The growing influence of millennials makes personalisation a priority

In the next 10 years millennials will start to reach their peak social, political, and cultural influence. Is your business ready?

Opinion, Comment & analysis, Millennials, Technology trends

Over the last five years, it seemed you could barely find a hotelier who wasn’t talking about millennials. The enthusiasm for this marketing epithet has died down somewhat, but as I wrap up Hotelier's inaugural Technology Supplement, two points spring to mind. Firstly, most hotels wouldn’t know a millennial if they rocked up at the front desk and checked in.

And secondly; most hotel operators are out of sync with the service expectations of millennials, and (more worryingly, I suspect) have failed to think through the implications for their business when millennials comprise the biggest spending sector of the market.

Millennials surpassed baby boomers as the largest living generation in the US nearly four years ago. This change went by largely unnoticed, but more significant milestones are approaching. By 2020, millennials will make up 40% of the eligible voting population, and by 2025, 75% of the workforce will be millennial. At this point, it will not be possible to ignore the influence of millennials.

Over the next decade, older and middle millennials will reach peak economic, social, cultural, and political influence and “its incumbent upon any organisation to build long term relationships”, if they are to thrive, warns Jeremy Balkin, author of the Millennialization of Everything: how to win when millennials rule the world, in an interview with our ITP sister title, GITEX Preview.

If all this takes you by surprise, you’re probably not the only one. But doing something about the situation isn’t going to be easy. Satisfying millennial customers requires more than ‘quirky’ interior design, ‘Instagramable moments’, and boundless internet bandwidth.

Millennials, raised in the internet age, expect much more in terms of service. Their understanding of excellent service has been shaped by rapidly evolving online service providers that have analysed their behaviour to fine-tune their offerings.

Research shows that millennials don’t mind sharing data (even in this day and age) if it delivers better service. Most millennials are aware of the level of information that they have already shared with hotels, and it fuels their sense of frustration that businesses do not make better use of it.

The efforts of hotel operators leave some room for improvement. Customer relationship management initiatives have resulted in little more than uninspiring emails, clumsy SMS’, or unrewarding loyal programmes. By millennial standards this is poor, and won’t cut it with an increasingly sophisticated and demanding audience.

This brings me back to point one; a millennial can walk up to the front desk and a hotel will have little idea who they are, or what they want. Even though hotels have been sitting on mountains of guest preference data for years, it has rarely resulted in ‘personalised’ customer service — that requires technology investment, clear leadership, huge training commitment and sweeping (but subtle) changes to the delivery of hotel services. Essentially, it means re-writing the company DNA to focus on the guest relationship. Not just while they are visiting the property, but when they have left, with the idea of getting them to come back.

Local hoteliers have grasped the need to standardise infrastructure and create agile tech teams, using IT find creative solutions to business problems. But it’s apparent that efforts to build personalised guest services have a long way to go.

Some larger international operators have the appetite and the cash to embrace such reinvention, but it is unclear how many local operators have the understanding, money, or willingness to follow suit. It seems to be a challenge that they are happy to put off until tomorrow.

Much has been written about the intense competition in the regional hotel environment; but how hoteliers adapt to and embrace the use of information technology will increasingly make a competitive difference to their offering. Indeed, it could make all the difference to the long-term health of their company.

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