How Tech Is Changing the Way Millennials Do Business Travel

by Grant Martin + Skift Team - Jun 2015

Skift Research Take

Building products around and marketing to the next generation of business travelers will not be an easy task. Social, fickle, design-centric and narcissistic, Millennials demand the highest of product standards while resisting traditional marketing methods. In this report, we’ll look at some of the success stories and trends facing the industry as the next generation of travelers comes of age.

Report Overview

Executive summary

Building products around and marketing to the next generation of business travelers will not be an easy task. Social, fickle, design-centric and narcissistic, Millennials demand the highest of product standards while resisting traditional marketing methods. They also require careful engagement and feedback throughout their experience.

Cracking the code then means taking a hard look at Millennial sensibilities and applying the constraints of business travel to that mold. Silvercar has disrupted the rental car industry by taking a tired business model and applying mobile and design-centric flair. Hotel Tonight got traction in building a business entirely around its smartphone app. Legacy brands like American Airlines and Hilton are appealing to the next generation of travelers by extending their services to wearable technology and launching products tuned to the Millennial mindset.

Technology, design and value will be the cornerstones on which this infrastructure will be built. In this report, we’ll touch on the roots of all three areas, from the mobile values of the Millennial market to how brands like Virgin America are pitching their airline to subtly address the deep-seated debt that lies underneath a generation of travelers.

Throughout, we’ll highlight bright stars in the travel industry, from the Centric Hotels currently in production from Hyatt to Concur, the travel management software that’s successfully integrating corporate trip planning into the Millennial lifestyle.

Executive summary

Building products around and marketing to the next generation of business travelers will not be an easy task. Social, fickle, design-centric and narcissistic, Millennials demand the highest of product standards while resisting traditional marketing methods. They also require careful engagement and feedback throughout their experience.

Cracking the code then means taking a hard look at Millennial sensibilities and applying the constraints of business travel to that mold. Silvercar has disrupted the rental car industry by taking a tired business model and applying mobile and design-centric flair. Hotel Tonight got traction in building a business entirely around its smartphone app. Legacy brands like American Airlines and Hilton are appealing to the next generation of travelers by extending their services to wearable technology and launching products tuned to the Millennial mindset.

Technology, design and value will be the cornerstones on which this infrastructure will be built. In this report, we’ll touch on the roots of all three areas, from the mobile values of the Millennial market to how brands like Virgin America are pitching their airline to subtly address the deep-seated debt that lies underneath a generation of travelers.

Throughout, we’ll highlight bright stars in the travel industry, from the Centric Hotels currently in production from Hyatt to Concur, the travel management software that’s successfully integrating corporate trip planning into the Millennial lifestyle.

Introduction

As Millennials become a larger portion of the maturing workforce, they are reshaping the economy and marketing of business travel. For instance, the standbys of yellow checkered cabs and big box hotels are becoming less a component of the traveler diet. In this brave new world, digital rules the landscape, from mobile boarding passes to beacon-enabled airports to smartphone-activated door locks.

To keep up, brands need to both stay connected with the rapidly changing tech economy and the modern tastes of the burgeoning Millennial generation, carefully considering the impact of each decision.

In the hotel space, brands experiment with design, function and technology freely, quickly deploying or folding experimental concepts. The airline industry in U.S. suffers from more constraints, be it from the Federal Aviation Administration (FAA), Department of Homeland Security (DHS) or its own cost-cutting measures, but also has room to tinker.

All corners of the market, however, are influenced by maturing and often ephemeral technology that has captured the imagination of consumers. Below, we’ll walk through some of the macroscopic trends as applied to Millennial business travelers and then see how the industry can evolve against that backdrop.

Defining the Millennial (business traveler)

Officially defined as the generation born between the early 1980s and the early 2000s, Millennials — a group of around 75 million people in the U.S. — are now coming of age in the workforce, bringing with them their unique travel budgets and particular sensibilities.

Along the way, they’re forging new paths for how marketers who hope to woo them. “Millennials are no longer deeply loyal to brands in terms of consistently following them wherever they go,” says Joe Kessler, president of interactive marketing agency Deep Focus and publisher of the Cassandra Report, a biannual report on marketing to younger generations.. “Instead, their loyalty falls to brands that will elevate their cachet and their personal narrative,” he suggests, pointing to products that offer experiences and status over the ones that simply provide a traditional service. Toms, for example, resonates well with Millennials because it allows them to be philanthropic via purchasing shoes for themselves.

Those particularities are just the beginning of a complex Millennial equation. Within the generation itself lies an enormous skew in maturity, career and fiscal spend, a trajectory shaped most dramatically by the silicon age and the boom of mobile technology in the early 2000s.

“There is a big difference between how an 18-year-old is behaving and a 34-year-old is behaving,” said Mark Hoplamazian, the CEO of Hyatt Hotels and Resorts at the January 2015 Americas Lodging Investment Summit in Los Angeles. “The idea of trying to create a brand around this group is really sort of curious.”

