With a median age of just 22 years, the Middle East is one of the world’s most youthful regions. Millennials, or Generation Y, account for one quarter of the region’s population and are expected to make up 75 percent of the workforce by 2025. Ralph Nader, CEO of Amber Consulting, shines a spotlight on this demographic of digitally savvy young adults born between 1980 and 2000, who hold such huge potential if targeted correctly
When it comes to the hospitality industry, millennials have become one of the most important target markets.
Catching the big fish
A glance at the international scene reveals that the big names have led the way in acknowledging the importance of millennial guests, customizing their products and brand to solely fit the needs of this segment.
When arriving at the Moxy Hotel, Marriott’s millennial-oriented hotel brand, designed with social media lovers in mind, guests are given a free drink at check-in at a bar replacing the front desk. “It’s a playful hotel and you walk into a really interesting public space,” said the project’s lead architect, John Calhoun. “We’re glad it’s part of the whole downtown honky-tonk row experience.”
Launched in 2016, Canopy by Hilton is a far cry from the usual formal luxuriousness of the Hilton. Guests can check in with their mobile device and head straight to their rooms. In addition, they get to start each day with an artisanal breakfast made with fresh produce from the vicinity and then participate in neighborhood art and music programs with local talent. Evenings, meanwhile, provide opportunities to sample local wines, beers and spirits free of charge.
In order to enhance the travel experience for millennials, the Aloft Hotel has focused primarily on high-tech concepts and design in its strategy. Innovations include being able to use a phone to unlock the room (Starwood Preferred Guests [SPG] Keyless) and smartly-dressed robots that double as bellhops. When hungry, customers can order customizable meals through digital kiosks with just a few clicks.
In a separate development. Accor Hotels has announced the launch of Jo&Joe, a new hotel brand that combines the private rental, hostel and hotel formats. Each hotel will be an ‘open house’ concept, designed to foster interaction and positive community living, with common areas and events, such as concerts, yoga classes and workshops, which are also aimed at attracting the local community. In addition, the restaurant concepts will have a focus on local cuisine, from grill food to open-flame barbecues, woks and wood-fired pizzas, as well as a collaborative kitchen, where guests can cook for themselves and showcase their culinary talents to other hotel visitors.
What about the F&B?
It’s important to remember that the millennial generation is seeking experiences that are richer, but still affordable, with menus that are more experimental, more ethnic and more sustainable, offering seasonal, local and organic produce. This represents a marked change from the super-sized, all-you-can-eat sales strategies of the 1990s. This trend also reaffirms the core driver for this market of quality of experience versus price. Producing a hotel F&B experience that finds the right balance between these two factors is key to attracting these visitors, with their insatiable appetite and curiosity.
Instant access to menus, restaurant imagery and reviews via mobile devices are also important to enhance the millennial customer’s experience. According to YAYA Connection, 65 percent of social media conversations are about where to eat out. In addition, a strong online presence with sharing content or ‘Instagrammable’ pictures is a must for attracting millennials.
Whilst still in its infancy, the use of mobile devices to pre-order meals in hotels or place room service orders represents a growing opportunity to align products with millennial expectations.
11 transformation trends
1. Mingle and socialize. Room sizes are being slimmed down and greater emphasis is being put on creating large communal spaces, with integrated F&B support. Open concept lobbies, equipped with contemporary furnishings, from social media video walls and board games to crafted cocktails and grab-and-go bites, are leading the way.
2. Technologies ‘à gogo’. From high-speed free Wi-Fi to serving robots, new technology is an essential requirement to satisfy the demands of millennials. In-room technology is also playing a role by making stays more personalized and convenient. At Hotel EMC2, for example, two robots, Leo and Cleo, deliver bottles of water, toothbrushes and extra linens to rooms, upon request.
3. Local favorites. While millennials are often looking for adventures, they also value local experiences. At the Hyatt Centric, staffers are encouraged to share information about their favorite local spots with guests.
4. Social media addicts. A strong online and social media presence is crucial for a hotel to attract this generation, with 73 percent of millennials checking a company’s social media feed before booking, according to study carried out by Viga. The research also found that 33 percent would cancel their booking if a hotel had no social media presence.
5. Room service and menu revamp: Many hotels targeting millennials have moved away from the old-fashioned room service trays with silver domes by adapting the grab-and-go concept or even having food delivered in environmentally friendly packaging and a paper bag that customers can take out with them.
6. Social consciousness. This generation is highly eco-conscious and hotels will need to embrace that ethos to attract them. When choosing a hotel, millennials will look into aspects of the hotel’s sustainability, from eco-building certifications to sustainability programs for energy, water and other utilities, alongside its waste management techniques.
7. The MENA scene. In a region of big demand but short on supply, Middle Eastern millennials are displaying traits that are both interesting and unique.
8. On the rise. This generation accounts for around one quarter of the region’s population, or 108 million people. Millennials are expected to make up 75 percent of the workforce by 2025.
9. Highest spenders globally. According to Visa, when it comes to travel-related spending, millennials in the Middle East part with more of their cash than the rest of their generation living elsewhere. Visa’s findings show that Middle Eastern millennials spend twice as much on travel as their European counterparts.
10. Highest number of millennial entrepreneurs. A report by HSBC found that 63 percent of business owners in the Middle East were aged 35 or below, which makes the region home to the highest proportion of millennial entrepreneurs in the world.
11. Highest brand loyalty. Millennials in Saudi Arabia and the UAE display significantly more brand loyalty than their peers in Australia, the UK, Japan and the US. In the UAE, 43 percent of millennials consider only one brand when purchasing flights, while just nine percent adopt this approach in Australia.
Despite the potential this generation offers regionally, the number of hotels targeting them remains low.
Commenting to the Washington Post, Scott Greenberg president and chief executive of hospitality management company SMASHotels, hit the nail on the head when he said: “If we attract young people, old people will show up. But if you build a hotel for old people, young people never show up.”
So Middle Eastern hoteliers what are you waiting for?
CEO of Amber Consulting