Every industry conference I attend features a discussion of millennials. Travel companies and payment providers are trying to figure out how to appeal to this generation. Their fears are being stoked by consultants selling an array of ‘solutions’.
It’s a long-term problem rather than a near-term one, since relatively speaking millennials don’t spend money yet.
Copyright:stockbroker / 123RF Stock Photo
On average young people travel less expensively than older people. They don’t have the resources yet to travel more comfortably, their health is better, and they haven’t experienced premium travel so don’t have better experiences to compare it to. But today’s millenials aren’t any different than baby boomers in this regard.
Take the belief once expressed by Marriott that millenials don’t want desks in their rooms, they want tiny rooms and communal spaces in the lobby where they can be sold food and beverage. That’s an excuse or justification for building hotels with a lower cost per key.
Similarly the notion that millenials want dense airline seating and more fees, as long as it’s presented with a cheap yet modern aesthetic, is silly. But that seems to be where British Airways Level and Air France’s Joon are going.
Cranky Flier summed up Joon well,
When I hear the words “millenials,” “connected,” “international,” and “electric” used in the same press release, I start to feel ill. And those are just a few of the words Air France slung together in its press release announcing that its new (not) low cost airline would be called Joon. …Air France appears to have just given up and told a group of clueless consultants to do whatever they wanted. The end result is an airline with a highly questionable business plan… but one with a “punchy” name.
…[Joon] feels like a gimmicky branding exercise that also happens to have an airline attached. The whole “profitable airline” thing may show up later, if all those spreadsheets are correct. But they aren’t correct. And this won’t work. It’s just another wasted exercise that distracts from the real problems that Air France can avoid having to face for a little while longer by pretending to have a valid strategy.
Now stop and think about what Willie Walsh, chairman of the parent company which owns Level along with British Airways, Iberia, Aer Lingus, and Vueling, says about Level’s customers.
Walsh: typical Level customer base doesn't need loyalty programme but there's opportunity for other IAG airline members to redeem on Level
— Will Horton (@winglets747) September 24, 2017
None of us need a frequent flyer program, that’s not an ‘extra’ provided to customers. It’s a tool designed to encourage customers to choose your product over others, and a mechanism for permission-based marketing to those customers (and tracking and pushing behavior through data analytics). But just like millenmials don’t need desks, or seats (why not let them stand?) they can do without frequent flyer programs. After all they have experience with the austerity of the Great Recession behind them!
Millennials, see, don’t need anything as long as there’s a cool vibe.
Walsh jokes can't wear Level t-shirts anymore: middle-aged men in t-shirts, it's not what you want to convey (to millennials) #WorldRoutes
— Will Horton (@winglets747) September 24, 2017
But if you’re taking advice on cool from late 50s white males, you’re doing it wrong.
People looking for the best deal will fly Level or June when it goes where customers want to fly and it’s the cheapest. They’ll stay at Moxy when they want to give up room size for cost savings and the location is right.
This has nothing to do with generations and how hip Willie Walsh can teach his middle managers to become.
Millennials aren’t that different from other generations. They want to go to Hawaii. They may not buy as many souvenirs but spend more on experiences while they’re away. However where millennials really diverge from other generations is that they are less trusting of institutions. So patronizing millennials by forced attempts at authenticity is self-defeating.
@Gary Leff – I have had many premium cabin travel experiences on EY, EK, UL, BA etc. and I am only 14. I have come to expect Michelin starred cuisine and caviar from AF lapremiere and even if I am too young to have krug I want to have it as an option in the future.
I have to disagree on one point: Millennials are very different from previous generations.
I really don’t understand why people seem to think that Millenials are all that different. Yes they have different tastes than older generations, but then the older generations had different tastes from their parents. Yes, they have different economic circumstances – obviously they are much cash-poorer but they also tend to be relatively rich in experiences compared to other generations at the same age. And they adopt technology much more quickly, particularly when it is more convenient, and are much more trusting of technology and less trusting of corporations.
And, certainly, because of these differences, their priorities are different – but none of that means that an airline, or any other company, has to be different – it’s just it cannot be wildly old-fashioned. Whilst most of us prefer the decor on board Virgin America to that on board United, for example, Millenials would strongly prefer it. But all United needs to do to address this shortcoming is, when they re-do their planes, to employ people who live in the current century. And the same argument can be made for pretty well the whole experience – whether it’s United’s highly processed food, stale decor, rigidity in dealing with customers, out-dated technology etc. It won’t stop Millenials flying on United when the ticket is a better value, but they’ll dislike it more than an older generation. And, incidentally, it’s not just United – it’s the whole lot of them.
I’ve recently taken to flying on Ryanair for a route I frequent – the competition is FR, BA or EI. They all get you there (probably FR is the most reliable of the lot, but the others are ok). EI is friendlier, FR just seems efficient whereas BA seems completely out-dated. I’m the parent of a millenial but I know my children would feel even more strongly that such was the pecking order.
Well put Gary. I probably fall into the Mellenial crowd and would pretty much agree with all that was said (I happen to like a desk in the room. Where the heck am I supposed to set up my computer otherwise?).
I also don’t think Mellenial’s as a generation are all that different. Sure, they know how to use electronic devices, phones, computers better than older generations and may take a more world view to things on the whole, but I don’t really think they are all that different otherwise.
I agree. Saying Millennials don’t need a loyalty program is like saying they don’t like getting Stars at Starbucks.
My personal theory is that the same morons that have sold fortunate 500 companies on open concept low wall offices are the same one telling us that all people under a certain age want to hang out in the hotel lobby and don’t need a large room. Worse yet they will prove themselves right when they point to all the people hanging out in the lobby of hotels when in fact they are hanging out in the lobby because the rooms have no desk and are tiny.
