The hospitality industry is heading towards an interesting and never-seen-before-in-history confluence of generations, where Gen X meets Gen Y and Gen Z. Are we ready for the challenge?
Olivier Harnisch, CEO of Emaar Hospitality Group
Beyond the millennial mindset, let us talk about Gen Z too
I read an interesting report on the future of the workplace recently. We already know that the office of the future will not be the same as it is today, and we are prepared for the fact that many jobs of today will be redundant and irrelevant in the not-so-distant future, given the tremendous pace of technology evolution.
One of the crux areas of the study was how the next-generation office will be transformed to be more flexible, tech-savvy and artificial intelligence(AI)-driven. But what caught my attention was how this shift is not determined just by technology, but also by the aspiration of our new generation of professionals to seek more work-life balance. And that set me thinking. Shouldn’t we, in the hospitality sector, be looking further than the Millennials? Shouldn’t we discuss the Gen Z mindset that is heavily influenced by the Millennials, but has further evolved because of their extraordinary exposure to next-generation technology?
I believe that the future of our industry will be determined not only by how we tap in to the Millennials, who form our new key guest demographic, but also by how we address a never-seen-before-in-history confluence – of Gen X with Gen Y and Gen Z.
I term that ‘never-before-in-history’ because unlike the previous coming together of multiple generations, we are now witnessing substantial shifts in the outlook, perspective and opportunities that define Generations X, Y and Z.
The incremental growth in technology the world has witnessed in recent years has led to a remarkable transformation in the outlook of successive generations at very short lead times. What must have taken decades to bring about, the so-called ‘generation gap’ is now set in motion at shorter intervals.
That brings us to the big question: Are we ready for the challenge of addressing the confluence of three remarkable generations: the Baby Boomers, the Millennials and the Nexters. With Gen Z already entering the workforce and evolving as independent travellers in their own right, how can we factor in their considerations as ‘guests’, while not ignoring the sensitivities and aspirations of the other two?
Naturally, it calls for a ‘generational mind shift’ on the part of hotel developers and operators. Developers will have to think beyond the confines of traditional ‘hotels’ and look, possibly, at the concept of ‘co-living hospitality’, where Millennials and Gen Z are assured of ‘freedom places’ and ‘social hubs’ that foster interaction, creativity and collaboration.
This becomes relevant because mobility and connectivity will be central to both Millennials and Nexters as they seek travel experiences not merely as conventional vacations but as ‘workations’ that reflect their spirit of collaboration. This will be more relevant in the future as global crowdsourcing of work will become the norm, breaking all conventional boundaries.
Further, the Millennial and Nexter generations are increasingly value-conscious, more so because they have grown up through the era of a bitter global financial crisis that they saw impacting their parents and lives around them. They are also genuine adventurers, people who seek cultural connectivity and are eager to unlock new experiences.
Our industry, naturally, cannot operate with hard-fisted approaches if we are to engage them. While hotel developers must look beyond conventional investment models, hotel operators must focus on innovating new experiences that are curated for Gen Y and Z without ignoring Gen X. It is a tough act to roll out but – let us be honest – we do not have a choice.
However, we have technology on our side; we stand at the doorstep of big opportunities driven by big data analytics and AI. Integrating digital into every touch-point of our operation, we can positively engage the new generations.
But technology is only the starter; the main course is the genuine experience that we can offer them. And that can come only from the heart – from knowledgeable concierges, from friendly staff and from our commitment to a culture of service excellence.
According to reports, in the next three years, 50 per cent of the global workforce will be Millennials and by 2025, at least 25 per cent of our professionals will be Nexters. Their requirements of travel and hospitality are different, as is the way they approach everything from bookings to room-stay and the use of amenities.
For us to tap the Millennial and Nexter market, we must therefore move now and move fast. We must embrace technology with vigor, bunk conventional thinking and look at hospitality not with the tinted eyes of our experience, but from the fresh, wide-eyed, worldview of two generations that have grown up on games and are not mystified by technology leaps.
Michael Bisordi, owner, Tungsten Partners; partner, Ace Group International
Standing out in the new digital landscape
The original resonance of Ace Hotel related to its differentiated product. This aligned the brand, seen as original, authentic and multi-faceted, with trends that apply to the tastes and dispositions of a new cluster of consumers and followers. Tungsten’s experience in co-producing what we feel were relatively impactful Ace Hotels internationally and the aspects of them that were most transmitted globally during the more definitive and disruptive moments of the brand, relates to the challenge of capturing a burgeoning Millennial psyche.