Indeed, treating the entire generation as one unit can be problematic. For example, while Kessler correctly points out that as a general cohort Millennials are less brand loyal, there’s a large variance between that loyalty in the older and younger subsets of the generation. A 2015 study from Software Advice found that among younger Millennials, most have only taken the time to sign up for one (if any) hotel loyalty program. Older Millennials, however, found more value in keeping loyalty to several programs.

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The study goes on to reveal that only 1% of the hotel’s loyalty program operated by independent hotels rewards provider Stash is under 24 years old while 6% are between 24 and 34.

The next generation of business travelers is also far more racially diverse and women are much more represented than in previous generations. According to recent data from the Boston Consulting Group, “Millennial business fliers include 60% more Hispanics than, twice as many Asian Americans as, and 40% more women than non-Millennial business fliers.” Adapting products and marketing schemes to fit into this diversity will in many cases take nothing short of a brand overhaul, a major consideration for some of today’s lagging travel providers.

Past the considerations in technology, age and diversity, however, several trends do come to the surface.

Technology is the most prominent. On the older end of that spectrum, Millennials went through primary school in the age where computers were just reaching the mainstream while younger members of the cohort matured in the age of social media and smartphones. The fact that this entire generation was exposed to technology from a very early age does help shape how the travel industry can treat them.

Like everyone else in their generation, Millennial business travelers are also sensitive to design, both in the physical and in the digital space. Effects of that sensitivity are already apparent in a variety of products, from a wave of new hotel brands reaching the market to a raft of new apps like HotelTonight that are geared towards Millennial habits. As the industry turns to a younger audience, the age of poor user experience and web-only design will fade.

Finally, the Millennial business traveler is also defined by budget. As a demographic early in its career trajectory and more willing to save per diem allowances by eating ramen noodles rather than going out for a fancy dinner, Millennials carry their frugality throughout their entire travel experience.

Below, we’ll discuss technology, design and frugality in depth.

A technology forward generation

In a generation where even the youngest members learned to use computers at a very young age, digital considerations need to be taken for every step of the travel experience. Millennial business travelers think not of how well a hotel’s website translates from a computer or even a travel agent to a smartphone, they increasingly look at the mobile website first and only consider the desktop environment as an afterthought.

At large, the travel industry is starting to take mobile design seriously. Leaders in the industry are now designing their products completely around the mobile ecosystem while laggards are rushing to overhaul their ecosystems.

“I think the incumbents have gotten very complacent with their position within the web and it is hard for them to adapt to a mobile world where quality matters, where word-of-mouth is where people find out about new services, where customer support really matters,” says Sam Shank, the founder of Hotel Tonight in an interview with the IBTimes. Hotel Tonight, a last-minute hotel booking tool, is built and distributed solely for a mobile platform and inventory can’t even be accessed through its website.

Short of a perfect mobile presence, Millennial business travelers hold high standards for travel providers in other digital domains. A clean and easy user experience is key, from navigating to and around a website to booking a hotel room to reaching customer support. Busy, poorly designed websites are losing ground to simple, elegant sites that get to the point and eliminate distractions.

Today’s Millennial business travel isn’t about technology itself; rather, it’s the foundation on which they base their travel. They are born in technology. Today’s Millennial business traveler is about efficiency in technology.

Design sensitivities

Beyond a strong need for technology, Millennial business travelers remain in line with the general core values of the generation. And at the top of the priority stack lies attention to design.

Virgin America is perhaps the crown jewel in the crown of Millennial-centric travel brands. “Many of the design and technology changes we brought to the skies were built around the preferences of modern travelers,” Abby Lunardini, vice president of brand marketing and communications at the company, tells Skift. That airline, launched in 2007, perennially wins ‘favorite airline’ awards among travelers thanks to its award-winning cabin design, broad connectivity options and fresh overall take on travel.

“We actually have a very strong share of business travelers given our location and unique product (including our premium cabins),” Lunardini says,, pointing to strong revenues from business-centric routes from San Francisco to Los Angeles and New York.

It’s important to create, at this point, a distinction between an attention to design and a propensity to spend towards design. As a less financially secure and a convenience-first generation, Millennials will always have their wallets and priorities pushing back against any well-designed product that’s too expensive or too far outside of an urban center or public transit.

Hyatt Centric hotels illustrate how this concept is going to be executed. As a design-forward series of properties, Hyatt plans for the Centric hotels — slated to open in the summer of 2015 — to take advantage of sharp and classy room design, social lobbies and premium, boutique bathroom amenities to appeal to younger travelers. They’ll also tend to be strategically located in or near city centers. Hotels are slated to open in the summer of 2015 in destinations include Long Beach, California; San Francisco; Miami; Atlanta; New York; Washington, D.C.; and Paris, to name a few.

