The Millennials Check In

The hotel industry, struggling to recover from the depths of the recession, has begun to contemplate a group of travelers it sees as crucial to its economic growth -- those in their 20s to mid-30s who are obsessed with technology, social media and design.

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.

"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.

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.

Hotels that ignore these younger travelers, said Mark Woodworth, president of Colliers PKF Hospitality Research, will be at "a very severe competitive disadvantage."

About a decade ago, the hotel industry was concentrating much of its effort on luring people who are now mostly in their 50s and 60s. The changes involved higher-quality beds, brighter lighting and bigger work spaces. And those travelers were loyal to brands that offered reliable, comfortable services.

Today, the Millennials, or Generation Y, seem to be seeking the opposite: the innovative and the off-the-wall attract their attention and their wallets.

"Interesting is more important than comfort," said Bjorn Hanson, divisional dean of the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University. "It's the reverse for baby boomers."

Mr. Hanson said wall-to-wall -- and free -- Wi-Fi service was not only demanded but expected. "High-speed Internet is almost like air to Millennials," he added, with most considering it as essential as beds and towels.

Hotel owners are also installing power consoles in rooms and public areas so that charging all those cellphones and laptops is easy and accessible.

"Gen Y'ers don't want to have to unplug lamps or crawl under the bed to get their laptops and P.D.A.'s plugged in," Ms. Klauda said.

The Plaza Hotel in New York has gone one step further, placing iPads in every hotel room. Guests can use the device to control the lighting, adjust the air-conditioning, order room service and read the morning paper.

Marketing and communicating through social networks are also important among hoteliers. When young travelers have a problem at a hotel, they are less inclined to complain to the hotel manager, as their predecessors generally do; they go online and post on Twitter about it. In early 2010, Starwood Hotels and Resorts Worldwide responded by setting up a team of about 20 people whose sole job is to monitor and respond to online complaints and comments.

Probably the biggest physical change has been to the hotels' lobbies. Executives are retrofitting lobbies with comfortable sofas and Art Deco furnishings.

"If Millennials are wearing shorts, a T-shirt, a baseball cap and athletic shoes, a lobby that has mahogany paneling, English hunting scenes and Oriental rugs doesn't connect as well," Mr. Hanson said.

Young travelers also tend to spend far more time socializing and working in the lobby than they spend in their hotel rooms. "We coined the phrase 'isolated togetherness,' because if you watch them in the lobby, a lot of them are texting -- but they're texting each other in the lobby," Ms. Klauda said.

Older travelers, on the other hand, often prefer solitude at the end of the day. They "like the face-to-face interaction during the day, but at the end of the day, we're done -- bring us our room service and leave us alone," said David Loeb, a senior research analyst at Robert W. Baird & Company, a wealth management firm.

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, said Raj Chandnani, vice president for strategy at WATG, an architectural design firm for the lodging industry.

The hotelier Ian Schrager, a founder of the Studio 54 nightclub, was a pioneer in creating designer hotels with hip nightclubs, like the Paramount, Royalton and Hudson hotels in Manhattan in the 1980s and '90s.

Starwood followed with its W hotels in the late 1990s and the debut of its Aloft brand in 2005. Other major brands have since jumped in, among them the InterContinental Hotels Group's Indigo brand, Hyatt Hotels Corporation's Andaz and Hyatt Place brands, and Marriott International's concept to turn its lobbies into so-called great rooms.

Gerard Greene, a former hotel analyst, said he felt so strongly about the need for designer hotels at affordable prices that he quit his job, sold his home in London and used cash from the sale to finance his dream.

Now, 10 years later, his brand, Yotel, has four hotels, including one in Midtown Manhattan that some guests have described as futuristic. That hotel has an airportlike check-in kiosk (there is no registration desk); social public spaces; Wi-Fi access, power consoles and entertainment systems that devices can plug into; giant Monsoon shower heads; and compact 200-square-foot rooms, which were inspired by airline cabins, that have floor-to-ceiling windows.

Yotel's other hotels are at the Gatwick and Heathrow airports in London and at Schiphol Airport in Amsterdam, and it is planning on new ones in Miami, San Francisco, Paris, Hong Kong and New York, at Kennedy Airport.

But could all of this be a passing fad that will fade as the travelers get older?

Mr. Greene said he was not concerned, comparing it with the Apple phenomenon.

"Younger people were the first to adopt the iPods, iPads and so forth, and now my mom has an iPhone, as do many older people," he said. "But the people who got it first were the younger people."

Similarly, he said he believed that older travelers would follow the young in hotel trends.

"My sense is most people think there's been a change," said John Fox, a senior vice president at PKF Consulting, "and it's a permanent change."

