Ignore the millennial generation at your company’s peril.
Generally, this generation was born between 1981 and 1996; so their age ranges from around 20 to 36 years old. This market is almost 80 million people; almost 25% of the total population. They have an annual buying power of $200 billion – up to $1 trillion by some estimates. By 2020 this generation will make up 50% of the global workforce. Why would you ignore a huge potential market share?
They are not going away and their desires will drive the marketplace for years to come. In fact, millennial preferences are also being embraced by other generations, in ways such as adventures tours.
Why is the millennial generation different?
Boston Consulting Group reports, the millennial generation “is more interested than older generations in traveling abroad as much as possible—by a 23-percentage-point margin”.
The same holds true internationally. The United Nations estimates 20 percent of all international tourists, or almost 200 million travelers, are young people, and that they generate more than $180 billion in annual tourism revenue, an increase of nearly 30 percent since 2007.
Millennials Ignore or Block Advertising
Millennials do not trust advertising. They believe it is all spin. They routinely skip commercials and block or avoid banner advertisements on news sites or on social media. They will look at brands that they consider “authentic”.
Only 1% of millennials will trust a brand when presented with a compelling advertisement, according to a survey of the group. Over 84% say they don’t trust traditional advertising like magazine ads, direct mail or radio. Over 95% of millennials say friends are the most credible source of product information.
Your brand should speak to millennials as a friend with a conversational tone rather than any kind of sales approach.
NPR quotes a few millennials describing an advertisement that they liked as:
“An Ikea commercial, where they just let a bunch of little cats roam around Ikea and make themselves comfortable on the furniture. The end was something like, ‘A place to call home,’ or something about home. I personally just liked it because it wasn’t too loud or in your face. It kind of just stayed quiet. It was subtle. I like subtle.”
— James McOmber, 28, musician
“I think Cheerios had a great marketing campaign, especially their focus on homosexual marriages and children and bringing all of that together. And I think that awareness points to things that are happening socially. I liked that they put out an ad recently where I couldn’t even tell that the ad was for Cheerios until the end, because the message was completely different. I think it’s interesting that companies feel social responsibility to put good things out in the world.”
— Amy Sandefur, higher education recruiter
And other advertising they hate:
“One campaign that really turned me off was the Kia campaign with the hip-hop hamsters. I think they’re trying so hard. And that kind of turns us off because there’s a lack of authenticity. When you want us to buy a car, you’re trying too hard when you’re putting people in hamster costumes and hip-hop dancing and driving through neon-light cities. It’s just too much.”
— Mamie Young, 31, graphic designer
On advice for advertisers:
“Honestly, If I could say anything to the advertisers, it’d be this: Entertain me, make me happy, capture my attention, speak to my conscious and then leave me the heck alone.”
— Antonus Siler, 34, digital marketing
Millennials Consume Blogs
Only 3% of millennials look to news sites, while 33% rely on blogs before making a purchase. They perform research online using blogs, forums and YouTube videos and do not respond to intrusive ads.
Millennials go to social media to get an authentic look at what is happening in the world especially through the eyes of their peers. 87% millennials are influenced by user-generated content and 73% say they read other opinions before purchasing. This makes travel and review sites extremely important. Vacation Rental Managers must monitor and respond on these sites to earn the trust of this market.
Word of mouth today takes place on social media and review sites. Millennials look to these for travel recommendations but are also quick to complain when things don’t go as expected.
Delivering your message with video or other visual devices is important with millennials as about 76% are visual learners.
Authenticity over Content
Trust comes first to millennials. They will trust people before brands and 43% look to an authenticity over content when consuming news.
Authenticity comes in many forms. The rise in Airbnb shows the power of this driving force; with “live like a local”. The newly announced “trips” provides local tours and new experiences.
Travel brands that partner with local businesses to provide a rich, unique, local experiences will win with millennials. It could be a day on the water with a local crabber or a visit to see how soft shell crabs are harvested. The more hands on and personal the experience the better.
An honest approach works well with millennials. Instead of downplaying a perceived flaw with your property you will be better off being straight forward or finding a way to highlight what is unusual. They will respond to what is real and unique. They do not respond well to false superlatives; in fact, it is a turn-off.
This generation was severely impacted by the most recent recession and the repercussions will influence their buying decisions for years to come. More than half (57%) Millennials believe their spending habits will not change even after receiving inheritance of estimated $30 billion from baby boomers.
While millennials are adept and enjoy the planning experience with travel and use more than 10 sources before booking travel; they are two to three times more likely than other generations to plan a trip within 2 weeks of departure.
