Capitalizing on Millennial Travel Behaviors and Attitudes

Millennials are traveling and spending more than any

generation before them. Forward-looking companies in

travel and hospitality have the opportunity to respond

to the unique attributes of this changing customer base

and in turn win their business and loyalty.

How will you capitalize on millennial travel trends

and behaviors?

2

Contents

Part 2: Millennial Travelers are Tech Savvy 7

Part 1: Millennial Travelers are Loyal 6

Why the Market Matters 4

Abstract 3

Part 3: Millennial Travelers are Social 9

Part 4: Millennial Travelers are Experiential 11

Closing 13

Sources 16

Say what you want about the millennial generation, but it is

the largest to date in terms of population, travel frequency,

and spending. Forward-looking companies in travel and

hospitality are striving to win the business and loyalty of

millennials and cash in on the social influence they have

with their family, friends, and coworkers. In this report,

we’ll explore the strength of the millennial travel market,

share four quintessential millennial traits that characterize

their travel behaviors and attitudes, and provide examples

of ways market-leading companies are responding to the

unique attributes of this changing customer base.

Abstract

4

Millennial travelers are a market with momentum,

both in terms of current value and projected

spending. Millennials, those born between 1981

and 1996, are becoming the most valuable market

segment in the travel and hospitality industry. The

U.S. millennial population, some 71 million people, is

expected to overtake the baby boomer generation

next year. 1 This massive population group also has

the most favorable attitude toward travel and travel-

related spending among all generations. And that

attitude converts — they are traveling and spending

more than any generation before them. 2

Millennials are even traveling more for

business — 38% of millennials travel for work

compared to just 23% of Generation X travelers

and 8% of baby boomers. 3 Even more compelling is

their desire to work on the road. According to one

survey, 81% of millennials associate business travel

Millennial Propensity for Business Travel 3

% W

ho

Tra

vel

for

Wo

rk

40

35

30

25

20

15

10

5

0

Millennials Generation X

Why the Market Matters

Baby Boomers

38%

23%

8%

5

with happiness and job satisfaction. 4 That size and attitude

translates to serious business travel spending power.

The Boston Consulting Group forecasts that by 2020,

“Millennials will account for close to 50% of all business

travel spending.” 5 Travel and hospitality organizations

must consider that business travel, predicated by

enterprise agreements and corporate travel policies, can

be the first point of access to brand-loyal millennials.

In addition to work travel, 80% of millennials said they

take at least one leisure trip per year, according to a 2016

survey. In that same survey, millennials averaged 2.38

vacations compared to 1.8 vacations for Generation X and

1.65 vacations for baby boomers. 6 Furthermore, almost half

of millennials would rather spend their money on traveling

than buying a house, and nearly three-quarters say they

would like to increase their spending on experiences rather

than just physical things in the next year. 7 The message is

clear: millennials like travel, and they are willing to forgo

purchases valued by other generations to fund their next

adventure. Travel and hospitality players need to adapt

their offerings to attract the loan-strapped, experience-

hungry generation.

The market opportunity is huge and shows no signs of

diminishing. To capture it, forward-looking companies

must understand four emerging behavioral and attitudinal

traits. As with the generations that came before, millennials

are heavily influenced by the key developments of their

youth and adolescence. Specifically, millennial traits and

characteristics are driven by the rise of the social internet

and the economic impacts of the recession.

Millennial travelers are:

1. Loyal

2. Tech savvy

3. Social

4. Experiential

The following analysis unpacks the significance of these

traits and explains how market leaders in travel and

hospitality are addressing them with innovative strategies

and new offerings.

Would Millennials Rather Spend Money

on Travel or Buying a House?

Would Millennials Rather Spend Money

on Experiences or Purchases?

ExperiencesTravel

PurchasesHouse

22%

78%

53% 47%

6

Part 1: Millennial Travelers are Loyal

Despite the onslaught of new price competitive airline,

hotel, and booking sites, millennial travelers are the most

brand-loyal travelers to date. They value the benefits of

status and will gladly, even excitedly, offer brand loyalty in

exchange for free flights, stays, rides, and days on the slopes

or at the park. According to Expedia, 48% of millennials

find loyalty important when booking flights and 51% find it

important when booking hotels. This compares to just 31%

and 30% of travelers aged 46-65. 8

Millennials will go to great lengths to stay within their

preferred loyalty programs. Indeed, studies say millennials

will pay as much as $41 more to stay within their preferred

hotel program. 9 To cement this loyalty, travel and hospitality

players must be able to identify their millennial customers

and offer them a compelling experience and value in

exchange for their allegiance. This may take the form of

small touches like being greeted by name at their usual

business travel accommodations or empowering your

frontline employees to make larger gestures of goodwill.

