Capitalizing on Millennial Travel Behaviors and Attitudes
Millennials are traveling and spending more than any
generation before them. Forward-looking companies in
travel and hospitality have the opportunity to respond
to the unique attributes of this changing customer base
and in turn win their business and loyalty.
How will you capitalize on millennial travel trends
and behaviors?
2
Contents
Part 2: Millennial Travelers are Tech Savvy 7
Part 1: Millennial Travelers are Loyal 6
Why the Market Matters 4
Abstract 3
Part 3: Millennial Travelers are Social 9
Part 4: Millennial Travelers are Experiential 11
Closing 13
Sources 16
Say what you want about the millennial generation, but it is
the largest to date in terms of population, travel frequency,
and spending. Forward-looking companies in travel and
hospitality are striving to win the business and loyalty of
millennials and cash in on the social influence they have
with their family, friends, and coworkers. In this report,
we’ll explore the strength of the millennial travel market,
share four quintessential millennial traits that characterize
their travel behaviors and attitudes, and provide examples
of ways market-leading companies are responding to the
unique attributes of this changing customer base.
Abstract
4
Millennial travelers are a market with momentum,
both in terms of current value and projected
spending. Millennials, those born between 1981
and 1996, are becoming the most valuable market
segment in the travel and hospitality industry. The
U.S. millennial population, some 71 million people, is
expected to overtake the baby boomer generation
next year. 1 This massive population group also has
the most favorable attitude toward travel and travel-
related spending among all generations. And that
attitude converts — they are traveling and spending
more than any generation before them. 2
Millennials are even traveling more for
business — 38% of millennials travel for work
compared to just 23% of Generation X travelers
and 8% of baby boomers. 3 Even more compelling is
their desire to work on the road. According to one
survey, 81% of millennials associate business travel
Millennial Propensity for Business Travel 3
% W
ho
Tra
vel
for
Wo
rk
40
35
30
25
20
15
10
5
0
Millennials Generation X
Why the Market Matters
Baby Boomers
38%
23%
8%
5
with happiness and job satisfaction. 4 That size and attitude
translates to serious business travel spending power.
The Boston Consulting Group forecasts that by 2020,
“Millennials will account for close to 50% of all business
travel spending.” 5 Travel and hospitality organizations
must consider that business travel, predicated by
enterprise agreements and corporate travel policies, can
be the first point of access to brand-loyal millennials.
In addition to work travel, 80% of millennials said they
take at least one leisure trip per year, according to a 2016
survey. In that same survey, millennials averaged 2.38
vacations compared to 1.8 vacations for Generation X and
1.65 vacations for baby boomers. 6 Furthermore, almost half
of millennials would rather spend their money on traveling
than buying a house, and nearly three-quarters say they
would like to increase their spending on experiences rather
than just physical things in the next year. 7 The message is
clear: millennials like travel, and they are willing to forgo
purchases valued by other generations to fund their next
adventure. Travel and hospitality players need to adapt
their offerings to attract the loan-strapped, experience-
hungry generation.
The market opportunity is huge and shows no signs of
diminishing. To capture it, forward-looking companies
must understand four emerging behavioral and attitudinal
traits. As with the generations that came before, millennials
are heavily influenced by the key developments of their
youth and adolescence. Specifically, millennial traits and
characteristics are driven by the rise of the social internet
and the economic impacts of the recession.
Millennial travelers are:
1. Loyal
2. Tech savvy
3. Social
4. Experiential
The following analysis unpacks the significance of these
traits and explains how market leaders in travel and
hospitality are addressing them with innovative strategies
and new offerings.
Would Millennials Rather Spend Money
on Travel or Buying a House?
Would Millennials Rather Spend Money
on Experiences or Purchases?
ExperiencesTravel
PurchasesHouse
22%
78%
53% 47%
6
Part 1: Millennial Travelers are Loyal
Despite the onslaught of new price competitive airline,
hotel, and booking sites, millennial travelers are the most
brand-loyal travelers to date. They value the benefits of
status and will gladly, even excitedly, offer brand loyalty in
exchange for free flights, stays, rides, and days on the slopes
or at the park. According to Expedia, 48% of millennials
find loyalty important when booking flights and 51% find it
important when booking hotels. This compares to just 31%
and 30% of travelers aged 46-65. 8
Millennials will go to great lengths to stay within their
preferred loyalty programs. Indeed, studies say millennials
will pay as much as $41 more to stay within their preferred
hotel program. 9 To cement this loyalty, travel and hospitality
players must be able to identify their millennial customers
and offer them a compelling experience and value in
exchange for their allegiance. This may take the form of
small touches like being greeted by name at their usual
business travel accommodations or empowering your
frontline employees to make larger gestures of goodwill.