Another boutique example can be found in the Ace Hotels. With notable presences in New York City and Portland, Oregon, Ace Hotels take advantage of large, social public spaces, in-house cafés and unique and smart room designs to haul in droves of Millennial travelers.

Frugality and the Millennial business traveler

The third prevailing theme governing the Millennial business traveler is budget. Early in their careers and with leaner expense accounts, it’s natural to assume that a Millennial business travel may be attracted to a less expensive hotel room or dinner menu. But it’s also important to keep in mind that this is a generation steeped in debt, with four in 10 feeling “overwhelmed” by pressure from student loans, credit card bills or the stratospheric rents associated with many urban areas. When it comes to business travel, this may mean that a young business traveler given a per diem rate may opt for an inexpensive hotel room and meals and then pocket the difference.

As a result, the travel industry needs to look to the next level of cost savings and efficiencies that will attract Millennial travelers.

Hotel business lounges are a great area of potential. Inside of the the Hong Kong Sheraton lounge for Platinum loyalty guests, visitors can help themselves to free small sandwiches, appetizers and alcoholic beverages before heading to their evening plans. A Millennial business traveler might use this opportunity to skip an expensive dinner and skim the evening per diem off into their pockets. Applied inexpensively, hotels may be able to use this concept to appeal to a wider, less elite user group.

The changing face of business travel

Loyalty and what it means to Millennial business travelers

In a generation that’s driven by the selfie stick and social media, many believe that loyalty to a particular brand may lose priority to loyalty to oneself. Millennial business travellers, as a result, may chose to focus on immediate products that enhance their personal status (or their projected status) rather than staying loyal to one sole airline or hotel. Reflecting this, a recent study by Software Advice suggests that 86% of Millennials don’t even belong to a hotel loyalty program.

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In reality, the landscape is not so simple. Business travelers, regardless of generation, will always have a stronger loyalty to brands because of their frequent exposure to rewards programs and the benefits therein. Across the Millennial spectrum though, that strict loyalty drops off precipitously as the business travel becomes more infrequent. This is a common phenomenon as people age, but research shows that young Millennials are unusually brand agnostic.

Road warriors such as consultants and business development managers, for example, may have a stronger loyalty towards traditional brands such as Starwood, Avis or United. Those products are widespread, the benefits are well established and the aggregated loyalty programs can be very lucrative.

Casual Millennial business travelers, however, will let their generational tendencies infect their loyalty. The route from Chicago to San Francisco is a good example. Any given flight search will yield a similar price for nonstop flights among American, United and Virgin America — three carriers that compete on this route. While American and United have strong and decent loyalty programs respectively though, Virgin America’s is widely regarded as middling. Yet despite that deficiency, many Millennials choose to book their travel on Virgin America.

What Virgin America has been able to successfully produce in targeting Millennial business travelers is not only a compelling product but also a compelling experience. And that, explains Joe Kessler, President of Deep Focus, is what really appeals to this audience. Design, in this case, trumps loyalty.

Corporate restrictions

Complicating any design choices for any millennial business traveler are the corporate policies and cultures in place within many Fortune 500 companies. “We tended to book Starwood Hotels wherever we could just because there are so many of them and they have a great loyalty program,” Jason Wu, a former management consultant who traveled weekly for work tells Skift.

At large, many Fortune 500 companies have legacy relationships with airlines, hotels and car companies that provide a significant (or convenient) discount to their body of employees. Those constraints can drive Millennial business travelers away from their preferred choice of hotel provider, instead placing them with a traditional brand.

While this constraint may result in less business for ultra-boutique properties, vacation rentals, or startup travel providers, savvy legacy hotel conglomerates have been able to take advantage by expanding their portfolios into Millennial-centric areas, enticing younger travelers while still satisfying corporate policies.

Hilton’s Canopy hotels reflect this strategy. The brand, which launched late last year, aims to lure Millennial travelers by reengineering breakfast, providing boutique in room amenities and offering bikes to share at each property. But most importantly, the hotels remain underneath the Hilton umbrella, which allows many corporate travelers to easily find and book them.

Further helping the corporate Millennial is the fast pace of development currently under way among legacy corporate booking platforms. Just last year, Concur announced that it would allow AirBnb rentals to be listed among its lodging options, giving travelers a better mechanism to book and expense alternative venues. Kayak is also now working with HomeAway to now list vacation rentals side by side against hotel properties.

Global technology trends

Given the rapid development of technology over the last 20 years, brands have been forced to quickly adapt to a new generation of connectivity and accessibility.

“Millennials travel differently than other generations do,” says Scott Kerr, executive director of business insights and analytics at Time Inc. “Hospitality brands have to understand that Millennials approach travel with a unique agenda anchored in a tech-native, socially aware, experience oriented and thrifty mindset. They’ll seek out virtual resources to plan their trip – relying more on feedback and user comments than their older counterpart. They’ll also share their real-time adventures with friends and family.”