(Source: The New York Times, 03/12/12)

Today's Youth a Tough Sell for Automakers

Automakers have a problem. The kids of America do not want cars.

At least not as much as they used to.

According to research conducted by General Motors Co., 30 percent of them got their driver's license when they turned 16.

For their parents, a car represented freedom -- the ability to escape from parents and go where they wanted without anyone looking over their shoulder.

Today, young people find that freedom online. GM says more than half of those surveyed said they would actually rather meet up with their friends in cyberspace than face to face.

"There's simply new and better and, frankly, more efficient alternatives to communication and getting that freedom that they used to rely on the auto industry to provide," said John McFarland, senior manager for global marketing at Chevrolet, one of GM's divisions.

Just ask Christopher Elkins, a 22-year-old engineering student at the University of Michigan in Ann Arbor. He has a 2002 Ford Focus. But now that he has a place of his own, going out is less important than it used to be.

Last year, Elkins drove his car to school every day. But he decided it was too much of a hassle. So, this year, he takes the bus. Elkins said he uses his car only about once a week to get groceries.

"I would prefer to bike or walk, especially in Ann Arbor," he said.

But automakers cannot write off a whole generation. According to GM, there are 80 million millennials -- a group it defines as 18- to 24-year-olds -- in the United States. And they already wield a trillion dollars in spending power. Unfortunately for Detroit, they are spending little of that money on cars.

Ever since Toyota Motor Corp. launched its youth-oriented Scion brand in 2002, automakers have been trying to convince kids that cars in general -- and their cars in particular -- are cool. Scion has had some success. The median age of a Scion buyer is 29, the lowest in the industry, according to Toyota. "We don't really think that any brands today are doing it right," McFarland said. "We don't think anyone quite 'gets' this group."

And that includes Chevy.

Talking about life
But McFarland and his team are trying to change that. They started by changing the way they did market research. Instead of getting a group of kids together in a room and asking them to describe their ideal car, GM's designers sat down with them and talked about life -- what they wanted out of it and how they live theirs. GM found that what they really value is their friends and doing things with them. When they did start talking about cars, the designers discovered that, instead of the sporty compacts and cute hatchbacks they thought kids wanted, what they really desire is "a car to do things with."

In other words, they want basic transportation, not performance.

They also found out that these younger consumers are more realistic than they imagined. Sure, their dream car is still a Lamborghini, but what they really want is a car that can take their friends places. They want it to look cool, but they really do not care how fast it is.

So GM began work on a series of Chevy concepts that it hopes will finally strike the right chord with the youth of America -- or at least a significant number of them.

Chevy recently unveiled two of them at the North American International Auto Show, and more are in the works. One is a mini-muscle car; the other looks like a baby exotic. Both are powered by modest motors that promise more fuel economy than speed.

They are "more poseur than doer," said Clay Dean, director of advanced design at GM, who said the company this year will show them and other concepts to young people at auto shows all over the country.

Other automakers also are trying a new approach to attracting younger car buyers. Chrysler Group LLC put some of its youngest designers in charge of the Dodge Dart program in an effort to channel the zeitgeist of Generation Y, according to Ralph Gilles, head of design at the Auburn Hills, Mich. automaker.

"I want you drawing the car you would drive," Gilles told them.

Chrysler CEO Sergio Marchionne said they got it right, adding that the Dart will be "key" to bringing millennials into Dodge showrooms.

"I think the car has all the requisites to get it done," he said, adding that technology is a big attraction for younger car buyers, which is why there is so much of it in the Dart. "There's no car that's this evolved."

'Smartphone on wheels'
Dodge's focus on technology makes sense, at least according to the results of a recent survey by Deloitte and Michigan State University's Broad College of Business. They talked to 1,500 consumers of all ages in the United States, as well as 250 Gen Y consumers in China and 300 Gen Y consumers in Western Europe, and found most 19- to 31-year-olds want "a smartphone on wheels."

Tasnim Rahman, 19, said that while fuel economy and looks are important to her, what the University of Michigan student really wants in a car is "a lot of modern technology because we need it today. We are very tech savvy, so we need a car that's tech savvy, too."

Nearly 60 percent of the young people surveyed by Deloitte said in-dash technology is the most important part of a vehicle's interior, while 73 percent said they wanted touch-screen interfaces. Most also want to be able to use smartphone applications.

Fortunately for Dodge, the new Dart offers all of that. So do many of Ford Motor Co.'s new small cars.

Moray Callum, Ford's director of design for the Americas, says his research has revealed the same thing as GM's.

"Having a car is not the same priority anymore for young people," he said. "Adults are worried about texting being a disturbance while driving. A lot of kids think that driving is a disturbance to texting."

Ford, too, has concluded that image is more important than performance to younger customers.