This kind of loyalty goes beyond points and status. In one

survey, 75% of millennial business travelers said they

would stay with a hotel loyalty program even if they lost

all their points and status. 10 In some cases, they believe

their longstanding commitment to a brand might be

rewarded with other indirect benefits. Examples include

fee forgiveness for last minute hotel room cancellations or

barely overweight bags being checked at the airport.

Some industry leaders are offering new and creative

rewards for their most loyal travelers. Last year, Hilton

introduced the ability to pool Hilton Honors points with up

to 10 family members and friends and the option to redeem

points for Amazon purchases, an excellent way to foster

multigenerational loyalty. Kimpton Hotels’ Karma Rewards

program offers members the opportunity to redeem points

for in-room spa treatments and has an exclusive ‘Inner

Circle’ membership status with benefits that include direct

access to Kimpton’s CEO. The novelty and exclusivity of

these programs develops a certain pride among members

that deepens their loyalty and extends the lifetime of their

commitment to the brand.

Companies cannot overlook the importance of capturing

the loyalty of millennials now. Loyalty acquisition costs

faced in the short term will beget recurring customer value

in the long term.

“I will generally work pretty hard to use the brands I have status with or loyalty to first.

Only when I can’t make the travel work with those providers do I ever consider looking

elsewhere. This makes me fairly price insensitive, and I will pay more to stay within the

brand portfolio.

I believe that the longevity of my commitment to those brands gives me some degree of

efficacy in the event plans do go awry.”

Software Company Founder

7

Part 2: Millennial Travelers are Tech Savvy

It is no surprise that millennials are tech savvy. They grew

up in the age of the Internet and spend significant time on

their mobile devices, which enables them to research, plan,

and book travel differently than generations before them.

Approximately two-thirds are comfortable planning an

entire trip on their smartphones, compared to just one-

third of older cohorts. 11 A young oil and gas field engineer

in Oklahoma City told us his skill level with technology

greatly influences how he plans and books travel. Another

millennial said he feels his adeptness with the newest

technology devices gives him a significant advantage when

he books. Their savviness across different sites and apps

yield them more options and better deals.

These comments align with polls saying 66% of millennial

travelers are confident they can find all the same flight and

hotel information whether searching on a mobile device

or a desktop computer, compared to only 43% of older

generations. 12 To meet their like-minded customers where

they are, we expect that rising millennial travel executives

Lufthansa’s FlyingLab VR platform lets passengers visualize upgraded seats to entice them to complete an upsell

will heavily emphasize mobile user experience, native

apps, and social advertising in their efforts to meet their

customers’ expectations. However, millennials’ technical

nimbleness presents the challenge of creating a cohesive

experience across different touchpoints and a variety

of devices. As tech savvy as the consumer is, travel and

hospitality companies must be equally so to keep pace with

their customers and provide them with personalized digital

experiences wherever customers choose to engage with

their favorite brands.

66% of millennial travelers are

confident they can find all the same

flight and hotel information whether

searching on a mobile device or a

desktop computer.

8

This tech savviness continues beyond booking, through the

trip itself. Millennials anticipate the same conveniences on

the road they’re accustomed to at home, and they expect a

lot from their smartphones and other devices when getting

around on trips and vacations. So much so, millennials identify

reliable Wi-Fi as the number one in-flight amenity and will opt

for destinations with Wi-Fi and internet access in order to

remain connected. 13 This connectivity allows them to access

tech-based comforts such as social media, video streaming,

and Google, all without running up cell data usage.

In response to this trend, many airlines are now serving

these young, digital natives with easy access to connectivity

and entertainment onboard. American and Southwest

Airlines, among others, are outfitting planes with onboard

servers loaded with hundreds of hours of content and

offering live satellite television so that passengers can

access entertainment using their own devices, without a

Wi-Fi connection. In our own digital strategy and customer

experience work at a major U.S. airline, we have seen the

focus on the in-flight experience intensify. Millennials are

accustomed to being connected everywhere, and demand the

same when they are in the air.

And some international brands are going further.

Lufthansa is meeting their tech-savvy customers right

at the departure gate with a creative strategy to sell

seat upgrades — they invite passengers to put on VR

glasses and take a 360-degree view of the upgraded seat

and cabin. In the hospitality space, a Sheraton hotel in

Hong Kong provides guests with a touch screen mobile

device pre-loaded with maps, local restaurants, and

recommended activities.

The technology that is so deeply embedded in millennial

lifestyles is expected to be available during travel.

Companies in travel and hospitality must consider how to

provide the table stakes tech that millennials have come

to rely on while also investing in unexpected, technology-

enabled experiences.

Millennials identify reliable Wi-Fi

as the number one in-flight amenity

and will opt for destinations with

Wi-Fi and internet access in order to

remain connected.