“Millennials travel differently than other generations do. Hospitality brands have to understand that Millennials approach travel with a unique agenda anchored in a tech-native, socially aware, experience oriented and thrifty mindset. They’ll seek out virtual resources to plan their trip – relying more on feedback and user comments than their older counterpart. They’ll also share their real-time adventures with friends and family.” – Scott Kerr, executive director of business insights and analytics at Time Inc.

Social and mobile technologies will thus play a strong role in both legacy and future travel products reaching the market. The growth of products like TripAdvisor and Yelp reflect this well — not only do they act as social review hubs for hotels and restaurants respectively, they also have strong smartphone integration and can also act as booking engines.

All of that connectivity, however, requires the proper infrastructure. Better and faster mobile handsets are bursting onto the market, allowing for better and stronger applications with a greater range of capability. While stronger data plans will help support that bandwidth, above all else, Millennial Business travelers will constantly seek stronger and cheaper WiFi. Across a recent Skift survey of Millennial business travelers, over 50% of respondents ranked “Free inroom WiFi” as their most important hotel technology, an order of magnitude more than the next category.

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Mobile technologies

Perhaps the biggest engine behind the industry’s evolution lies inside of almost every traveler’s pocket: the smartphone. In addition to revolutionizing the manner in which business travelers communicate, a wave of new applications and onboard functionalities is now constantly changing the manner in which business is done.

Free WiFi is a no brainer for attracting Millennial business travelers

As an ultra connected and yet frugal generation, Millennials are extremely sensitive about the state of their public WiFi. For them, unless the signal is ultra fast or ultra unique (say, in an airplane) it should be free.

Smart players in the travel industry have used this to their advantage. WiFi in the Ace Hotel’s lobby in New York City is free, and in the past years, Hilton, Hyatt, Marriott and Starwood have also all revealed free WiFi plans. Each property, in turn, has increased their appeal to Millennial travelers.

On the mobile application front, the low barrier to entry in the development market means that both companies and independent entrepreneurs have an open canvas on which to build, roll out and test new ideas. United Airlines, for example, recently added functionality to its mobile app that allows passengers to tap into the airplane’s server and live stream movies. Most airlines have now added mobile boarding passes to not only their smartphone app but also to wearable devices such as the Apple Watch.

Similarly, the field for mobile startup travel applications has ballooned. Tripit, a mobile itinerary management tools enjoyed fast and wide adoption among business travelers as it simplified the process of categorizing, filing and displaying trip information straight from a user’s inbox. Boutique brands like HotelTonight and SilverCar are mobile-first applications that can’t even fully function without a smartphone, requiring a user to download their technology before booking a room or checking out a vehicle.

Technologies using smartphones are further fueled by the rate of hardware changes coming to handsets. The inclusion of Near Field Communications (NFC) in recent handsets opens up the door for not only contactless payments like Apple Pay but also keyless entry in hotel rooms.

Starwood hotels have been able to implement keyless smartphone entry at scale the fastest. Launched in late 2014, the tool creates a link between a user’s hotel reservation, app and door key. When the user approaches the room, a wave of the smartphone over the door lock simply permits entry.

The on-demand economy

The biggest success stories of smartphone technology in the Millennial business traveler’s world revolve around the on-demand economy, that is, ordering a product or service at the whim of the user.

Uber and Lyft revolutionized this field by turning the taxi industry on its head and putting power into the hands of the users. Now in nearly every major U.S. metropolitan area (with many international cities to boot), on-demand taxi hailing apps are streamlining the ways that business travelers interact with their local taxis. Rides now come to the users instead of the other way around; routes and fares can be automatically monitored and forecasted; receipts go directly into the user’s inbox, eliminating the need to capture a slip of paper and turn it into the office; costs are often lower than traditional taxis and premium vehicles can be rented at whim. The industry has become so widespread and so refined that many Millennial travelers go on multiple trips without even seeing the inside of a cab.

But the on-demand economy goes even further. Apps like Spinlister allow users to share personal bicycles to empower visiting cyclists without their gear. Seamless and Grubhub streamline the process of ordering food from local favorites and delivering to your current location. There are on-demand apps for housework, drycleaning and pretty much everything you can think of.

As on-demand services continue to grow and gain traction, more travel providers will need to take advantage of their capabilities to lure the Millennial business traveler. Already, the Andaz Liverpool Street in London is offering room service directly through its smartphone app. Some 46 of Marriott’s properties allow for “special services” to be ordered through their apps. Virgin’s hotel app even allows guests to order on-demand movies. Iterations on that concept are limitless.

