Connecting with locals seems to be the most valuable experience for the millennial who wants to see the world. The question is: How can hotels benefit from the rise of the sharing economy and the boom in peer-to-peer accommodations? Because where there is growth, there are opportunities to be seized.

Anna De Visser-Amundson and Jeroen Oskam, researchers from the hospitality business school Hotelschool The Hague, discussed this very topic with us at ITB Berlin last week: What is the millennial actually looking for and how can hotels adjust their value propositions to appeal to this generation?

We caught up with the two expert researchers to get more in-depth insights into how hoteliers can reach this significant audience. Here’s what we discovered:

Can you explain what peer-to-peer accommodations and the sharing economy are?

Anna: It basically comes down to local homeowners renting their place or a room in their home to travellers. Often this occurs through a two-sided platform where locals and travellers can find each other and decrease costs. Some examples are HomeAway, Airbnb, Coachsurfing, and Trampolinn.

Jeroen: The sharing economy refers to platforms through which people can share underutilised goods such as their spare room, their car, or even their power drill.

Some sources suggest that the RevPar of hotels is negatively affected in markets where peer-to-peer accommodations are rapidly increasing. What does your research tell us?

Jeroen: City residents of popular travel destinations all over Europe are adding their homes to these sites to benefit economically from the evident demand for local accommodations. London, for example, has seen a 120% increase in Airbnb listings, while the number of hotels has decreased by 6%. That’s a red flag for the hotel industry.

However, if you look at the statistics for Amsterdam, you see a different picture. The increase in peer-to-peer accommodations goes hand in hand with the number of hotels.

Anna: The question hoteliers should ask themselves is this: What is it that makes peer-to-peer accommodations so attractive? We often hear that millennials are just looking for a cheap stay. But it turns out that price is not this generations primary motivation behind their booking choice.

What does motivate them?

Jeroen: Research reveals five main motivations that compel travellers to book a stay through Airbnb:

  • Idealism
  • Price
  • Novelty
  • Community
  • Independence

 

Think about it – why are peer-to-peer accommodations so popular? Because the millennial doesn’t want to depend on and conform to the usual hotel breakfast hours. They simply want to have breakfast in their underwear at two in the afternoon in someone else’s living room.

Anna: In a recent study we conducted, we asked millennials to reflect on their experience as a guest and the emotions they felt. We identified six feelings that made them happy with their stay: when the guest felt relaxed, joyful, satisfied, energised, amused, and when they felt a kindness towards them.

Satisfaction could for example mean they got value for their money, but also that, overall, the stay met their needs. The results surprised us, since relaxation and joy were picked far more often than satisfaction.

So millennials are looking to relax, is that it?

Anna: Millennials are not all the same, of course. We created personas based on different personality types a hotel could possibly focus on.

“The Achiever” wants to be the best in everything – in sports, at work, at home. It’s all about results. But that also means they have a great need for relaxation. Things like wellness, yoga, and mindfulness are very important to them, as are conveniences that reduce hassles and let them relax and just enjoy themselves.

“The Stampeder” is the leader in their group of friends. When looking back at the day this millennial wants to feel energised, and they want to show off.

How can independent hoteliers use this information to attract millennials to their hotel?

Anna: If you know what emotion the guest is looking for, you can focus your marketing angle to resonate with them. Pick a persona and build an experience around it.

The Stampeder would want to show off how they contributed to saving the world by staying in a hotel that’s looking after the environment and its inhabitants in a novel way. They’d also want to share pictures with friends of the hip design of the hotel. The Achiever, on the other hand, might want to enjoy a yoga session, and would appreciate the convenience of not having to find local hotspots in the city on their own.

Which hotels have already adapted their value proposition to the millennial?

Anna: The W hotel chain now offers a “social media wedding concierge” service, for example – a typical way for the stampeder to show off. “Accor Local” is a pilot programme Accor hotels are running to attract more locals to their premises. Participants are able to pick up their dry-cleaning at the hotel after hours, fostering the sense of community that is the hallmark of the peer-to-peer accommodation experience.

So hotels should open up their doors for locals too?

Anna: Yes, because its no longer sustainable for hotels to have 80% of their revenue coming from sleeping guests as the alternative-accommodation market continues to grow. Make lobbies a welcoming and fun place for non-guests to hang out in. The line then between out-of-town guests and locals is naturally blurred, and instead of being an intrusion, these locals become an important dimension in the overall guest experience. This resonates very well with millennials.

Any tips on how the hotel can share their new value proposition on metasearch?

Anna: Experiences are made through storytelling. Look at your hotel through the eyes of your guests when taking pictures and writing descriptions for your online hotel profile.

  • I often see what I call “bomb shot pictures,” as if somebody dropped a bomb and suddenly the hotel is completely empty. A picture of a nicely made bed – how is that going to submerge me in a feeling of relaxation?
  • Bring descriptions to life. So you have 1000-thread-count Egyptian cotton bed sheets, but what does that mean for the guest? How does it make them feel?
  • Make your online hotel information personal. Millennials know everything is photoshopped and look for authenticity. Describe what type of person the hotel manager is, for example. These guests sympathise with individuals who reveal who they are, especially online.

 

Remember that millennials aren’t the only travellers looking for an emotional aspect in their stay; guests belonging to other generations display the same booking behavior. Families and baby boomers are also looking for experiences, although they might be slightly different from those millennials seek out. Still, building on emotions is a necessity for every hotel to acquire a strong position in the market.

 

Researcher Anna De Visser - Amundson hospitality business school Hotelschool The Hague

Anna De Visser-Amundson has worked internationally in management positions for independent design hotels as well as multinational hotel companies such as Four Seasons. Anna joined Hotelschool The Hague in March 2008 where she is a Senior Lecturer and Research Fellow in Marketing. She specialises in hotel marketing, customer experiences, guest heterogeneity, and customization in the hotel industry.

 

 

 

 

Researcher Jeroen A. Oskam hospitality business school Hotelschool The Hague

Jeroen Oskam is the Director of the Research Centre at Hotelschool The Hague, which focuses on hospitable behaviour and its business consequences as well as on future developments in the hospitality industry. Jeroen’s own research pertains to the latter area, with recent scenario studies on topics as Airbnb and OTAs.

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Fee Naaijkens

Fee strongly believes that hoteliers can determine their own success online, no matter how big or small their business is. With several years of international experience as a content specialist and PR professional, Fee has trained and helped many entrepreneurs in the past, profiling their businesses on various online marketing channels successfully. As the Industry Manager for the Netherlands and Belgium, Fee is now dedicated to provide marketing insights to independent hoteliers located in these markets.

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