A hotel’s connectivity to a new wave of consumers has recently transcended the simple experience of the customer residing in the rooms overnight to involve new factors within the hotel. The new paradigm of transmissible digital content relates to aspects of the property that were previously not points of focus for the developer, or brand/operator. For years, the lodging industry has focused on a standardized form of luxury and comfort. The established idea of a hotel is often one whereby the property is a respite for recreational or working travelers. These hotels may be seen to have less dimensions; there is simply one axis upon which less amenities exist for a business scale product and more luxurious apportions are implemented for higher scale product. However, in the new arena of global hospitality, a hotel becomes multidimensional, still incorporating the old axis of consumer need, but layering onto it new directional of content and programming. Increasingly, a new range of considerations must be brought to the forefront, yet still complementing more traditional offerings, in order to create the impact needed for Millennials.
When aspects of the hotel that are often overlooked are produced with more consideration, they become valuable content. A broad array of consumer touch points, such as music, uniforms, interior design, art, the personality of the staff, partnerships in programming, community environment, retail leases, hotel merchandise and collateral, as well as gastronomic partnerships, become strong statements. As such, not only is the customer experience elevated through this level of composition, but the hotel reaches a broader audience also, by providing aspects of itself that are propagated beyond its walls. Further, the message is spread both digitally and by those influencers it will attract and who become emissaries of the hotel. It is this type of product that Tungsten worked hard for roughly a decade to put forth in hospitality.
The concept of what a hotel can be has evolved because consumer disposition has evolved. The creation of a strong identity and narrative for the property is paramount. The developer must aspire for the property to have a distinct voice and to be identifiable in the new digital landscape. Authenticity, sincerity, cross-pollination and depth of content are the foundations of a broad reaching message that allows the hotel to market itself to the Millennial mindset.
María Zarraluqui, vice-president, global development, Meliá Hotels
Tapping into the ‘bleisure’ revolution
Millennials are a new customer segment bursting onto the travel market with a disruptive vision of the world and new ways of communicating with each other. Their worldview is influenced by digitalisation and the rapid change that has taken place over recent decades, and we can safely say that Millennials have been a key driver for the so-called ‘bleisure’ (business and leisure) revolution.
Within this context, Meliá Hotels International was well aware of the need to create much more specific customer profiles and personalized experiences, tailored to their preferences. Once again, the pioneering decision by Meliá to diversify its products under a broad portfolio of hotel brands aimed at different customer segments, has proven highly successful and demonstrated the importance of being able to adapt to the constantly changing demands and desires of our increasingly discerning customers.
Our Innside by Meliá brand was developed almost from scratch, to fit the millennial aspirations, and it has become one of the most successful and fastest-growing hotel brands worldwide, with over 40 hotels already operating or in the expansion pipeline in countries like the UK, USA, Germany, Chile, Venezuela, UAE, China, Indonesia, Italy, Colombia and Brazil. Under the promise of proposing to ‘work and trip with delightful differences and meaningful extras’, the Innside by Meliá hotels stand out because of its social openness, its in-the-know guest experience, the unexpected extras and the personalized experiences to inspire and indulge the ‘work tripper’.
Taylor-made for Millennials, the Innside experience includes everything the smart professional traveler could expect: open living lounges, home to restaurants and bars with mixologists and DJs, where to bring clients and meet the vibrant locals, super room experiences, endless online freedom and free refreshments, as well as creative spaces for meetings and fitness facilities with the best digital fitness software.
But the Millennial travelers are not just changing the game when it comes to city hotels: resorts have also taken the challenge, and in 2014, Sol by Meliá, our resort brand par excellence, was totally renovated to create four new concepts to respond to different customer segments: Sol Hotels, for the conventional ‘sun and beach’ tourism with a focus on families; Sol Katmandu, a unique blend of accommodation and amusement park in a ‘play & stay’ experience; Sol Beach House, an only adults choice with a hippie-chic atmosphere, combined with a modern flair, reinventing the concept of ‘your home on the beach’; and finally, Sol House, a youthful and energetic proposal that revolutionizes the classic hotel stay to better suit the Millennials, that includes services like the Tweet Experience Hotels, specifically focused on Millennials, that allow guests do all sorts of things in the hotel through Twitter: book a Bali bed by the pool, request restocking of the minibar, communicate with other hotel guests… a genuine revolution in the atomised travel market.
Olivier Harnisch, Maria Zarraluqui, and Michael Bisordi are speakers at the upcoming Arabian Hotel Investment Conference 2018, being held from April 17 to 19, 2018, at the AHIC Village, Waldorf Astoria, Ras Al Khaimah, on the topic ‘Tapping into the Millennial Mindset, Why Investors Need to Broaden their Thinking’.