GLOBAL REPORT—Spending power, fear of missing out, social media and multiculturalism are a few facets of the future influence Generation Z will have on the hotel industry.
Fredrik Korallus, CEO at Generator Hostels, said Generator is already serving members of Gen Z—the age group comprised of people born in 1998 and later—on a daily basis as well as millennials.
“We’ve found Gen Z to be very informed and culturally aware,” Korallus said via email. “They care about their world a great deal, want to live in the present and want to find their own way forward.”
There’s still a lot to learn about Gen Z, but here’s what hoteliers know about this generation and how sources said they expect the age group will influence the hotel industry.
They value experiences over material goods
Members of Gen Z will soon surpass baby boomers in overall volume and are expected to be financially responsible once they are old enough to enter the consumer market.
Korallus said Generator Hostels has found that members of Gen Z are willing to spend, but are less likely to spend money on material items. He said his company markets to Gen Z travelers by promoting a property’s communal space and partnerships with local artists and community events.
“We have found that Gen Z values experiences over material goods and prioritizes travel, food, music and social experiences above many material things,” he said. “By 2020, Gen Z will have more than £44 billion ($63.9 billion) in spending power.”
Mitch Patel, president and CEO of Vision Hospitality, said Gen Z members have FOMO—an acronym that stands for “fear of missing out,”—which could influence hotels to create greater experiences at properties.
“Experiences are the new commodity to them more than ever,” Patel said. “It’s not cars, homes and other material things … experiences and sharing those experiences are so important to millennials and are becoming even more important to Gen Z.”
Patel said designing smaller rooms and adding more communal space is going to become more important in hotels going forward.
This age group is “very communal,” he said. “I don’t think they want to be by themselves in a room. I don’t think that trend is coming back anytime soon.”
Mark Weinstein, SVP and global head of loyalty and partnerships at Hilton Worldwide Holdings, said that the company’s new brand, Tru by Hilton, is ideal for travelers with a young mindset, which includes Gen Z.
“Knowing the audience for this brand is value-conscious, rooms are affordably priced, but do not skimp on the basics,” Weinstein said via email, adding that the brand is “designed around the desire for human connection, personalization and environments that foster experiences.”
Technology and social media are necessities