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| 24 April, 2018

Why millennial travellers value experiences over luxury

Millennials today are looking for authenticity, experiences and a value-for-money proposition

Hospitality experts at the Arabian Travel Market (ATM 2018) have identified several new trends in the market today, including a growth in the mid-market segment and the use of technology to create seamless experiences.

Speaking to Khaleej Times, Pascal Gauvin, managing director, India, Middle East & Africa at InterContinental Hotels Group (IHG), said: "The trend that we already anticipated for some years now is the growth of mid-market brands. As traditionally luxurious markets such as Dubai become popular, there is a growing demand in the mid-market segment. We see this in the UAE and in the rest of the GCC."

Gauvin noted that millennials are driving growth in the mid-market segment. "Boutique hotels are becoming popular, especially with millennials. Luxury hotels still remain popular, but we have seen a rise in demand across other segments. The demand from millennials is one of the drivers of growth in the mid-market segment; but, that is not all; family travel is also increasing and that is another factor that we have to take into consideration. As the Expo 2020 draws closer, it is important for operators to target different segments across the industry."

He also noted that to cater to the growing demand for mid-market offerings, IHG would be increasing the number of its Holiday Inn and Holiday Inn Express offerings across the region.

Like Gauvin, Olivier Harnisch, CEO of Emaar Hospitality Group, said there is a lot happening in the UAE's hospitality sector right now.

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"The landscape has changed, and over the last few years, we have seen a dramatic shift in guest expectations and the way people approach hospitality, hotel stays and bookings. This shift is being driven by millennials," he said.

"However, while it might be easy to say that millennials are a certain age group with specific needs, you have to understand that part of their mindset is present in various other demographics as well," he added. "This is something that we, as actors in the hospitality industry, have to understand. Millennials today are looking for authenticity, experiences and a value-for-money proposition. This is shown in the rise in popularity of mid-scale hotels. The millennial mindset has an affinity towards more simplicity."

However, he revealed that the demographic's preference for a cheaper hotel stay is not because they have less money to spend, but because they prefer to save their money on a hotel stay and then spend it on outside experiences. This might include going to beach adventures, museums, a concert or checking out some of the restaurants.

"Very often, millennials choose to spend more money on entertainment. We have also seen that they spend very little time in their room, and that they prefer to go out and explore the city they are staying in. They also tend to look for hotels that are firmly anchored in their environment, and for cost-free simple service," he said.

Issam Kazim, CEO of Dubai's Corporation for Tourism and Commerce Marketing (DCTCM), also spoke about the importance of properly identifying new trends in the market.

"The need right now is for us to go after the markets that we are the most confident about. In addition, we also need to focus on different segments and factor in how they wish to travel. For example, millennials are a diverse group that are all about experiences," he said.

"Millennials bring with them a different type of need; and their needs can change, sometimes even on a monthly basis. For us, it is important to understand and identify those ever-changing needs so that we are well-equipped to meet them."

Kazim explained that a large number of millennial travellers are interested in exploring the natural side of the UAE. They might be interested in going out and visiting locations such as the desert, the mountain ranges or the wadis.

"It is important for us to highlight such locations and the services available for them to visit," he said. "We have also noted that people are getting more comfortable with personalised experiences. There is no one-size-fits-all approach anymore; you need to personally curate experiences. And this is where technology plays a vital role."

Harnisch was also quick to point out that technology is today acting as an enabler. "Technology is great because it allows users to simplify hotel stays, remove friction points and provide seamless experiences. We are looking to bring in more technology into our hotel rooms to improve guest experiences."

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