They expect brands to engage with them personally on social networks. Over 62% say they are more likely to become a loyal customer when a brand engages with them on social media.
Engaging with millennials through messaging apps is more personal and will continue to develop either through branded apps or using existing 3rd party messaging apps. They look for instant gratification and instant communication.
Over 42% Millennials want a say in what products are created for them. The more involved in the process you allow them to be the more successful the company will be.
If you ask a millennial what they like or don’t like about your property, be prepared for a conversation. They will tell you and want to be included in making change happen.
Early Adopters and Multiple Tech Devices
About 87% of millennials use 2 to 3 tech devices daily and over 30% are using wearable devices; like the iwatch.
The smartphone is the millennials constant companion and is increasingly used as a “remote control”. Using the IoT to shape travel experiences from keyless entry and temperature control to finding the experiences millennials seek in the moment will position your brand for years to come. 36% of millennials prefer mobile check in compared to 19% of other travelers.
Destination Analysts say 72% of millennials make travel plans with smartphones. Vacation rental companies who do not optimize the booking experience for mobile will fall way behind in the years to come. Even with business travel, 32% of millennials book via smartphone. With Google emphasizing “mobile first”, it is not just the millennials who are recognizing that mobile is the way ahead.
75% of millennials post on social media at least once a day while traveling. Vacation rental companies that encourage and reward the sharing by millennials of their experience can win the affection and influence of the individual as well as their friends.
Once a millennial trusts a brand, 60% remain loyal to the brand. The sooner you build a relationship with a millennial the more rewards your brand will likely receive as they will continue to purchase. Loyalty programs work well with millennials especially ones that are personalized to the individual experience.
75% of Millennials believe that a company should give back to society, not just make a profit. Millennials would rather purchase from brands that support local communities. Millennials practice what they preach and 61% have volunteered for a non-profit and 70% consider it “imperative” to address social issues.
At minimum, recycling at your rental home should be a given. But, there are local opportunities for a larger reach in every market. Innovative property managers can get millennials involved and do something good for the community. In the Outer Banks, guests were asked to drop off left over non-perishable food after their stay to benefit the local food pantry.
Rent vs Buy
While 71% millennials would rather buy a car over renting one; 59% would rather rent a house over buying it. Part of this is the fallout from the financial crisis impacting millennials with huge student loan debt, underemployment and leaving many still living with parents. There are other indicators to show millennials are waiting longer and just skipping buying the “starter house” to get a house to meet their needs for a longer period of time once they decide to own.
Millennials have embraced the sharing economy. Services like Airbnb and Rent the Runway have taken advantage of the trend and embraced targeting millennials.
The journey and experience on the way to purchase is just as important as important as the actual experience. Pinterest is an example where the pursuit of the purchase is an act of personal expression.
79% of millennials want to visit all 50 states, 75% say they want to travel abroad as much as possible and 70% want to visit all seven continents in their lifetime.
The experience matters during planning but goes beyond accommodations to food and beverage while visiting. Micro-breweries and vineyards are not an afterthought but an integral part of the local experience. So much so, that these business come first and design the accommodation around the food and drink for a much more immersive experience.
Millennials love to travel for leisure and 62% take advantage of this by extending a business trip to a personal holiday. They are higher spenders while traveling for business compared to other generations. 42% will spend for high-end meals while traveling on business compared to 26% of other generations.
Unemployment hit this generation hard during the recent recession. Many used the lack of jobs as an opportunity for extended travel. But the travel was not just to kill time; 22% used the time during their travel to learn a new language, 15% gained more work experience and 15% to study.
Perhaps jaded by the financial crisis, millennials are not about greed and accumulating stuff. This generation is skeptical of the best laid retirement plans and does not want to wait until then to enjoy travel. Only 6% expect to receive the same social security benefits enjoyed by today’s retirees.
They thrive on authentic experiences and adventure. They live in the moment. This video by Hostelworld speaks to millennials who crave an authentic experience. It shows a group of strangers who happen upon a unique swimming hole and jump the cliff to enjoy a spontaneous skinny dipping experience. Only the tagline reveals the brand and nothing overt says buy.
They look for unique experiences in more remote locations. They avoid typical resort destinations, hotels or gateway cities. They would rather have a back packing vacation than a vanilla resort.
The sooner you forget about “outbound” marketing techniques and look to create an immersive experience not a disruptive experience the better your marketing results toward millennials. 78% of millennials want to learn something new when traveling and 70% expect the places they travel to create an immersive experience. Regardless of the type of travel, 68% of millennials consider travel a top priority. As this generation moves into its prime earning years, their preferences and desires will dynamically change travel as we know it today.