"They're all about the arrival," Callum said, adding that this is why Ford has focused so much on styling in cars like the Fiesta. "They still think the car says something about them."

(Source: The Detroit News, 01/16/12)

Take Advantage Of Gen Y's Willingness To Talk

Most brands aren't taking advantage of the opportunities presented them to engage Gen Y consumers. 

Gen Y is on Facebook, Twitter, Tumblr and the majority of social networks, and they expect to have a conversation with your brand on these channels.

Most of the time, brands see this interaction in a negative sense because consumers bring complaints to a Facebook wall or Twitter feed. Gen Y consumers are incited to engage with brands based on a negative experience, not a positive one so brands become reactive and can't engage in a positive fashion.

According to a recent MTV Networks study, 70% of Gen Y consumers said they'd figure out how to make things fair if they feel a company is being unfair with them. The network found that the group as a whole demands fairness, transparency and clear, consistent rules from brands. This often means brands get bombarded with negative Facebook posts or tweets when it increases shipping charges or makes a decision a majority of its consumers doesn't like.

The solution is simple: Brands need to be more proactive in engaging Gen Y consumers. It doesn't have to be formal research done with an agency or even scientifically formulated -- just engage like a regular person. It's the first step in trying to bring Gen Y consumers into your circle.

If you're thinking of changing shipping charges on your website or altering your return policy, talk to consumers first. Giving Gen Y costumers a chance to provide feedback on a possible change and then seeing their suggestions come to life -- or at least the chance for their feedback to be seriously considered -- is the best way to start creating grassroots ambassadors in this consumer group.

This type of consumer research doesn't have to just be for research; it can be used for marketing. Engaging Gen Y consumers in a positive fashion should be central to any brand's social media strategy. It could be as simple as a Facebook question on an airline's brand page, asking consumers what type of entertainment they'd like to see on the plane.

Rather than waiting for a disgruntled passenger who was angry about missing expected reruns of “30 Rock,” the airline can give consumers a chance to help shape that programming. If a problem does come up, you have a group of consumers who can back you up because they participated in the conversation your brand started on in-flight entertainment.

Use the tools in front of you to start a positive conversation with consumers and take advantage of Gen Y's willingness to talk. 

Patrick Evans - STA Travel

Millennials High on Digital and Friends

According to the "American Millennials" study from Barkley, with Service Management Group and The Boston Consulting Group, Millennials, compared to other generations, reported greater awareness of newer, youth-oriented cause marketing campaigns and greater exposure to campaigns through social media, while Non-Millennials rely on newspaper and direct mail.

Jeff Fromm, senior vice president, Barkley, says "... since the Millennials generation is larger than the Baby Boomers... and three times bigger than Generation X... understanding of Millennials' needs, tastes and behaviors will clearly shape... future business decisions... "

Highlights from the Study:

• Millennials watch significantly less TV than Non-Millennials, says the report, watching 20-plus hours/week (26% versus 49%). When not watching live TV, Millennials are much more likely to watch shows mainly on their laptops (42% versus 18%), with DVR (40% versus 36%), or On-Demand (26% versus 18%)
• 70% of Millennials reported feeling more excited when their friends agreed with them about where to shop, eat and play. Only 48% of older adults were as heavily influenced by their friends and colleagues. Additionally, more Millennials than Non-Millennials reported using a mobile device while shopping to research products (50% versus 21%)
• The majority of all respondents shop alone (60% Millennials, 69% Non- Millennials). However, Millennials report more shopping than Non-Millennials with family unit, spouse and children (13% versus 6%) and with adult friends (4% versus 2%)
• 70% of Millennials want to visit every continent in their lifetime. Fewer than half of older adults report that goal
• Millennials accounted for 18% of their monthly restaurant spend in the fast-casual format, compared to only 13% for Non-Millennials. Additionally, Millennials crave snacking opportunities, and are more than twice as likely as older people to seek them out mid-morning, mid-afternoon and late at night
• Millennials demand more knowledgeable and fashionable sales associates (29% versus 19%) while Non-Millennials value sales associates who know to apply discounts and offer promotions (65% versus 51%)

And, additional study information reported by EMarketer, shows that a third of Millennials like brands more if they use social media, nearly double the percentage of older adults who said the same. In addition, over 30% of Millennials thought it was annoying for brands to be on sites like Facebook and Twitter, making this group less tolerant of social media marketing.

23.5% of Millennials interacted with content from a brand's Facebook page at least once a daily, vs. 17% of older adults who did the same. Millennials were also 4.4 percentage points more likely to interact with brand content between one and six times per week. Overall older adults were nearly twice as likely never to engage with brand content on Facebook.

(Source: The Center For Media Research, 09/7/11)