Full stack connectivity

Starwood’s keyless entry program using smartphones to unlock doors through NFC is not only an indicator of where technology is moving in the travel industry but also the type of connectivity that Millennial business travelers seek. By connecting a user’s smartphone, smartwatch, online reservation and physical room into a full stack, Starwood creates the efficient and intelligent experience designed to appeal to the demo.

Mobile technology will be the center of this development. “I think that the younger generation just expects that this is the primary channel through which they’re going to buy most of the things in life,” explains Luke Schneider, the CEO of Silvercar.

Silvercar, a car rental company that only rents silver Audi A4s, has based its entire company on full stack connectivity. Vehicle reservations can be made through either a mobile device or online. Once the user arrives at the target destination, a simple text message or a button on the app directs users to a specific parking lot or delivers the car to the terminal. Users can then pick up and check out the car by simply scanning a QR code on the dashboard of the vehicle.

As new technologies develop, Millennial travelers will look more towards thoroughly and well-designed cross-platform experiences like Silvercar to harbor their business. “Everybody is converging on this space which we call ‘Rides and Drives,’” says Schneider, pointing out that livery companies like Uber and Lyft are working in concert with on-demand car rental companies like his to provide a unified, mobile-friendly experience. “The fact that in the last 30 or 40 years the car rental industry has not adapted to handle this is astonishing.”

Provided the industry does catch up to innovators like Silvercar, brands like National, Avis and Hertz may soon unroll ultra-connected tools that link driver, reservation and vehicle — already, Audi is doing something similar.

Social media

Today’s Millennial traveler is obsessed with social media, using it to research trips, connect with peers or simply illustrate their status — a recent study from Chase Card Services estimated that 97% of the generation posts to social media or share experiences with friends daily while traveling. Business travelers are no exception, though they use the media less for the purposes of bragging and more for trip support and research.

Thanks to efforts from the likes of Delta Air Lines and American Airlines, customer service has been revolutionized through social media. With teams on the clock 24/7 to engage with travelers and diffuse any technical problems, the two airlines have smartly set up shortcuts to reduce customer support turnaround time and escalate customer satisfaction, reestablishing the bar for quality customer service.

Airlines that answer in less than an hour

Source: Skift: Airlines that Answer Flyer’s Tweets in Less Than One Hour

A study that Skift conducted in March 2014 showed that most legacy airlines had active Twitter accounts, with most responding to inquiries in under an hour. Since those tests, service has improved further, with United upping its social media presence and carriers like Etihad even launching premium Twitter feeds for their best customers.

This additional, personalized and often immediate customer support perfectly fits the profile of Millennial business travelers. As a digital-savvy and mobile-forward generation, the convenience of opening up an app and sending a quick message is much more appealing to them over navigating through a website and filling out a form.

Source: Twitter

Source: Twitter

Unfortunately, social media customer support is fairly asymmetric in its implementation across products. While most legacy airlines enjoy excellent engagement, carriers less focused on social travelers others like Frontier and Spirit care little about social customer service. Similarly, few hotel chains have unrolled aggressive Twitter or Facebook engagement campaigns because of their myriad properties, management and franchise responsibilities.

The immediacy and network enabled by social media also makes it good for trip research. Millennial business travelers use sites like Yelp to not only research local food options but also read and write reviews, leaning on the experiences of their peers for recommendations. On Facebook and Twitter, as Scott Kerr, of Time Inc suggests, they solicit advice and recommendations from their personal networks, trusting the experience of their friends, family and coworkers over other research on the web.

Airline trends

In an industry desperately trying to remain profitable it’s easy to see how airlines may not be aggressively marketing towards Millennials, instead electing to cut costs on cabin design, meals and anything else not bolted to the floors. It’s an industry desperate for a fresh take on marketing and design, yet only a few carriers are actively wooing Millennial business travelers. As Boomers and even Gen Xers age out of the traveling public though, airlines will quickly need to pivot. According to data from BCG research, 46% of business flight spend will fall to Millennials by 2020, while by 2025 that number will rise to 54%.

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Airlines will eventually end up reaching the Millennial business travel primarily through the experiences they create, a space in which cabin design, in flight entertainment and connectivity will all play critical roles. To a degree, airlines may also need to adapt their loyalty programs to fit the Millennial profile, though loyalty may play second fiddle to experience for quite some time.

Cabin design considerations

Across an ultra-connected generation of travelers, WiFi connectivity and inflight entertainment will play a growing role as air carriers consider design. Ruminating on Virgin America’s cabin design, Lunardini says “everything was about doing things differently and offering travelers a modern, fresh take on travel.”

For Millennial business travelers, lack of connectivity may soon no longer be an option. Corporate email is now increasingly stored online through services like Gmail while numerous other transactions from time tracking to expense report filing require Internet access to function.

Without an Internet connection, many business travelers lose much of their productivity, so will be increasingly attracted to WiFi-equipped flights. Airlines like Virgin America and JetBlue have taken advantage of this by advertising that all of their flights have WiFi. Laggards such as United and American, in the meantime, are scrambling to update their entire networks.

