REPORT FROM THE U.S.—Millennials are no longer a future prospect for hoteliers. The generation, which is generally agreed upon to encompass those who range in age from 18 to 34 years old, comprises approximately 25% of the United States’ population, according to the U.S. Census Bureau.
The sheer size of the millennial generation is reason enough for hoteliers to pay attention. But the big reason they should be focusing on them is because of their spending power, said Marcello Gasdia, senior analyst of consumer research at PhoCusWright, during a recent webinar titled “The U.S. millennial traveler: Leading a travel revolution,” hosted by Netelixir.
Sixty-six percent of millennials consider travel an important part of their lifestyle, according to the most recent PhoCusWright Consumer Travel Report. Following are eight data points on habits and characteristics of millennial travelers that could help hoteliers capture their fair market share:
1. They travel a lot
During 2013, 71% of millennials took at least one getaway of three nights or less. Millennials also are twice as likely to take long trips, which typically constitute 14 nights or longer, Gasdia said.
“They have a very high incidence of international travel,” he added. Of millennials, 42% traveled internationally in 2013, compared with 28% of older travelers.
Half of millennials took a purely discretionary trip in 2013. For older travelers, this percentage is closer to 60% and 70%, he added.
2. … but don’t always stay at hotels
Millennials on average booked hotels one and one half times during 2013. Older travelers on average booked two hotels.
“This is a very significant difference for the population,” Gasdia said. “Millennials are not sleeping on the streets, so six out of 10 stayed with friends and family for at least one trip in 2013.”
The proportion of older travelers who stay with family and friends is much lower, he added.
3. They take more leisure trips but spend less
Millennial travelers on average took 3.19 leisure trips annually. Older travelers took approximately 2.84 leisure trips, according to PhoCusWright. Breaking it down even further, 73% of millennials ranging in age from 25 to 34 took at least one leisure trip during 2013.
“That’s the most of any age group,” Gasdia said.
Even though millennials take more leisure trips, on an annual basis, they don’t spend as much money as their other generational cohorts, Gasdia said. Millennials on average spend $3,217 on leisure travel annually. Older travelers spent roughly $3,381.
4. They search, shop and buy travel on mobile
Ninety percent of millennials own a smartphone, according to PhoCusWright. As a comparison, only 57% of older travelers own a smartphone. Sixty-six percent of millennials use mobile search to shop and buy travel on mobile, excluding OTAs, Gasdia said.
“More than one-third of millennials are using their smartphones during the trip-planning lifecycle,” he said. Additionally, they used their smartphone at least once for booking a hotel throughout 2013, Gasdia added.
According to PhoCusWright’s Traveler Technology Survey 2013, 36% of millennials used their smartphones for destination selection, 37% for travel shopping and 23% for booking. For non-millennials, those percentages drop significantly to 6%, 11% and 5%, respectively.
With younger millennials, ranging in age from 18 to 24 years old, the surge in mobile becomes even stronger, Gasdia said.
5. Their loyalty is up for grabs
Loyalty is what differentiates the ages, Gasdia said.
But hoteliers have a unique opportunity to capture loyalty as the younger millennials (18-24) become older millennials (25-34), Gasdia said.
For example, 22% of 18 to 24 year olds belong to a hotel loyalty program. When looking at the older millennials, that percentage jumps to 41%. Between these two age groups (see chart below) is where hoteliers can gain the most footing, he said.
“Somewhere around 21% of travelers (ages 25 to 34) belong to at least one OTA loyalty program,” Gasdia added. “OTA loyalty is peaking out with this generation.”
6. They are extremely influential
“Millennials have been the trend setters,” Gasdia said. “They are the ambassadors of technology.”
This has been particularly useful when it comes to showing older siblings, parents and grandparents how to use technology, which is important with how much functionality is changing, Gasdia said.
For example, millennials might tell their parents and grandparents about platforms such as Airbnb and Uber, Gasdia added.
7. They are last minute bookers
Twenty-three percent of millennial travelers booked their last trip less than one week before departure, according to PhoCusWright.
Only 12% of older travelers did the same, Gasdia said.
8. They are still finding their travel legs
“Millennials are still finding their legs when it comes to travel,” Gasdia said. “This is actually an amazing position for travel companies to be in.” …
“Now is the time to build relationships as they begin to engaged with travel brands and form perceptions about them and develop travel habits and preferences.”