This kind of loyalty goes beyond points and status. In one
survey, 75% of millennial business travelers said they
would stay with a hotel loyalty program even if they lost
all their points and status. 10 In some cases, they believe
their longstanding commitment to a brand might be
rewarded with other indirect benefits. Examples include
fee forgiveness for last minute hotel room cancellations or
barely overweight bags being checked at the airport.
Some industry leaders are offering new and creative
rewards for their most loyal travelers. Last year, Hilton
introduced the ability to pool Hilton Honors points with up
to 10 family members and friends and the option to redeem
points for Amazon purchases, an excellent way to foster
multigenerational loyalty. Kimpton Hotels’ Karma Rewards
program offers members the opportunity to redeem points
for in-room spa treatments and has an exclusive ‘Inner
Circle’ membership status with benefits that include direct
access to Kimpton’s CEO. The novelty and exclusivity of
these programs develops a certain pride among members
that deepens their loyalty and extends the lifetime of their
commitment to the brand.
Companies cannot overlook the importance of capturing
the loyalty of millennials now. Loyalty acquisition costs
faced in the short term will beget recurring customer value
in the long term.
“I will generally work pretty hard to use the brands I have status with or loyalty to first.
Only when I can’t make the travel work with those providers do I ever consider looking
elsewhere. This makes me fairly price insensitive, and I will pay more to stay within the
brand portfolio.
I believe that the longevity of my commitment to those brands gives me some degree of
efficacy in the event plans do go awry.”
Software Company Founder
7
Part 2: Millennial Travelers are Tech Savvy
It is no surprise that millennials are tech savvy. They grew
up in the age of the Internet and spend significant time on
their mobile devices, which enables them to research, plan,
and book travel differently than generations before them.
Approximately two-thirds are comfortable planning an
entire trip on their smartphones, compared to just one-
third of older cohorts. 11 A young oil and gas field engineer
in Oklahoma City told us his skill level with technology
greatly influences how he plans and books travel. Another
millennial said he feels his adeptness with the newest
technology devices gives him a significant advantage when
he books. Their savviness across different sites and apps
yield them more options and better deals.
These comments align with polls saying 66% of millennial
travelers are confident they can find all the same flight and
hotel information whether searching on a mobile device
or a desktop computer, compared to only 43% of older
generations. 12 To meet their like-minded customers where
they are, we expect that rising millennial travel executives
Lufthansa’s FlyingLab VR platform lets passengers visualize upgraded seats to entice them to complete an upsell
will heavily emphasize mobile user experience, native
apps, and social advertising in their efforts to meet their
customers’ expectations. However, millennials’ technical
nimbleness presents the challenge of creating a cohesive
experience across different touchpoints and a variety
of devices. As tech savvy as the consumer is, travel and
hospitality companies must be equally so to keep pace with
their customers and provide them with personalized digital
experiences wherever customers choose to engage with
their favorite brands.
66% of millennial travelers are
confident they can find all the same
flight and hotel information whether
searching on a mobile device or a
desktop computer.
8
This tech savviness continues beyond booking, through the
trip itself. Millennials anticipate the same conveniences on
the road they’re accustomed to at home, and they expect a
lot from their smartphones and other devices when getting
around on trips and vacations. So much so, millennials identify
reliable Wi-Fi as the number one in-flight amenity and will opt
for destinations with Wi-Fi and internet access in order to
remain connected. 13 This connectivity allows them to access
tech-based comforts such as social media, video streaming,
and Google, all without running up cell data usage.
In response to this trend, many airlines are now serving
these young, digital natives with easy access to connectivity
and entertainment onboard. American and Southwest
Airlines, among others, are outfitting planes with onboard
servers loaded with hundreds of hours of content and
offering live satellite television so that passengers can
access entertainment using their own devices, without a
Wi-Fi connection. In our own digital strategy and customer
experience work at a major U.S. airline, we have seen the
focus on the in-flight experience intensify. Millennials are
accustomed to being connected everywhere, and demand the
same when they are in the air.
And some international brands are going further.
Lufthansa is meeting their tech-savvy customers right
at the departure gate with a creative strategy to sell
seat upgrades — they invite passengers to put on VR
glasses and take a 360-degree view of the upgraded seat
and cabin. In the hospitality space, a Sheraton hotel in
Hong Kong provides guests with a touch screen mobile
device pre-loaded with maps, local restaurants, and
recommended activities.
The technology that is so deeply embedded in millennial
lifestyles is expected to be available during travel.
Companies in travel and hospitality must consider how to
provide the table stakes tech that millennials have come
to rely on while also investing in unexpected, technology-
enabled experiences.
Millennials identify reliable Wi-Fi
as the number one in-flight amenity
and will opt for destinations with
Wi-Fi and internet access in order to
remain connected.