Connectivity also extends to inflight power. Many forward-looking seat designs include USB ports in each row, while some even include AC plugs. Millennial travelers tend to book these flights over powerless flights when possible using intelligence from sites like Routehappy integrated into search engines like Expedia and The Hipmunk.

How Millennials view loyalty to airlines

Traditional airline loyalty programs reward passengers based on how many miles they fly. Recently, however, those programs have been changing to reward passengers based on how much they spend.

Considering the general views on loyalty shared by many Millennial Business travelers outlined above and the dwindling utility of the programs, it’s no surprise that many in this generation have little patience for accruing elite status or maintaining a long term relationship with the airlines.

What little loyalty the casual Millennial business traveler does keep tends to end up squandered on middling, unsubstantial rewards. A recent study from eMarketer revealed that most Millennial business travelers hadn’t redeemed points within 12 months, while a disproportionate number of rewards had fallen towards gift cards and upgrades rather than substantial, free flights.

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Needless to say, road warriors among the Millennial cohort can and will hold loyalty to an airline, provided they are given proper incentive. “The travel brands gaining traction with this audience use a calibrated mix of attainable, flexible rewards, ongoing guest feedback and old-fashioned hospitality to win them over,” suggests the Business Travel 2.0: Millennial Behaviors Shift Travel Marketing Dollars report at eMarketer.

Hotel trends

The hotel industry has enormous potential to shape its business around Millennial travelers in the coming years. “I see the biggest opportunity right now to capture the hearts, minds, and wallets of the Millennial traveler in the hotel industry,” says Kerr of Time Inc. Marriott for example, is experimenting with wireless charging in some of its lobbies, while its Moxy Hotels are designed to appeal to Millennials.

Large hotel brands have a great advantage within the industry in their ability to quickly adapt their portfolios to current generational needs on an ongoing and high-turnover basis — a luxury that other industries like airlines cannot afford. They also have the benefit of working with a highly engaged audience. In contrast to the airline industry, Millennial business travelers engage deeply with their hotel experiences on multiple fronts, sharing their experiences widely via social media along the way.

Hotels sharply focused on Millennial business travelers are focused on technology, design and price point, three key areas of sensitivity to the younger generation. Richard Branson’s new Virgin Hotels highlight this well. Multiple facets of the in-room experience can be controlled from the user’s smartphone; WiFi is free; rooms have been redesigned and updated with locally sourced amenities.

As the Millennial market share grows among business travelers, traditional hotels will need to underscore their efforts around clean design, good value and above all else, technology. Already, according to Skift’s hotel technology poll, Millennials prioritize free WiFi by an order of magnitude above all other in-room technologies. As mobile technology grows past a convenience to a necessity (as in the case of Virgin hotels), that WiFi connection is going to be even more important.

How Millennials view loyalty to hotels

In line with the Millennial view on airline loyalty, younger travelers tend to be less interested in joining and maintaining a relationship with rewards programs in the hotel space. Mentioned above, a recent study from Software Advice found that only 14% of Millennial travelers are enrolled in at least one hotel loyalty program, indicating both an indifference towards the rewards and a growing tendency for travelers to stay in boutique or vacation rental properties while traveling.

Tooling the next generation of hotel loyalty programs to cater to Millennial business travelers will be a challenge, considering their resistance to traditional, direct marketing methods. “Hotel marketers should take notice of brands that successfully engage with Millennials and aim to inject simplicity, transparency and meaning into marketing materials that promote a hotel’s loyalty program offering,” suggests the study from Software Advice.

When Millennial business travelers do end up earning and redeeming points, their awards tend to skew more towards free or discounted stays.

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Boutique vs. legacy

Because of their sensitivity to unique design and technology, Millennials have a stronger tendency to gravitate towards boutique vs traditional products. Though this applies to everything from fashion to real estate, there are also many examples in the travel industry.

In the air, this trend points to the likes of preferential bookings on Virgin America with its posh cabins and JetBlue, which offers updated Mint first class seats.

On the ground, boutique lodging includes a broad spectrum of options.

At the far end of the boutique register lie one-of-a-kind rental properties offered up by sites like Airbnb and VRBO and HomeAway. Though data from a recent Hipmunk survey only shows that 12.8% of Millennials have ever stayed in a vacation rental for business travel (compared to 15.2% across Generation X), there is little doubt that the industry is growing. New integration between providers like Airbnb and booking portals like Concur are helping business travelers book through corporate accounts. On its own, Airbnb also has a booking engine built solely for business travelers, effectively weeding out the properties not suitable for corporate travel.

“..we want to start automating for companies that don’t use Concur so that there is a way for travelers not to have to input a corporate ID on our site,” said Marc McCabe, Airbnb’s business travel lead in an interview with BusinessTravelNews.com. We are very close to launching this,” he continued.

