Goodbye, Millennials: Hello, Generation Z

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For the past eight years, all eyes have been on Millennials. The year President Obama was first elected The Huffington Post wrote this of Gen X, “The 2008 election not only marked the election of America’s first African-American president, it also saw the strong and clear political emergence of a new, large and dynamic generation.” Since that time, we’ve watched them grow up, turn everything on its head that Baby Boomers worked so hard to create and have researched their habits in order to cater to their wants and needs.

But times are changing and a new force is coming of age who’ll soon be entering the marketplace and have their own purchasing power: Generation Z. According to Zacks, an independent research company, “Gen Z has already started to impact the market significantly ($44 billion annual purchasing power just with their pocket money).”

Born between the mid- to late-1990s and 2010, the oldest of the party are now graduating college. Although it seems early, travel industry professionals should already be looking at what this will mean for the coming years. Traditionally brands have tried to lock in loyalty with guests at a young age, targeting teens early on. Yet, as Adjunct Professor of Marketing at Wharton Keith Niedermeier pointed out the school’s website, “the conventional wisdom now is that Generation Z is fickle, harder to reach and harder to lock in. As a result, there seems to be a lot of inaction inertia on the part of companies.” If companies continue down that path, they’ll run the risk of being late to the game and losing out on this new breed of travelers.

generation z

Millennials have been described as narcissistic, technology-driven while still craving human interaction, group oriented and entitled. They are also more eager for experiential travel than their ancestors. Gen Z, on the other hand, is ambitious, individualized, practical and place importance on value.

“If Hannah Horvath from Girls is the typical millennial—self-involved, dependent, flailing financially in the real world as her expectations of a dream job and life collide with reality—then Alex Dunphy from Modern Family represents the Gen Z antidote,” Lucie Green, Worldwide Director of the Innovation Group at J. Walter told The New York Times. “Alex is a true Gen Z: conscientious, hard-working, somewhat anxious and mindful of the future.”

Although young, the faces of this generation are already making waves with their purchasing power. Not only that, but for them, traveling isn’t a luxury, it’s expected and essential to make their life feel complete. Taking a look at this emerging generation, we spoke with experts and analysts to get an idea of what we can expect from the new power players and how they will change the way we look at and interact with the world.

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The Measure of Value

As children of Millennials, Gen Z has seen their parents go through the early 2000’s economic recession and have learned the importance of wise spending. Because of this, they are more concerned with what they can get with their money versus how they can spend it. If we look at how this relates to traveling, it’ll mean there will be more of an emphasis on value (how will this positively impact my life?) and before investing in an experience will research it from top to bottom online to get the best, all-encompassing deal. Nothing is left to chance.

“We’re already training travelers to expect free breakfast, free amenities, free Wi-Fi-, free parking, etc.,” said Crystal Pernici, Vice President of Market Strategy at GreenPoint Hospitality. We’ve already seen this transition with Millennials, but for Gen Z, if it’s not included, they’ll look elsewhere.  

In terms of guestrooms, they won’t be impressed by the usual lavish furnishings and brand-named amenities. “They don't need large rooms, and so prefer a basic place to sleep after long days of site-seeing and exploring. These travelers don't mind a small bedroom, as long as the space is stylish and chic,” explained Dr. Kurt Stahura Dean of Niagara University and Dr. William Frye, Associate Professor at Niagara University’s College of Hospitality and Tourism Management. Growing up in the sharing economy also means they will place more value on a hotel where connections with other travelers can easily be made.

“Many hotels are also offering social activities for those in specific communities, like LGBTQ. Because these travelers remain outside their rooms, for the most part, in-room amenities like mini-bars, ironing boards and in-room movies are less necessary. Also less important are gift shops and bell service. They'd prefer a refrigerator to room service,” said Doctors Stahura and Frye.

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Personal Brands & Social Media

More than their parents, this generation has grown up learning how to create and nurture their own personal brand online. They’re social media presence is at the forefront of their decision-making choices, and they will not settle for inauthenticity. “They want the truth in order to be influenced. They’re interested in real people, real feedback, and real places they can see themselves and connect with,” said Pernici (GreenPoint). Gen Z will be won over by brand advocates giving their unpaid opinions, which means brands will need to build a loyal and honest following in order to attract this generation.

Whereas Millennials were the beta testers of technology, Gen Z has the internet in their pockets. They want fast, efficient and useful information in a matter of seconds. Anything less just won’t do. It’s high time the industry and hotels in general put more time and effort into their social outlets. Unfortunately, hotels have yet to figure the best way to market to this generation successfully. “The hotel industry generally comes to any technology party way, way later than most other industries,” shared Nikhil Nath, CEO of Knowcross. “Those guys are still a bit lost on how really to leverage social media.”

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Global Awareness: The New Experiential Travel

A buzz phrase within the industry, “experiential travel” has become synonymous with Millennial vacations. Extremely altruistic and considered the ones who are “out to save the world,” Gen Z considers bettering their environment a top priority. “These social activists see the problem, clearly understand the consequences of not taking action and aren’t afraid to be part of the solution rather than waiting for the next generation to fix it,” said Marc Ellis, Thanks Again CEO.

It’ll no longer be about what they can get out of their trip but how they can leave a lasting mark that benefits the world at large. “We can directionally assume that impact-travel, voluntourism and other travel experiences that combine tourism with volunteer opportunities will be a major point of differentiation for brands in the travel space,” shared Leah Swartz, Senior Content Specialist at FutureCast.

This will also show up in their expectations of hotels. Sustainability and eco-friendly practices will dictate their choice of accommodation. Where it once was considered luxury to have your sheets and towels changed daily, Gen Z will look to hotels that are making it easier to save water, preserve energy and have a minimal impact on their location. “By the time the Gen Z population reaches its peak, there will be NO tolerance for paper invoices and waste, standard light bulbs, or paper newspapers. Cost effective green solutions, responsible choices, and options will become the standard,” said Pernici (GreenPoint).

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Be Early Adopters

Sure, we’re still at the very beginning days of understanding this sect, but recognizing their expectations now is essential to knowing how to cater to them in the coming years. While these are only a handful of their major values, you can already tell what we know of travel will look completely different in just a few years. If idealism and entitlement ruled the past eight years, realism and doing good will carry us into the future. And their stories will live on social media for others to read and make decisions around, so connecting now is key.

Nicolle Monico

Nicolle is an award-winning writer and Travel Editor using her expertise in the industry to write about luxury travel around the world. You can find her daily searching the web for the latest trends, best new hotels and most beautiful destinations to visit and share with her readers. She's been featured on The Huffington Post, Hard Assets, AMD Entertainment and Remy Martin. In 2014, she was vo...(Read More)

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