Sheraton hotels in Hong Kong offer free access to ‘Handy,’ a phone with unlimited data and tourist-oriented information

9

Part 3: Millennial Travelers are Social

In what has become a hallmark trait for the generation,

millennials form and depend upon meaningful impressions

through frequent engagement on social media platforms.

A solid 84% of millennials said they are likely or very likely

to plan a trip based on someone else’s vacation photos or

social media updates. 14 These aren’t highly touched-up

photos by professional photographers, but rather raw,

unedited moments captured and shared by their friends and

family. Case in point — 71% of millennial respondents in one

study said they look to user-generated content for travel

planning, compared to just 46% of baby boomers. 15 Even

complete strangers can carry influence on the planning

and booking habits of millennials, and companies should

capitalize on this.

“I really enjoyed looking at travel

bloggers on Instagram and bookmark

some of the places that they go. Also,

I’ve messaged them before and they

typically respond. For some reason, I

really trust some of the travel bloggers I

follow and will try to go where they had

good experiences.”

Enterprise Software Salesperson

Moxy New Orleans’ emphasis on affordable luxury illustrates Marriott’s big bet to win millennials away from Airbnb

10

The Freeland Chicago is a quintessential poshtel, combining local flavor and luxury with low-cost accommodations

Leading companies are responding with inventive social

strategies that play right into the social habits of their

younger customers. Some hoteliers are prompting their

guests to share moments of delight with a specific hashtag

that can help them curate this user generated content that

is later used as sales and marketing collateral. One hotel in

Mallorca, Spain, launched a social campaign where guests

could tag their posts with #FillMyFridge to see that the

hotel concierge would do just that. Online travel agencies

are participating as well — Expedia’s Travel Yourself

Interesting campaign encouraged use of entertaining and

unique videos to start streams of viral content.

This social orientation of millennial travelers extends

beyond Instagram feeds and restaurant recommendations,

and now influences how hotels and other accommodations

design their properties. Youth-oriented hostels are gaining

ground in the United States as young travelers look for

cheap ways to explore new cities alongside likeminded

travelers. However, these new businesses come with a

twist. Today’s hostels, or as they are increasingly called,

‘poshtels,’ combine luxury offerings like local artwork,

unique designs, and cultural activities with traditional

community characteristics, like shared kitchens and

dormitories. 16 Big hotel brands like Marriott and Wyndham

now manage alternate hotel brands like Moxy and Tryp that

emphasize communal spaces over luxurious rooms. These

innovative new offerings all point to the importance of

millennials’ desire to build community wherever they travel.

Today’s millennial travelers are very connected and highly

vocal. Smart companies must use that to their advantage by

executing strategies that reward the social behaviors of their

customers in a way that simultaneously attract new ones.

“Candid photos (as opposed to

perfectly lit, professional photos)

that can be found on social media

gives assurance that the featured

photographs published by the business

itself are legitimate.”

Startup HR Director

11

Part 4: Millennial Travelers are Experiential

Finally, millennials are experiential, meaning they are

motivated by the collective experiential value of the trip

rather than a need to relax and rejuvenate. Over 80% say

they are always looking for a unique travel experience and

adventure when they travel, and that the best way to learn

about a place is to live like the locals do. 17

A whopping 90% of millennials like to experience new

things while on vacation. 18 This contrasts against the simple

escapism typically sought by older generations. Another told

us, “the desire for something unique and out-of-the-ordinary

extends to business travel as well. According to one poll, an

astounding 74% of millennial business travelers had stayed

in a vacation rental like Airbnb, compared with just 38% and

20% of Generation X and baby boomer travelers. 19

“[We] focus on broadening our horizons and

getting a more local experience … an Airbnb

is preferred at the final destination.”

Millennial

Icelandair Stopovers are short excursions into Iceland offered to passengers with layovers on their transatlantic flights

In fact, many millennials are now blending leisure

into their business travel in a phenomenon referred

to as ‘bleisure’ travel. In one poll, 77% of millennials

anticipated extending a business trip into a leisure one

over a 12-month period, versus just 58% of Generation

X and 43% of baby boomer travelers. Moreover, 73%

of millennials rate leisure time on business travel as

important, more than any other generation. 20

12

“Zip lining in the rain forest of Costa Rica

is more memorable than sitting in a nice

beach chair with a pool bar that is offered

at every resort in the world from Mexico

to Tahiti.”

Enterprise Software Salesperson

Some niche hoteliers in the industry are offering

experiences that connect customers with a place and its

culture, starting with a strategy that doesn’t confine its

guests to the property. One such property is Mashpi Lodge

in Ecuador, which invites guests on a research outing in a

cloud forest reserve. Fogo Island Inn, located off the coast

of north Fogo Island, Canada, offers activities that include

geology hikes, rowing in a traditional wooden boat, outdoor

winter picnics, and ice fishing. While these are examples are

on the pricier end, airlines like Icelandair and KLM are also

getting into the mix, offering chaperoned city excursions

during longer layovers.

