Looking toward the future was the objective at Hotel Management’s recent Executive Roundtable, sponsored by Choice Hotels International. The event, held in April at the San Diego Convention Center during the Asian American Hotel Owners Association’s 30th anniversary conference, brought together a varied group of hospitality leaders who examined how the industry is targeting tomorrow’s travelers, particularly millennials and Gen Z.
Innovation is the name of the game with millennials and Generation Z, whose travel decisions are being driven by the latest technology trends and influenced by social-media platforms. Word of mouth and peer approval are key for these groups and how hoteliers capture their imaginations today will determine how they capture their business—and loyalty—tomorrow.
“I think the millennials are looking for more of an environment where it’s easy, and it’s not like a cookie-cutter type of hotel,” said Jagruti Panwala, chair of the Asian American Hotel Owners Association, noting the 18,500-member organization’s younger associates—many of them second- and third-generation hoteliers—are focusing on meeting the needs of what ostensibly are their peer groups. “Our young professionals are listening to them, so they are looking toward doing more boutique hotels, even working with the brands in creating a hotel that suits their customers. I think the brands are already seeing that.”
She noted that many hotel brands are looking to create experiences for millennials and Gen Zers that are unique and more creative vis-à-vis the guest experience.
Mark Shalala, VP/franchise development-upscale, Choice Hotels International, said it’s always a companywide goal to deliver on guest expectations, but added, “You can’t just create a brand standard for some fad, right? Because that lays a cost on our owners and we have to be responsible about that. And they’ll also revolt. We’re always mindful of that return on investment.”
Shalala indicated it’s important to be aware of current social and technology expectations. “They’re putting a ton of value on experiences, and if you’re a hotelier—at least from where I am in the upscale space—if you’re not designing toward that guest and creating an experience or delivering on what they’re expecting in that market, and you’re just trying to force a cookie cutter or beige box into every market when every market’s different, I think you’re going to start to lose market share,” he said.
Purvi Panwala, president/CEO of hotel ownership and management company Purvi, suggested one of the reasons current and upcoming generations want experiences is because “they’re educated on what’s out there. And because they’re educated and they have these technologies, they want it right now,” she said.
“They want to have that great experience,” said Bharat Patel, president/CEO, Sunny Enterprises of Florida. “On the other hand, they also complain the most for the smallest thing.”
“They’re screen addicts,” offered Kerry Ranson, chief development officer at HP Hotels. “They’re so educated and want this immediate gratification.” He noted that in addition to younger guests, it’s necessary to appeal in a similar way to the younger staff members being onboarded who will interact with these guests. “We’re looking outside to tech companies that are helping us figure out labor components that actually give tools to our team members that are more [attuned] to what they want, more gamification components that actually resonate with them. Those are the pieces I think are important right now, so we’re making adjustments not only on the hotel side from the experience for the guest, but absolutely from a team member and a leadership perspective.”
Ron Burgett, VP of franchise development-extended stay for Choice, noted the generations likely also are having an impact on operations, changing “the labor model for more full-service hotels or even limited-service hotels because we’re not talking about people touching; we are talking about how to go around them.”
Choice’s senior director of digital commerce, Jason Dahlin, observed that these particular generations have grown up always being connected. “What that means is the immediate ability to communicate a good or a bad experience. We’ve all seen that they’re very much influenced by user-generated content that comes from their peers, not from the critics. And so, when you look at how they’re influenced, and you realize that a good or bad experience can sort of echo into this chamber and make a huge impact, it makes it so important to make sure those experiences are very special on the property,” said Dahlin, adding: “I think curating those special experiences at the hotel, or even being able to give them the experience of some local gem that they wouldn’t find otherwise, you kind of become the curator of their experience when they’re visiting, and that’s very important to acknowledge and take advantage of.”
The pace of change around technology platforms and devices has accelerated at what seems like breakneck speed for most owners and operators, often causing hoteliers to be perplexed about what to actually invest in when it comes to meeting guest expectations.
