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Millennial travelers: How to attract economic rising stars

Travel rewards have historically led the charge in terms of motivating consumer loyalty. With millennials’ interest in experiencing new places and cultures, this trend will likely continue. A recent study from Boston Consulting Group reports that millennials currently make up about a third of U.S. business travelers. This figure will increase to 50 percent by 2020 and leisure travel will expand as well. The BCG study goes on to explain, “Although members of the millennial generation are not yet the core customers of airlines, hotels, and travel companies, they will be in five to ten years, when they enter their peak earning, spending, and traveling years.”

A year ago, there was a flurry of press about the Millennial generation. Words like “entitled” and “narcissistic” were used to describe the roughly 80 million people born from 1977 to 1995. Unsurprisingly, the articles spurred lively debate. Negative rants aside, some insightful observations of the generation emerged from the conversation. At the heart of it all is the notion that millennials are not inherently more self-centered than any other generation; they simply have adapted to a world of abundance.

In his TedX talk, Scott Hess, a senior vice president of human intelligence with SparkSMG, framed it this way: “Can you imagine if the boomers had YouTube, how narcissistic they would’ve seemed? Can you imagine how many Instagrams of people playing in the mud during Woodstock we would have seen?”

We can all be thankful that smartphones didn’t exist in the 60s, but in taking the broader view, millennials’ reactions to their world are understandable. Like generations before, they are, at least in part, a product of their environment.

Given the relative wealth and plenty that has characterized the millennials’ world and their expanding purchasing power (estimated to hit $2.45 trillion worldwide by 2015), what do they care about? What are the best ways to engage them and secure their loyalty?

Conscious consumerism

Empowered with information, millennials are deliberate and astute—they know what they want, when they want it and how to get it.

In looking at users of our clients’ travel sites, we analyzed areas with high traffic by millennials. Our data shows that the length of a millenial’s travel site visit mirrors the overall trend. However, they tend to visit more frequently. And, when looking at which pages are being viewed, millennials spend significantly more time searching and browsing flight information than the average visitor. They are used to weighing their options before committing to a purchase. Despite all the research, they are accustomed to making last-minute changes. Again, this is the reality of their digital-native world. A recent study by a hospitality intelligence company, HVS, shows that millennials spend 13 percent more per business trip than non-millennials due to upgrading, last-minute bookings, refundable tickets and itinerary changes. In the last decade, the travel industry has increased pricing transparency in response to increased regulation. This has helped set millennials’ expectations because although they may be willing to pay the extra fees, they’re accustomed to full disclosure. Millennials expect to see the breakdown of fees and service charges for plane tickets and other travel services.

Connected community

In addition, millennials favor connectedness through the sharing economy. According to U.S. News & World Report, “The sharing economy hits the nail on the head since you can’t get more authentic travel than interacting with a local by staying with them, touring with them or driving in their car with them.” As millennials’ economic gravity strengthens, businesses built on sharing and relationships will multiply and prosper. Airbnb, for instance, is a marketplace for booking unique accommodations around the world. While the site offers more than 600 castles available for lodging, many of the properties are simple guest rooms in people’s private homes. The site boasts serving more than 15 million guests. And renting out an extra guest room to globetrotters is just the beginning of the experience. In a recent Airbnb blog post, writer Paul Lee Cannon described music tours that trade big arenas for the shared intimacy of someone’s home. He wrote, “Sultry world folk” is Sarah’s music style. Last year, her UK-based band Pandorasdiary embarked on a “tour of European living rooms.” It was a whirlwind—five countries, six gigs, seven days. “Mad, fast, unbelievable,” said Sarah of the stops along the way: a former brothel, an artist’s flat, a living room-turned-art gallery in Basel. She met a blues singer in Amsterdam and a folk singer in France. One hundred attendees, including friends and family, showed up to support Sarah and her band at the final stop of the tour: a home appliance repair workshop in Munich.

If Airbnb connects people and lodging, Uber offers the same service with transportation. The company’s overview description reads like a millennial values statement—connected, shared, accessible: “By seamlessly connecting riders to drivers through our apps, we make cities more accessible, opening up more possibilities for riders and more business for drivers. From our founding in 2009 to our launches in over 70 cities today, Uber's rapidly expanding global presence continues to bring people and their cities closer.”

Even when traveling in more traditional fashion, millennials express their own style of connectedness and sharing. If you want to strike up a conversation with another guest in the hotel lobby, from all interested parties, you’re twice as likely to find a millennial up for a chat. According to a recent infographic by Chase, 57 percent of millennials want to meet other people staying in their hotel. Only 26 percent of boomers said the same. And, a staggering 97 percent of millennial travelers post on social networks and share experiences with friends while traveling. They are also much more likely to seek opinions via social media while researching a prospective vacation. Integration with social media sites and reviews from sites like TripAdvisor become important considerations in providing a millennial-friendly travel rewards site.

Our data shows that millennials are more likely than other age groups to visit our clients’ travel rewards sites from a mobile device. And while mobile is essential, it must be part of a larger strategy. Millennials expect an omni-channel experience. They believe that your brand should know where they are and that interactions on all of their devices and communication channels should be seamless. So if a traveler adds a zip lining adventure to his rewards site cart using his mobile phone, he expects no issues accessing it later on his computer when he’s ready to complete the purchase. And day of travel information—from flight status to weather reports to restaurant and activity recommendations—are standard fare for these consumers.

Back on the Airbnb blog, Paul Lee Cannon observed this about the home venue performances: “Like a song’s hook that gets into your head and won’t leave, home-hosted concerts have an intimacy and strong community component that can’t be beat.” Millennials are driven by their sense of community—from local to global— and they aren’t leaving anytime soon. In fact, as the generation approaches its years of economic dominance, the perceptions its members form of brands today will drive brand loyalty tomorrow. Is your brand positioned to engage these economic rising stars on their terms of sharing and connectedness?

This article first appeared on loyalty360.org

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Tags: reward redemption, travel, blog

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