Understanding who they are and how they travel
by TOM GRESHAM
When it comes to understanding the two youngest generational cohorts of consumers, Generation Z and millennials, misconceptions rule the day, according to hotel industry experts. Often, those inside and outside the industry lump together members of both generations into a vague mass, missing the details that make them distinctive.
Linchi Kwok, associate professor in the Collins College of Hospitality Management at Cal Poly Pomona, said many hospitality companies treat millennials and Gen Z as a single “younger” group. Millennials represent those born between approximately 1981 and 1996, while Gen Z covers those born between 1997 and 2012. Lynn Kaniper, president of Dana Communications, agreed that the hospitality industry struggles with “a solid knowledge of the generational differences.”
“Some see ‘young people’ and assume they’re all the same,” Kaniper said. “The industry is finally starting to get a handle on millennials, and it feels like they assume they can apply the same philosophies to reaching Gen Z, but this is definitely not the case.”
Dana Communications has conducted research on the two groups, sharing data with clients and at industry events, and Kaniper said people often are surprised to hear the influence the two generations already have.
“By 2025, millennials will make up 75 percent of the global workforce, but I can remember clients saying to us they don’t have the income,” Kaniper said. “Now, we have this entrepreneurial generation (Gen Z) that is starting businesses in or just after high school, and they have more of an income and are harder working than previous generations.”
Meghan Carty, a research analyst at Skift who has studied generations and travel, said it’s understandably difficult to delineate differences in the generations unless one is immersed in consumer research. She noted that she hears people mistakenly refer to teenagers as millennials, though the youngest of that cohort are young adults.
“It’s not always wrong to lump them together, because they do have some things in common,” Carty said. “And today, we’re mostly paying attention to the oldest of Gen Z, who are likely going to be more similar to young millennials than they will be to the younger people in their own generations, who are still children. But to lump Gen Z (the oldest of whom will be turning 23 this year) with the oldest millennials (the oldest of whom will be turning 39) risks generalizing too much, and this is even more true if members of these generations across different countries are lumped together, as country of residence is often a greater indicator of behavior and preferences than age is on its own.”
WHO THEY ARE
Kaniper points to a series of key general characteristics about the youngest consumer generations.
Millennials, she said “accept diversity, need instant gratification, grew up during an economic boom and are mobile pioneers. They’re also optimistic, focused on experiences, digitally dependent, like value-driven brands, are environmentally conscious and like celebrity endorsements.”
On the other hand, Gen Z “is the most diverse generation…. They’re entrepreneurial, socially responsible, grew up during a recession, realistic, focused on saving money, and are mobile natives. In terms of brands, they favor authenticity and respond best to endorsements from influencers, whom they see as trustworthy and more ‘regular’ than celebrities.”
As it relates to lodging, the generations overlap and differ in a variety of ways. For instance, Carty said millennials’ prioritization of unique experiences has had “a huge impact on the hospitality industry” and Gen Z appears to be following in their footsteps.
“As Gen Zs enter adulthood, I think it will continue,” Carty said. “You can see the impact with the large chains unveiling Instagrammable boutique-like brands all the time, and the general trend of an increased focus on incorporating aspects of the local community and opportunities for offsite activities. Hotels are being forced to compete with the Airbnb experience, which, to many millennial and Gen Z travelers, offers a more ‘live-like-a-local’ authentic experience. I think we can expect that we will continue to see a lot of innovative ways that hotels will try to bring the best aspects of this experience, while maintaining the service and conveniences hotels already offer.”
Kwok said he believes one common misunderstanding about both generational categories is that they are not as drawn to the allure of luxury hotels and restaurants as older generations. “I believe they still want the luxury experience,” he said.
“The way that Gen Z defines luxury, however, might be a little bit different from the older generations,” Kwok said. “Because Gen Z prioritizes things representing extrinsic values over intrinsic values, for example, they probably prefer the luxury experience with many touchpoints that make them feel special. They want sustainability while enjoying the luxury experience, and they also expect easy access to the luxury experience as well as a faster speed in service delivery.”
Kwok said boutique micro-hotels are particularly adapting to Gen Z’s preferences. Kaniper also believes lodging offerings are changing to reflect the younger generations’ mindset.
“Since both generations value experiences, properties are starting to offer pared-down accommodations (i.e., smaller rooms with high-tech touches) so travelers can save money on their stay and put their money toward experiencing the destinations they visit,” Kaniper said. “We’re also seeing an emphasis on social spaces catering to younger generations, like high-tech lounges and rooftop bars. Properties are also amping up their wellness focus, as this is also important to younger generations.”
Kwok said Gen Z is more likely to use mobile devices for payment and delivery service than millennials, and they are more likely to accept automatic service or services provided by machines.
“They ‘naturally’ want to create their own solutions when facing an issue, but millennials look to others for answers, including the companies they do business with,” Kwok said.
LIFE STAGES AND RESPONSIBLE TOURISM
With the oldest members of Gen Z newly entering the workforce and becoming financially independent for the first time, Carty said the group’s youth makes it difficult to say how the generation will be different from its predecessors over the long term.
For instance, recent Skift showed millennials are more likely to have gone on wellness trips and cruises than Gen Z. However, Carty said “It’s unclear if this reflects their actual preferences or if it’s simply a matter of the fact that millennials have had up to 16 years more time to have gone of these types of trip and probably have more disposable income to have done so.”
Some of the differences between millennials and Gen Z boil down to the simple difference in their current life stages.
“Many millennials have their own families now, and if not, they’ve been in the working world for a while and are more career-focused, whereas Gen Z is either still in high school or just getting out of college and beginning their careers; they aren’t starting their own families yet,” Kaniper said. “Especially in terms of travel, millennials are both planning for solo or friend trips, as well as family trips.”
One clear unique trait of the Gen Z traveler is an emphasis on socially responsible travel, Carty said.
“We found that in all the countries we surveyed, Gen Z indicated they make efforts to make responsible travel decisions and that the majority are willing to pay more to use travel companies that demonstrate environmental responsibility,” Carty said. “This is promising to see, but it will take time for us to see whether these values are maintained when it’s their own money they’re spending.”
Kaniper said socially responsible travel among Gen Z not only encompasses concerns tied to sustainability and a reduced carbon footprint.
“Voluntourism is becoming a big trend for this generation and oftentimes, they are picking destinations based on the impact they could have,” Kaniper said.
COMMUNICATING WITH THE GENERATIONS
Kaniper said millennials and Gen Z separate themselves from other generations in their understanding of technology and the role it plays in their everyday lives.
“They use technology to navigate daily life much more than older generations and therefore are on a more similar page,” Kaniper said. “For example, it’s easier for brands to communicate with millennials and Gen Z via channels like social media and apps than it is to connect with Gen X, boomers, etc. on these mediums.”
Experts said technology preferences vary between the generations. When communicating with them, therefore, it’s critical to use the tech resources that best fit your target audience. In social media, Carty said Skift’s research showed Facebook was dominant among millennials, while Gen Z largely favors YouTube, Instagram, and Snapchat.
“While they all seem very tech savvy, they are hanging out in different places,” Kwok said.
Ultimately, generational traveling trends are a crucial consideration for hotel industry insiders, but Carty cautions against leaning into sweeping conclusions. Within a generation, major differences will inevitably exist based on a range of additional details.
“It’s really important to look beyond generation, otherwise some important nuances will be overlooked,” Carty said.