Marriott keeps eyes on millennials
As Marriott looks to bulk up its portfolio during the next three years, the company aims to best serve the needs of younger travelers who will continue to make up a bigger piece of the workforce.
As Marriott International plunges into the biggest hotel development push in the company’s history, it is doing so with a close eye on the Generation X and millennial traveler.
Marriott officials said Monday during an investor day meeting that the tens of thousands of rooms that will be added to its system during the next three years will be designed with younger travelers in mind.
Stephanie Linnartz, executive VP and chief marketing and commercial officer, said people who are of Generation X age and younger comprise 70% of the working population and will represent 87% of the workforce by 2024. That growing demographic underscores the importance of ensuring the rooms and hotels added to the portfolio suit the needs of these guests.
For instance, these travelers do not want heavy furniture or abundant closet space in guestrooms. Plenty of electrical outlets also will be on hand to accommodate mobile devices.
“They have been shaped by technology and in part by how the Internet has changed how we all work and live,” Linnartz said, referring to what she calls the “Apple generation.”
Speaking of mobile, Linnartz said the company understands these guests are social media aficionados. She pointed to Marriott’s “Plus Points” program that grants Marriott Rewards points for using certain hashtags on social media. The company also over the summer ran its “Flash Perks” program that allows loyalty members to cash in their points for merchandise, hotel stays and experiences.
Marriott is trying to interact on the millennials’ terms, Linnartz said. “Generation Y wants instant gratification,” she said. “For Generation Y, if it’s not on Facebook, it didn’t happen.”
In another nod to younger travelers, Linnartz said 4,000 Marriott hotels are scheduled to introduce mobile check-in and check-out capabilities by year end. She said 70% of Generation X and millennial travelers have indicated they want this service.
Hilton Worldwide Holdings’ President and CEO Chris Nassetta said earlier this year it could be a mistake to focus marketing efforts solely on millennials. Instead, brands need to focus on a wide range of customers.
“Hampton has to appeal to a wide range,” Nassetta said during the Hunter Hotel Investment Conference in March. “They all have to. I think it’s misguided to think there is a silver bullet and there is a millennial brand that will solve any of a company’s problems.”
During an exclusive interview with Hotel News Now on Monday, Tony Capuano, executive VP and global chief development officer, said Marriott is not designing brands based on a customer’s age.
“The shift is not just age-related,” he said. “The millennial traveler is not just defined by age but by a desire for authentic experiences.”
Linnartz said the company also is looking to continue to serve the needs of other guests in addition to millennials and Generation X.
Might these millennial travelers have new Marriott brands from which to choose? The company has 18 brands under its umbrella today, though the company’s forecast for 2017 listed “18+” brands.
President and CEO Arne Sorenson said the company’s forecast through 2017 did not assume any additional brands. “Only time will tell,” he said in an interview with HNN during the meeting.
Sorenson did say that one of the things he is most proud of is that of the rooms in Marriott’s system, 20% to 25% are from brands that weren’t Marriott brands in 2007, such as AC Hotels.
Marriott has one brand in what it terms its “budget” segment with its Moxy brand, which has one hotel open in Milan and an additional 15 in the pipeline. Marriott has intentionally limited its exposure to that segment.
“It’s a little like milking mice,” Sorenson told HNN. “The fees per hotel, if you don’t own the hotel, just aren’t very interesting.”
An analyst also brought up the subject of a potential brand addition during a question-and-answer session with executives. Linnartz said companies should look to add brands if it means reaching a new customer segment or breaking into a new territory, such as Marriott did with its acquisition of Protea Hotel Group in Africa.
“I don’t think there’s an exact right answer for the right number of brands,” Linnartz said.