ISHC - The International Society of Hospitality Consultants |

Are Hotels Coveting only Half of the Millennial Market? Part One | By David M. Brudney

19 September 2017
Are Hotels Coveting only Half of the Millennial Market? Part One | By David M. Brudney
Are Hotels Coveting only Half of the Millennial Market? Part One | By David M. Brudney

Like so many of you, I am smitten with reports on how hotels - - heavily coveting the critical millennial market - - are battling competitors such as Airbnb, HomeAway, and other short-term home-sharing lodging industry providers, for share of market in this new sharing economy age.

These millennials - - more than 75 million aged 18-34, born between 1982 and 2004 - - are projected to be the now and future leisure and business traveler guests for whom hotels have been gearing up.

Marriott and Hilton have lost some lower-end customers to Airbnb and other home-sharing services, while most luxury and business guests have so far kept booking.

With millennials in mind, Marriott has made core changes in both their Element and Aloft brands. Hilton, Wyndham, and Choice among others are following suit as well.

Personalization, local expertise, location, and technology
Hoteliers are becoming aware that the best ways to compete against the alternative-accommodations providers is through personalization, local expertise, location, and technology.

That market is vast: millennials currently spend more than $200 billion annually on travel, FutureCast, "Millennial Brief on Travel and Lodging".

Millennials plan to increase the frequency of their travel compared with Boomers (52.8 percent vs. 32.1 percent), and more millennials plan to increase their travel spending compared to Boomers as well (58 percent vs. 41.3 percent) an American Express report.

Questioning how deep is the size of the millennial market
That's why I was somewhat startled to read a survey conducted by researchers at both Stanford and Harvard (released on line December 8th) that begs the question, will all those millennials be able to afford such travel and become hotel guests?

That survey concluded nearly half of today's 30-year-olds are making less money than their parents did.

Since 2010, the percentage of millennials moving back in with their parents has increased from 24 percent to 26 percent. Millennials are less likely to be living independently of their families and establishing their own households than they were during the recession, Pew Research Center.

According to the U.S. Census Bureau, 22.9 million 18-34-year-olds in America live with their parents. That's one in three! Way more than at anytime since the 1940s.

A look inside the numbers
There has been so much written about these millennials, most interesting of all for me, however, was how millennials crave real experiences, adventure - - plus ways to do good and have fun at work. And that craving, as I understand it, is a leading factor in why so many millennials seek out shared housing alternatives over standard hotels. Here's what we know:

The U.S. economy has contributed to this situation. It hasn't been expanding as fast as it once was. The U.S. GDP was only 2.6 percent in 2015 as opposed to 7.4 percent in 1984; annual growth has not reached 5 percent since then.

More contributing reasons:

My Questions:
All this begs the questions:

  1. Who amongst these 75 million millennials are spending that $200 billion on travel annually?
  2. And how much of that $200 billion is being spent on hotels - - vs. alternative lodging accommodations?

Are the Millennials who have been or will be patronizing our hotels only those millennials who are primarily living on both the east and west coasts - - with jobs? Those who command much higher incomes? Are they "privileged" millennials? Did they graduate from better, top schools? Did they receive inheritance from their parents? Are parents supporting them financially? What's your take?

Well, whatever the answers are, one thing is for sure: what, if anything, are hotels doing about it?

Part II addresses what hotels can do and are doing to compete for traveling millennials with Airbnb and other alternative-lodging providers.


David M. Brudney, ISHC, Principal
Phone: 760-476-0830


David Brudney & Associates
2938A Luciernaga Street
USA - Carlsbad, CA 92009
Phone: 760-994-9266

Recent News

OBITUARY: Death of THE Salesman
4 June 2018

Remembering Peter A. Smith | By David Brudney
18 December 2017

Are Hotels Coveting only Half of the Millennial Market? Part Two | By David M. Brudney
22 September 2017

powered by
Powered by Hsyndicate