Past the vacation rental market lies a broad range of boutique hotel properties from the completely independent, such as the Ace in New York to the corporate designed, such as the Element, a Starwood brand. Jetsetter, a “members-only” site founded by the Gilt Groupe and acquired by TripAdvisor in 2013, created an entire business out of curating and selling bookings to these properties. With a website design that takes advantage of bold visuals and carefully carefully crafted descriptions, Jetsetter creates a sense of virtual exclusivity, a trait often sought by Millennial travelers.

Still, many business travelers in the Millennial generation remain constrained by the boundaries set up by their corporate culture or their traveling peers. In cases like these, they will often seek out the intersection of boutique hotels and a corporate underpinning. Just as the top brewers have launched microbrew brands to meet shifting demand, Starwood, Marriott, Hilton and Hyatt have all started building out brands to cater to this preference, allowing travelers to get the boutique feel of a small property but also reap the benefits of a legacy hotel network and loyalty program.

Credit cards and the points economy

While Generation Y is lukewarm on rewards programs, one exception is in credit cards. Airline and hotel credit cards have grown in popularity over the last years as consumers in the recovering economy looks for new cost savings and banks explore ways in which to attract them. For everyday consumers that want a return on their daily spending, these cards present little value over a typical cash-back card, but for business travelers already living with the ecosystem, industry credit cards can be extremely lucrative.

Millennial business travelers, who have a higher tendency to mix business and leisure trips and who are extremely cost-sensitive, are particularly interested in maximizing credit card points, especially as airlines and hotels become stingier with their respective programs. “We’ve definitely seen more and more people viewing our points and miles content over the years,” Zach Honig, the editor-in-chief of The Points Guy tells us, pointing to stratospheric growth in points sites like The Points Guy, One Mile at a Time and View from the Wing.

Banks, for their part, have rushed to keep up with demand, constantly producing new credit cards and promotions to keep up with the frothing demand. “Credit card issuers are offering increasingly larger sign-up bonuses — as high as 100,000 points or miles at times,” continues Honig. “There’s no question that there are more points and miles available than ever before.”

Among the cards growing in popularity are those that allow consumers to bank points in a holding account and disburse them to multiple partners. “Certain cards like the Barclaycard Arrival Plus let you earn points that can be applied to any purchased ticket (or other travel expense),” explains Honig.

Starwood’s AmEx credit card is also a particularly popular points-bank card and is widely carried among frequent travelers. Those who sign up for the credit card earn one point per dollar spent on general purchases and up to five per dollar spent on Starwood properties. Additionally, cardholders get five stays towards their annual elite status, effectively fast tracking them to room upgrades, points bonuses and other perks.

When it comes to spending the points, SPG cardholders have a variety of options including over two dozen airline partners and direct flight bookings — all in addition to the hotel rooms available for award stays.

As new award cards come on line and the community gets savvier, expect more Millennial travelers to start using personal cards for corporate expenses and skimming the points off of the transaction. It’s a small increase in complexity for travelers and corporations, but the perks are a good reward for heavy business travel.

9 key strategies for attracting Millennial business travelers

  • Focus on full stack connectivity – The Millennial generation is connected on all levels between the myriad applications on mobile to the office or home desktop environment. Ensuring that the consumer is connected across all touchpoints with the same data and the same functionality is imperative.
  • Integrate technology into all corners of the travel experience – Millennial business travelers live and die by their mobile devices, which means they need to power by their bedsides and the right docking stations to for their phones. Designing products with the tech-focused consumer in mind leads to better-connected, happy customers.
  • Design applications and websites for mobile in parallel or prior to desktop development – As global transactions move from desktop to mobile environments, applications designed for the handset rather than the notebook web browser are going to grow in popularity. Websites and tools not designed for mobile will fail.
  • Align WiFi costs with market and industry expectations – An aggressive WiFi pricing policy requires a strong product, high demand and low competition. Unless those three criteria are met, the internet should be free.
  • Offer a full spectrum of loyalty rewards – The popularity of flexible points cards like the SPG AmEx and the Barclaycard Arrival Plus shows that consumers want to work with points that work for multiple applications. Limiting the utility of credit card, airline or hotel loyalty points severely limits the target addressable market of the loyalty program.
  • Consider the skew of travel habits across the wide generation – Bear in mind that Millennials range in age from 18 to 34 years old. While technology and design does play a strong roll across the entire generation, financial and familial background can dramatically vary.
  • Integrate social media intelligently into hard and soft products – Social plays a strong role in many connected business travelers and it can easily turn into a platform for complaints. Have a social media strategy in place for all hard products and also encourage feedback in apps and other online tools.
  • Apply boutique sensibilities to corporate product footprints – Millennials are tired of blocky, repeatable rooms, seats and vehicles. Applying a bit of personality to a legacy product can go a long way towards attracting a new swath of business travelers.
  • Provide incentives to branded credit card users to encourage bleisure travel – Many Millennial business travelers use personal credit cards for corporate expenses in an effort to gather more points. But there needs to be a tangible and realistic reward at the end. Providing a low level award or status level to corporate travelers will ensure brand loyalty and promote more sales.