Sheraton hotels in Hong Kong offer free access to ‘Handy,’ a phone with unlimited data and tourist-oriented information
9
Part 3: Millennial Travelers are Social
In what has become a hallmark trait for the generation,
millennials form and depend upon meaningful impressions
through frequent engagement on social media platforms.
A solid 84% of millennials said they are likely or very likely
to plan a trip based on someone else’s vacation photos or
social media updates. 14 These aren’t highly touched-up
photos by professional photographers, but rather raw,
unedited moments captured and shared by their friends and
family. Case in point — 71% of millennial respondents in one
study said they look to user-generated content for travel
planning, compared to just 46% of baby boomers. 15 Even
complete strangers can carry influence on the planning
and booking habits of millennials, and companies should
capitalize on this.
“I really enjoyed looking at travel
bloggers on Instagram and bookmark
some of the places that they go. Also,
I’ve messaged them before and they
typically respond. For some reason, I
really trust some of the travel bloggers I
follow and will try to go where they had
good experiences.”
Enterprise Software Salesperson
Moxy New Orleans’ emphasis on affordable luxury illustrates Marriott’s big bet to win millennials away from Airbnb
10
The Freeland Chicago is a quintessential poshtel, combining local flavor and luxury with low-cost accommodations
Leading companies are responding with inventive social
strategies that play right into the social habits of their
younger customers. Some hoteliers are prompting their
guests to share moments of delight with a specific hashtag
that can help them curate this user generated content that
is later used as sales and marketing collateral. One hotel in
Mallorca, Spain, launched a social campaign where guests
could tag their posts with #FillMyFridge to see that the
hotel concierge would do just that. Online travel agencies
are participating as well — Expedia’s Travel Yourself
Interesting campaign encouraged use of entertaining and
unique videos to start streams of viral content.
This social orientation of millennial travelers extends
beyond Instagram feeds and restaurant recommendations,
and now influences how hotels and other accommodations
design their properties. Youth-oriented hostels are gaining
ground in the United States as young travelers look for
cheap ways to explore new cities alongside likeminded
travelers. However, these new businesses come with a
twist. Today’s hostels, or as they are increasingly called,
‘poshtels,’ combine luxury offerings like local artwork,
unique designs, and cultural activities with traditional
community characteristics, like shared kitchens and
dormitories. 16 Big hotel brands like Marriott and Wyndham
now manage alternate hotel brands like Moxy and Tryp that
emphasize communal spaces over luxurious rooms. These
innovative new offerings all point to the importance of
millennials’ desire to build community wherever they travel.
Today’s millennial travelers are very connected and highly
vocal. Smart companies must use that to their advantage by
executing strategies that reward the social behaviors of their
customers in a way that simultaneously attract new ones.
“Candid photos (as opposed to
perfectly lit, professional photos)
that can be found on social media
gives assurance that the featured
photographs published by the business
itself are legitimate.”
Startup HR Director
11
Part 4: Millennial Travelers are Experiential
Finally, millennials are experiential, meaning they are
motivated by the collective experiential value of the trip
rather than a need to relax and rejuvenate. Over 80% say
they are always looking for a unique travel experience and
adventure when they travel, and that the best way to learn
about a place is to live like the locals do. 17
A whopping 90% of millennials like to experience new
things while on vacation. 18 This contrasts against the simple
escapism typically sought by older generations. Another told
us, “the desire for something unique and out-of-the-ordinary
extends to business travel as well. According to one poll, an
astounding 74% of millennial business travelers had stayed
in a vacation rental like Airbnb, compared with just 38% and
20% of Generation X and baby boomer travelers. 19
“[We] focus on broadening our horizons and
getting a more local experience … an Airbnb
is preferred at the final destination.”
Millennial
Icelandair Stopovers are short excursions into Iceland offered to passengers with layovers on their transatlantic flights
In fact, many millennials are now blending leisure
into their business travel in a phenomenon referred
to as ‘bleisure’ travel. In one poll, 77% of millennials
anticipated extending a business trip into a leisure one
over a 12-month period, versus just 58% of Generation
X and 43% of baby boomer travelers. Moreover, 73%
of millennials rate leisure time on business travel as
important, more than any other generation. 20
12
“Zip lining in the rain forest of Costa Rica
is more memorable than sitting in a nice
beach chair with a pool bar that is offered
at every resort in the world from Mexico
to Tahiti.”
Enterprise Software Salesperson
Some niche hoteliers in the industry are offering
experiences that connect customers with a place and its
culture, starting with a strategy that doesn’t confine its
guests to the property. One such property is Mashpi Lodge
in Ecuador, which invites guests on a research outing in a
cloud forest reserve. Fogo Island Inn, located off the coast
of north Fogo Island, Canada, offers activities that include
geology hikes, rowing in a traditional wooden boat, outdoor
winter picnics, and ice fishing. While these are examples are
on the pricier end, airlines like Icelandair and KLM are also
getting into the mix, offering chaperoned city excursions
during longer layovers.
