Gen Z & Millennials Spend Big For Superior Service, But You Need Tech to Tap In
Recently this phrase had a viral moment as an epithet younger generations use against the older generations that ‘just don’t get it.’ And while there are no shortage of intergenerational differences that we all need to account for in today’s society, there’s a lesson for brands here as well. It’s more important than ever to account for the distinct needs, behaviors and expectations of Gen Z & millennials.
Zingle’s recent 2019 Guest Service Report sheds light on these distinctions as they relate to service and guest experience. In sum, a research survey of more than 1,100 consumers found that while Gen Z & millennials may have high expectations and demands when it comes to the guest experience, they’re also the most likely to reward the hospitality brands that meet their expectations.
In fact, 1-in-5 say they are willing to spend $50 or more for a hotel with superior service than its nearby competitors. That’s more than any other generation and double the amount of boomers who report the same. Even further, 93% of millennials say they would at least consider staying with a hotel again if it turned a poor experience into a positive one, and an additional 36% admit that they feel more emotionally connected to a brand when they solve a customer service problem.
However, while this may be great news for hotel operators and their service teams, meeting the guest experience and service expectations of Gen Z & millennials in a way that’s going to impact your bottom and drive loyalty isn’t as simple as you might think. It requires an understanding of the barriers that exist and how leveraging the right technology can remove them and allow hospitality brands to take advantage of this largely untapped opportunity. Let’s dive in.
Millennials & Gen Z Share Experiences on Everything, Except Service
It’s common knowledge that when it comes to the guest experience, operators don't always have a full picture. In fact, it turns out that only 25% of hotel guests say they will report any issue that impacts their stay. When providing remarkable service hinges on your ability to get feedback in order to know where issues and gaps lie, this is a major problem.
But when you look at the data by generation, it appears that the younger generations are the most likely to let issues slip through the cracks. Just 17% of Gen Z and 18% of millennial hotel guests say they report any issue that impacts their overall guest experience -- half the percentage of Baby Boomers (ages 56-75) who say the same.
Interestingly, these generations are also reluctant to share one of the most important tools to keep tabs on their service and drive business: online reviews. Reviews provide valuable insight into the good and the bad, and they also have a direct impact on what matters the most -- the bottom line. In fact, A Harvard study found that for every one star increase in a Yelp rating, businesses enjoy a 5 to 9% increase in revenue.
However, just 1-in-5 Gen Z and millennials say they’d share a review online if their guest experience “meets their expectations.” And with 60% of this younger cohort saying that online reviews have a “great” impact on their purchase decisions, it’s more crucial than ever for those in hospitality to go above and beyond in order to drive loyalty amongst these groups and turn them into advocates online.
Understanding Where The Barriers Lie
By now you may be thinking to yourself, “Great ... Gen Z & millennials & are the biggest spenders when it comes to superior service, but if they have an innate hesitancy to report issues, how am I supposed to tap into their influence and pocket book?” Fear not! Understanding why Gen Z & millennials aren’t reporting the issues that arise yields solutions that any savvy organization can deploy in a way that allows them to harness the power of these travel obsessed and technologically inclined generations.
Nearly 1-in-3 Gen Z & millennials say that the main reason they don’t share service issues is because they don’t like confrontation. This was followed by “Because businesses make mistakes too” (27%) and “Not an easy or quick way to do so” (22%). Notably, “Not an easy or quick way to do so” was the most common answer across all generations.
Given Gen Z & millennials’ preference for digital and mobile over face-to-face communication, it’s not surprising to see that two of the main barriers preventing this cohort from reporting issues are because they don’t feel empowered with solutions that fit their needs.
Providing Technology Solutions That Remove Friction
Predictably, Gen Z & millennials were far more likely (58% & 57% respectively) to say that if given the option, they would prefer to report issues over text or via messaging applications versus reporting over them via phone or in person.
So while the fact that the younger generations are letting issues slip through the cracks more than other generations might be alarming, for operators that can eliminate this friction by providing digital solutions that cater to their mobile and digital preferences, there’s hope.
At its core, ‘OK boomer’ isn’t a dismissive phrase meant to insult older generations. Rather, it’s an imploration for understanding. Understanding that, as each generation does, our younger generations have unique views, preferences and expectations that shouldn’t be ignored. And in the case of travel and hospitality, the brands that weave this understanding into their business model will be able to build successful businesses for years to come.