Endnotes and further reading

  1. “2015 Is The Year Of The Millennial Customer: 5 Key Traits These 80 Million Consumers Share,” Forbes (December 2014)
  2. “Hotel CEOs talk Wi-Fi, Millennials and mobile keys,” USA Today (February 2015)
  3. “Millennials less likely to be brand loyal,” Marketplace (May 2012).
  4. “Strategies for Increasing Millennial Participation in Hotel Loyalty Programs IndustryView | 2015,” Software Advice (February 2015).
  5. “TBD,” IBID (TBD 2015).
  6. Traveling With Millennials, BCG Perspectives
  7. “Travel Habits of Millennials: Older Millennials Outpace All Others in Mobile Booking,” Rafat Ali, Skift (June 2015).
  8. “The Reason Behind GoPro’s Partnership with Marriott,” David Gilbert, International Business Times (November 2013).
  9. “Millennials Becoming ‘Minimalists’,” Millennial Marketing.
  10. “Best Domestic Airlines for Business Travel,” Travel + Leisure (August 2014).
  11. “Hyatt Launches New Centric Brand for Hurried Modern Travelers,” Greg Oates, Skift (January 2015).
  12. “Millennials ‘overwhelmed’ by debt,” Blake Ellis, CNN Money (June 2014).
  13. “Strategies for Increasing Millennial Participation in Hotel Loyalty Programs IndustryView | 2015,” Taylor Short, Software Advice (February 2015).
  14. “American Airlines and Marriott Take Top U.S. Honors in Freddie Loyalty Program Awards,” Grant Martin, Skift (April 2014).
  15. “Can Hilton’s New Canopy Brand Help Redefine Lifestyle Hotels?” Greg Oates, Skift (October 2014)
  16. “Business Travel and Sharing Collide as Airbnb and Uber Ink Deals with Concur,” Jason Clampet, Skift (July 2014).
  17. “Kayak Partners With Booking.com Competitor HomeAway on Vacation Rentals,” Dennis Schaal, Skift (June 2015).
  18. “Starwood Launches Keyless Mobile Entry at Some U.S. and Asian Properties” Dan Peltier, Skift (November 2014)
  19. “The Hotel Smartphone App Will Control Room Service and Everything Else,” Grant Martin, Skift (May 2015).
  20. “A Virgin Hotel Finally Opens, Hopes Snazzy App Will Set It Apart,” Dan Peltier, Skift (January 2015).
  21. “Audi Launches On Demand Car Service,” Grant Martin, ForbesLife (April 2015).
  22. “Three-Quarters of Millennial Travelers Update Social Media Once a Day,” Samantha Shankman, Skift (June 2014)
  23. “10 Airlines That Answer Flyers’ Tweets in Less Than 1 Hour,” Samantha Shankman, Skift (March 2015).
  24. “The Etihad Twitter Feed You Can’t Follow Unless You’re Super Special,” Marisa Garcia, Skift (June 2015).
  25. “Millennial Business Travelers,” BCG Perspectives.
  26. “How United’s Loyalty Program Lets the Mileage Rich Get Richer,” Dennis Schaal, Skift (July 2013).
  27. “How Loyal Are Millennial Travelers?,” eMarketer (November 2013).
  28. “TBD,” IBID (TBD 2015).
  29. “Marriott Adding Futuristic Wireless Charging Stations to Lobbies,” Paul Brady, Conde Nast Traveler (October 2014).
  30. “Marriott Wants Moxy to Deliver the Millennial Customer, With Help From Ikea,” Greg Oates, Skift (February 2014)
  31. “Interview: Behind the Long-Awaited Opening of Virgin’s First Hotel,” Greg Oates, Skift (January 2015).
  32. “Strategies for Increasing Millennial Participation in Hotel Loyalty Programs IndustryView | 2015,” Taylor Short, Software Advice (February 2015).
  33. “Marketing to Millennials? Make It Personal and Customized,” Debra Kaye, Entrepreneur (July 2014)
  34. “TBD,” IBID (TBD 2015).
  35. “TBD,” IBID (TBD 2015).
  36. “Where Do Millennials Shop for Fashion?,” Millennial Marketing.
  37. “Millennials in the hospitality industry: how hotels need to adapt,” Daylighted (March 2015).
  38. “Understanding The Millennial Traveler,” Tailwind.
  39. “Interview: Airbnb Business Travel Lead Marc McCabe,” BusinessTravelNews (March 2015)
  40. “NerdWallet’s Best Travel Credit Cards, 2015,” Anisha Sekar, NerdWallet.