Although millennials are typically seeking different
experiences than other generations when they travel, it
does not mean airlines, hotels, and other travel brands
should cater experiences solely to millennials. In fact,
millennials increasingly travel alongside other generations,
such as parents or young children. 21 Offering daring
experiences that speak to the stereotypical adventure-
seeker is a good start, but the brands that set themselves
apart will be the ones that offer a variety of experiences
that also entice neighboring generations. Even providing
tools that help smooth trip logistics and coordination can go
a long way.
Other more traditional market leaders in hospitality are
starting to compete with Airbnb by introducing competitive
offerings for customers seeking to truly belong in the locale
they’re visiting. Marriott has partnered with the UK-based
home rental company Homemaker, while Hyatt invested in
the vacation rental company Oasis. Their entrance into the
growing home sharing market will offer the experiences
sought by millennials from a brand that’s already earned
their trust.
The consistency and familiarity across properties that was
sought by older generations will not attract adventure-
seeking millennials who value individuality and authenticity.
Forward-looking companies will offer experiences that are
special because they can’t be found anywhere else.
13
Closing
Travel and hospitality organizations can attract millennial
customers by studying their needs and meeting them, and
they can keep these customers by understanding their
expectations and exceeding them.
Specifically, millennial travelers long to reap significant
loyalty rewards that will enable their future travel
endeavors. They utilize and even depend on technology at
every touchpoint along the travel journey, from the first
marketing impression to the car ride home after a vacation.
They go where their friends and trusted influencers
offer positive reviews on social media, and look to make
connections once they arrive. And they want to truly
experience the places they visit, not just check out the most
popular tourist attractions.
The powerful millennial market has the annual buying
power of $200 billion now and will have $7 trillion in liquid
assets by 2020. 22 The organizations who strive to win
these loyal millennials today will be rewarded for a long
time to come.
Credera has partnered with many hospitality and travel
clients to help them deliver exceptional experiences. If you
are interested in exploring how we might be able to help
you, please reach out to us at [email protected].
14
Kevin Erickson
Kevin is a Vice President at Credera and leads the Management Consulting practice. He has
more than 15 years of management, operations, and technology consulting experience, working
with Fortune 500 and mid-market clients across numerous industries. Kevin received his BA in
Accounting & Business Administration from Taylor University and his MBA from The
University of Chicago Booth School of Business.
Brennan Bailey
Brennan is a Manager in Credera’s Management Consulting practice with 6 years of consulting
experience. Brennan has strong solution architecture and design skills, with a focus on software
implementations, strategic business processes and solutioning. Brennan graduated from Baylor
University’s Hankamer School of Business with a BBA in Entrepreneurship and Risk Management and
Insurance.
About the Authors
Christian Buechel
Christian Buechel is a Senior Consultant at Credera in the Management Consulting practice. His
areas of interest include business process improvement, market and competitive analysis, and product
strategy. He graduated from the University of Arkansas with a B.S.B.A. in Supply Chain Management
and Marketing, as well as an MBA.
Credera is a full-service management consulting, user experience design, and technology solutions firm.
We work with Fortune 500 companies, medium-sized businesses, government organizations and clients across a broad range
of industries, and we give them the experience and perspective to solve today’s toughest business and technology challenges.
Founded in 1999, we currently have office locations in Dallas, Houston, and Denver.
F I R M H I G H L I G H T S
Credera possesses a unique combination of deep technical expertise with extensive business backgrounds. Our innovation,
analytics and owner’s mindset separates us from our competitors. Our rigorous recruiting and selection processes provide top
talent at every position – all modeling our core values of integrity, humility, professionalism and excellence.
15
Emily Dunn
Emily Dunn is a Senior Consultant at Credera in the Management Consulting practice.
Emily has served in the roles of Project Manager and Business Analyst with an emphasis on
business intelligence and analytics, product design and development, process documentation
and optimization, and requirements gathering. Emily received both her M.S. in Engineering
Management and B.S. in Mechanical Engineering, minor in Creative Computing, Cum Laude from
Southern Methodist University.
Ben Grotta
Ben is a Senior Consultant at Credera in the Management Consulting practice. During his time at
Credera, Ben has primarily served as a digital analyst, partnering with clients to create valuable,
personalized experiences across customer-facing channels. Ben holds a B.S. in Public Relations from
the Moody College of Communication at the University of Texas.
Daniel Hulse
Daniel Hulse is a Consultant in the Management Consulting practice at Credera. His project
experiences at Credera include strategic advisory, implementation road mapping, product
management, and program management in the staffing industry as well as the home services
industry. He graduated Summa Cum Laude from Texas A&M University with a B.B.A. in Business
Honors and Finance.
16
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