Although millennials are typically seeking different

experiences than other generations when they travel, it

does not mean airlines, hotels, and other travel brands

should cater experiences solely to millennials. In fact,

millennials increasingly travel alongside other generations,

such as parents or young children. 21 Offering daring

experiences that speak to the stereotypical adventure-

seeker is a good start, but the brands that set themselves

apart will be the ones that offer a variety of experiences

that also entice neighboring generations. Even providing

tools that help smooth trip logistics and coordination can go

a long way.

Other more traditional market leaders in hospitality are

starting to compete with Airbnb by introducing competitive

offerings for customers seeking to truly belong in the locale

they’re visiting. Marriott has partnered with the UK-based

home rental company Homemaker, while Hyatt invested in

the vacation rental company Oasis. Their entrance into the

growing home sharing market will offer the experiences

sought by millennials from a brand that’s already earned

their trust.

The consistency and familiarity across properties that was

sought by older generations will not attract adventure-

seeking millennials who value individuality and authenticity.

Forward-looking companies will offer experiences that are

special because they can’t be found anywhere else.

13

Closing

Travel and hospitality organizations can attract millennial

customers by studying their needs and meeting them, and

they can keep these customers by understanding their

expectations and exceeding them.

Specifically, millennial travelers long to reap significant

loyalty rewards that will enable their future travel

endeavors. They utilize and even depend on technology at

every touchpoint along the travel journey, from the first

marketing impression to the car ride home after a vacation.

They go where their friends and trusted influencers

offer positive reviews on social media, and look to make

connections once they arrive. And they want to truly

experience the places they visit, not just check out the most

popular tourist attractions.

The powerful millennial market has the annual buying

power of $200 billion now and will have $7 trillion in liquid

assets by 2020. 22 The organizations who strive to win

these loyal millennials today will be rewarded for a long

time to come.

Credera has partnered with many hospitality and travel

clients to help them deliver exceptional experiences. If you

are interested in exploring how we might be able to help

you, please reach out to us at findoutmore@credera.com.

14

Kevin Erickson

Kevin is a Vice President at Credera and leads the Management Consulting practice. He has

more than 15 years of management, operations, and technology consulting experience, working

with Fortune 500 and mid-market clients across numerous industries. Kevin received his BA in

Accounting & Business Administration from Taylor University and his MBA from The

University of Chicago Booth School of Business.

Brennan Bailey

Brennan is a Manager in Credera’s Management Consulting practice with 6 years of consulting

experience. Brennan has strong solution architecture and design skills, with a focus on software

implementations, strategic business processes and solutioning. Brennan graduated from Baylor

University’s Hankamer School of Business with a BBA in Entrepreneurship and Risk Management and

Insurance.

About the Authors

Christian Buechel

Christian Buechel is a Senior Consultant at Credera in the Management Consulting practice. His

areas of interest include business process improvement, market and competitive analysis, and product

strategy. He graduated from the University of Arkansas with a B.S.B.A. in Supply Chain Management

and Marketing, as well as an MBA.

Credera is a full-service management consulting, user experience design, and technology solutions firm.

We work with Fortune 500 companies, medium-sized businesses, government organizations and clients across a broad range

of industries, and we give them the experience and perspective to solve today’s toughest business and technology challenges. 

Founded in 1999, we currently have office locations in Dallas, Houston, and Denver.

F I R M H I G H L I G H T S

Credera possesses a unique combination of deep technical expertise with extensive business backgrounds. Our innovation,

analytics and owner’s mindset separates us from our competitors. Our rigorous recruiting and selection processes provide top

talent at every position – all modeling our core values of integrity, humility, professionalism and excellence.

15

Emily Dunn

Emily Dunn is a Senior Consultant at Credera in the Management Consulting practice.

Emily has served in the roles of Project Manager and Business Analyst with an emphasis on

business intelligence and analytics, product design and development, process documentation

and optimization, and requirements gathering. Emily received both her M.S. in Engineering

Management and B.S. in Mechanical Engineering, minor in Creative Computing, Cum Laude from

Southern Methodist University.

Ben Grotta

Ben is a Senior Consultant at Credera in the Management Consulting practice. During his time at

Credera, Ben has primarily served as a digital analyst, partnering with clients to create valuable,

personalized experiences across customer-facing channels. Ben holds a B.S. in Public Relations from

the Moody College of Communication at the University of Texas.

Daniel Hulse

Daniel Hulse is a Consultant in the Management Consulting practice at Credera. His project

experiences at Credera include strategic advisory, implementation road mapping, product

management, and program management in the staffing industry as well as the home services

industry. He graduated Summa Cum Laude from Texas A&M University with a B.B.A. in Business

Honors and Finance.

16

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