that cater to these desires, such as thematic lobbies, vibrant rooftop bars, and activity-based areas. You can find some of the best fun hotels in this link that embody this trend, providing unforgettable stays for the younger generations.
Due to the distinct economic situations, younger generations have experienced in their lifetimes, from massive student loan debt to the Great Recession, millennials and Gen Z are more particular about how they spend their money. Here’s what they’re prioritizing — and what they’re not.
More Saving Means Careful Spending
Though younger generations are certainly prioritizing travel, they’re also not spending an extravagant amount of money on travel — both out of necessity and by choice.
With debt growing and cost of living soaring, many millennial and Gen Z consumers must dedicate a significant portion of their incomes toward everyday expenses. This makes it difficult to maintain a large amount of spending money after purchasing the necessities.
At the same time, younger generations see the importance of saving. The majority have a savings account that they contribute to weekly or monthly — and on average, only 11% of their savings are bookmarked for travel. Increasingly, as a result of the COVID-19 pandemic, millennials and Gen Z are prioritizing retirement savings and student loan repayment over eating out.
Faced with limited travel budgets, younger generations are making wiser travel decisions. This means hospitality companies must cater directly to their values and interests — and perhaps offer deals, discounts, and travel tips — to get any business from millennials and Gen Z at all.
Cultural Experiences Are In Demand
While younger generations are having a harder time saving large amounts of money than their parents, they aren’t unwilling to spend. They’re simply prioritizing experiences over material goods. Millennials and Gen Z may not be swayed by hotel gift shops, but they’ll spend money to visit unique sites, try craft beers, or experience once-in-a-lifetime activities.
The rising demand for cultural experiences is a particularly strong hospitality trend. Most millennials choose new cultures over partying and shopping, while most Gen Z travelers are prioritizing international destinations. If your business can offer an experience that’s completely unique to your city (or your business), you can stand out.
Accommodations Must Be Worth the Price
One trend that greatly differentiates younger travelers from their parents is their relatively low spending on accommodations. When traveling, the average baby boomer spends over twice as much on a place to stay than the average millennial.
To attract millennial and Gen Z consumers, hotels and other hospitality businesses can take advantage of their love for deals and experiences. Cultivate an unbeatable experience that offers more value in the eyes of young consumers. For instance, you can offer a convenient hotel app and high-tech amenities (like Netflix subscriptions).
Subtle changes can be powerful, too. Whether you run a hotel, Airbnb, lodge, or something else, simply creating the right ambiance with music can increase comfort and boost guest satisfaction.
Ethical Businesses Stand Out
When millennial and Gen Z consumers choose hospitality businesses to support, they’re not just considering if their needs can be met. Many also consider if businesses align with their values.
As the spending power of younger generations grows, diversity is becoming a powerful factor in business success. Consumers connect with diverse hospitality teams who understand their experiences, so many millennials and Gen Zers support the growth of inclusive companies by patronizing brands with diverse management teams and fair treatment.
Sustainability is also a largely shared value within younger generations. In addition to creating less waste, you can attract millennials and Gen Z by accommodating vegan and vegetarian diets at restaurants. Plant-based menus are a big trend in the hospitality industry as young consumers become more aware of animal welfare issues.
Stay on Top of Modern Hospitality Trends
Millennials and Generation Z are greatly shaping the future of hotels and hospitality. As young consumers become more choosy about their spending, they’re heavily prioritizing the experiences that they see as valuable — especially those that offer insights into new cultures. Though luxury hotels are no longer seeing the levels of spending they received from baby boomers, they can bounce back by offering modern amenities and an unbeatable atmosphere.
In order to foster brand loyalty, hospitality businesses must also strive to be socially responsible companies that embrace the values of younger generations, too. Millennial and Gen Z consumers love a great deal, but they’ll only pursue it if it’s ethical to do so.
Once you start meeting the expectations of these rising generations of consumers, you can secure your company’s place in the future.