Rachel Humphrey, AAHOA’s interim president/CEO, noted that her members are decidedly implementing new technologies, but advised, “You can’t look at what do we want today. You have to say, ‘What are they going to want two or three years from now?’ Because by the time I implement it, it’s outdated. Now I’ve paid the expense of it, now I’ve gone through training on it. I may have a backup plan in place if my technology fails, but two years from now, that’s going to be a has-been item. There’s the balance of finding and meeting the demands of today, but on the hotelier side, recognizing that every single month we can’t be changing what that need is or how we’re solving that need because the expense side of that becomes astronomical.”
Implementing technology is not the only way to attract millennials and Gen Zers, according to Ricky Raman, COO of PeachState Hospitality.
“From a development standpoint, one of the trends we’ve implemented is putting bigger fitness rooms in [our hotels] … and that’s also been very well received by this generation,” he said. “We closed down a pool, covered it and then put in a big fitness center there. Within six months after opening the renovation, we saw a hockey-stick effect for that one line item … so depending on if it’s a technology component or an actual physical asset component, we were able to see a pretty big increase in just the overall experience that guests were having. They’re spending a longer time in the public space; they’re not going straight to their room or getting something out of the vending machine or the bar; they’re using the actual space. And from an ROI perspective, that’s what you want, right? You want your guest to utilize where you spent money and we’ve seen that in the one hotel that we renovated and took a pool out.”
Right from Wrong
Shalala noted it’s also key to realize when some things, even if trending or trendy, don’t work.
“When we went to platform beds, the [specification] that we had wasn’t right. We knew it within a month because all we heard was people were hitting their shins on the platforms at night. That’s not good. So we were able to swap out that spec and correct it quickly. Brands can respond to things they’re trying to implement, not letting the guest continue to be angry because of a poor spec or a bad decision we made,” he said. On the other hand, implementation of a Bluetooth mirror in the guest bathroom of the Cambria brand proved a hit. “People love it,” he said.
Sal Bhatty, CEO of Hirelinks Corp., said he put a small latte machine in each room of one of his hotels, similar to what he had in a hotel in a different state, and was told by guests: “This brand is not to par … same name, but they just don’t like it.”
In order to be nimble when something isn’t quite right, Ranson indicated, “Making changes and understanding things like a bed is a big issue and saying, ‘All right, we’ve got to quickly make this change in a cost-efficient manner’ [is important]. But then how can they deliver from the consumer standpoint on a reward perspective, because the loyalty piece is still important. The fact of the matter is they become much more loyal if you can make sure that you’re targeting exactly their need on that Tuesday.”
When talking about millennials and Gen Zers, the industry take has been that they’re notorious for not being loyal, but make choices based on whatever the current influence is. For example, if it’s up on Instagram and a celebrity has made a T-shirt or shoes famous, it gets sold out. So it’s often been a struggle to make people loyal to a hotel or brand, the panelists noted.
“Some of the millennials will say, ‘I don’t mind having eight credit cards because I get points on every single one of them and I have the versatility to be able to do different things with every one of them,” said Nimisha Patel, managing partner, Vue Hotels. “Whereas someone in my shoes may just be at ease not having such complication; I’ll just go with my one or two.
“I think the younger generations, they just want fast and convenient and accessibility,” she continued. “They don’t care where they get it from, but they want what they want and they don’t want to have to skip a beat in their lifestyle to be able to get that. So if it means that they’re going to a Choice property or a Marriott property or even an independent boutique property, they will do that based on whatever their specific need is; and it may not even be brand or anything tangible; it could just be location.”
Twinkle Patel, chief development officer, Milestone Hospitality, noted the Instagrammability of a property also is a factor. “There’s a Cambria that just opened in Asheville, N.C. They have a rooftop bar and you have the perfect view of the mountains. Every other person that goes out there is taking a picture. And the menu is perfect because it’s tapas … everything that Asheville is, that Cambria supported all those aspects.”
This brought up the question of what resonates more with these groups, goods or service, to which the panel concurred it is a melding of the two.
“A lot of times we talk about this new generation. Oh, do we need to have a juggling class downstairs to make them feel an experience? It’s like, no, these people still rely on the foundation of the great experience that they grew up going to hotels with their parents,” offered Dahlin.
That said, Burgett stressed: “Millennials are absolutely addicted to the phone … and if you can do anything with technology that is very competitive, especially today in hospitality, we should be doing it.”