Values Over Trappings: Building loyalty in the hospitality space among Gen Y travelers

Hospitality is a sector historically shrouded in a veil of mystique. Made timeless by the silver screen and yet in constant flux with the trends of the day, hotels have always managed to evoke our imaginations and draw in our desires to belong. And so it pains me to call foul on such a wondrous facet of the tourism industry. With all its luster and seduction, the world of hospitality has failed to grasp at what millennials — the seemingly elusive yet categorically courted group of which I happen to be a part of — are all about.

First, allow me to explain why there is such a flurry in the travel industry’s efforts to attract loyalty among millennials. Loosely defined as those born between the 1980s and the early 2000s, Generation Y boasts a projected peak population of 81.1 million, a number almost six million higher than the baby boomer generation (according to the U.S. Census Bureau). With regards to spending power, the group accounts for $200 billion in actual spend and $500 billion in influence. And it doesn’t stop there. Just two years from now, the group’s spending power will rise from its current rate of 9% to 40%, and millennials will emerge as king spender.

The elusive demo: www.Panorama.net

With regards to travel, the evolution of millennials’ role in the industry fits these same patterns. Gen Y currently represents 32% of U.S. travelers, and will grow to constitute more than half of all travelers within 10 years. Collectively, they take more overnight trips, will spend more on travel services and are the driving force behind growth of the U.S. travel industry. In turn,here is plenty at stake as Generation Y peaks in 2017 — and the deluge of brand launches and rebranding efforts catering to millennials is a clear sign that the hospitality world has taken note.

Rise of the millennial traveler: Expedia.co.uk

In surveying the trends of perks, messaging and other developments meant to lasso in Gen Y loyalty, the composite portrait is one of a spoiled tech junkie never more than a few feet from a yoga mat, consuming an endless torrent of inspirational content and craft beer. I must admit: a mild case of generational insecurity rode up my spine as I typed these words. Yes, I am indeed using my Macbook at a co-working space while drinking crop-to-cup cold brew coffee. Yet I can also admit that while these facts delineate certain lifestyle choices (a few of which can be extrapolated as generational trends), these choices by no means define my principles or account for where I will spend my money. These traits are the trappings of our generations, not the values that define us.

In a classic case of herd mentality, the world’s leading hospitality brands have accepted this caricature of Gen Y as if by consensus, and the resulting products represent a tragic miss. A cursory read through press releases and interviews with executives of emerging brands yield indistinguishable rhetoric, leading to a near uniformity among the properties debuted. Some essential amenities, such as free WiFi and healthy food options, are surely appreciated by all. Yet similar layouts (open lobbies and communal space), design (contemporary and cheeky), and programming (TED-style talks, board games) will play the role of an ersatz to the properties that will be able to appeal to the generation’s zeitgeist. And the solution to this quandary is very simple, and fittingly, can be found in a 2009 TED talk by Simon Sinek: start with ‘why.’

Maslow’s Heirarchy of needs: www.researchhistory.org

Maslow’s hierarchy of needs, which puts self-actualization at the top of the pyramid, is by no means a tool created to explain millennials. In fact, the theory was established in 1943, long before the birth of the millennials . Yet Generation Y chooses to vocalize a fundamental need for purpose and meaning in how they choose to lead their lives with. No longer will they settle for any work that pays the bills and wait for retirement to live life to its fullest. Millennials demand travel, experience and authenticity. Moreover, in a world that is increasingly fragile due to the environmental footprint of humans and the economic footprint of consumerism, millennials have developed a keener interest in impact and sustainability. Fittingly, they demand the same proactive attitude from any business that seeks their patronage. Impactful organizations that know how to tell their story correctly are those that excel. Warby Parker, The Honest Company, Toms and Airbnb are all new firms that rose to great success by sharing the same core values as Generation Y. Puma, Whole Foods, the Virgin Group and Patagonia exemplify established corporations that have taken up the mantle for global amelioration and reap the resulting benefits of brand integrity and customer loyalty.

While free WiFi and on-demand wellness products are great, they are simply tools millennials use while on their purpose-fueled path. The generation that will soon be the heaviest spender in travel is one that holds its potential vendors under the scrutiny of a values-driven lens. Sure, with the right amenities and price, a hotel may earn tactical wins in the daily struggle for heads in bed. Yet from a strategic point of view, only the brand whose values align with those of Generation Y will be able to build a true base of loyalty to reach the top of old Maslow’s pyramid.

Just a few of us millennials, doing the whole ‘purpose thing’ last year in Nepal.

Gilad is a social entrepreneur in the travel space, having founded Travel+SocialGood, Only Six Degrees and Sustain the Stoke. He lives in New York City, and is always planning the next escape.

The tourism industry is projected to reach over 10 trillion dollars in annual GDP by 2020, employing more than 1 in 11 around the globe. What if every action you take as a traveler can amount to social good?

Travel+SocialGood is expanding to a global network, and we’re looking for leaders to build innovation hubs in your series. Join us! For more information email me at Gilad@Travelsocialgood.org