@gary
You are 100 pct correct on marriott
I am currently at Aloft hotel in Montevideo, brand new opened a month ago
Caters to millenials but I suspect even millenials will find it unbearable
Bare bones room, no furniture, extremely loud music in the lobby, user unfriemdly breakfast, no place to have a chat in the lobby….cheap blinds in the room….all sone as an attempt to look “hip” and like you say, save money
They made a hotel that caters to what some idiot consultant told them a generation likes while making it unpleasant to any other demographic and probably to most of the targeted demographic as well….
Hotels think that they have it all figured out simply bynusing the words “social”, “connect” and other catch words they think are cool….
It’s a sad attempt at being user friendly
The hotel ( and probably the entire Aloft brand) is a glorified youh hostel
Using the gimmicky term “Millennials” is patronizing and generalizing at best, stereotyping at worst.
Agreed, cocky and entitled generation that expects to be rewarded for just showing up!!!
Gary I’m going to guess legitimate thought leaders-specifically HBS and Sloan educated BCG partners and principals-know more than a credit card churning blogger:
https://www.bcg.com/documents/file129974.pdf
And they also have more access to key influencers and decision makers than you.
שנה טובה
Really, there are two concepts when you are talking about grouping people by age: generations and cohorts. Most know what a generation is and to what generation they belong — whether it be a Boomer, an X, a Millennial or a Next. Cohorts are different. They’re age groupings — people in their teens, twenties, thirties, etc. Their cohort will change as they age, but the generation won’t.
This matters because much of what people characterize as generational differences, aren’t. They’re differences and preferences based on age. A person in the Millennial generation might not order room service in a hotel. Gary points out many examples above regarding things that Millennials allegedly desire that have more to do with how old they are rather than what generation they are in.
Millennials are not all that different in many ways from previous generations. All generations think they’re different. Previous generations were also tagged as being different too by their parents’ generations. Read what was said about the boomers and genX and substitute Millennial in there and you won’t see much difference. What makes it a bit different is that Millennials are a large generation — especially in comparison to GenX — whose cohort and generational preferences could be ignored by marketers.
This is a long way of saying that Gary seems correct here to me.
@Josh G – you’re going to guess incorrectly or else we wouldn’t have the bad joke that is Joon, in any case that document doesn’t refute what I’m saying that you aren’t going to fool millenials with branding they’re still going to buy on schedule and price, and in fact the skepticism of millennials makes it harder for big companies to feign authenticity.
if your argument ‘the consulting firms are smarter than gary’ were valid then all those low cost airlines within an airline that mckinsey advocated would still be flying (eg ted, song, metrojet). oh and united wouldn’t be admitting to losing $100 million on basic economy already.
This generation is no different from any other. They want things yet don’t have the resources to get them. They’ll travel however they can afford. Once they have resources they’ll use those to travel how they really want to. And honestly, that’s how any of us travel. We fly coach unless we are able/willing to shell out for premium cabins (or we leverage our CC spend to use points to do it). We choose the cheaper hotel to save money. And Millenials are the same way.
I think air travel, like most products, is chosen more by economic factors that generational factors. The number one factor in air travel is cost. If Joon can offer a comparable price while offering amenities the 18 to 35 yr old crowd prefer…then they will probably capture a bit more of that market share. But if they go the route of UA when they rolled out BE and think their customers are f’n morons and will happily pay more for less then I think Joon will be like Ted and fail.
I also think it is a bit foolish to focus the marketing of the entire airline to the much poorer 18 to 35 yr demographic. There are many products that works….but I don’t think air travel will be one of them.
@JoshG – that BCG piece was co-written by Julia Haywood, who bombed out at United. While she’s smart, the stories i’ve heard about some of the things she said in meetings at United (I have plenty of friends and former colleagues who work there/ worked with her there) belie somebody who knows very little practical about the industry. I wouldnt completely believe everything they say. Gary does make some good points here, so I’ll give him that. I cringed when I saw the Joon thing. I do, however, think the concept of Level could be good. Just make sure it’s targeted at markets that can be stimulated with low fares. Low unit cost planes in high volume markets can work, and BCN is a great market for that. People will fly Level to BCN because they want to go to BCN and it’s a nonstop flight. They wont fly it because it looks cool.
@josh g
welcome back, although nobody missed your stupid comments which their sole intention is to insult gary and call him a bad jew wether he is right or wrong…
In this case Gary is 100 pct correct and if you think big research firms with no accountability and no P&L interest in theri clients accounts then I have a bridge in tel aviv to sell you
shana tova to you, never too late to become a mentsch although it seems you are a lost cause
The concept of millennials has turned into a bad cliche. The complaints about that generation are exaggerated and, to your point, their wants/needs are also exaggerated (or just completely off-base).
I really don’t understand why these companies talk to consultants and leave the decisions to middle aged executives when they are trying to speak to a cohort (that was a very important distinction that doesn’t seem to resonate very well, maybe because it doesn’t have a sexy name like millenials) that is nowhere close to their own. When the company I lead looked at marketing to college age students, we were all in our 40s or 50s. I knew that we would not have the slightest idea how to market to them, so we hired a college student to lead the project. One of the most important questions on our interview list was what their favorite band was. I told my 50 something marketing manager that if they answered with a band we had ever heard of, that they weren’t right for the job. When we hired them, we gave them a budget and some broad restrictions and let them go to town. In one year, they raised our visibility on campus more than we had in a decade.
@doug – I stayed in an Aloft in Chicago and found it to be really nice overall, yet one specific feature sticks out to me – the shower. The shower was all glass(?) pane and pretty, but when it came to closing the door there was about a 6-inch gap between the door and the mounted pane. The door stayed put, but my wife and I both soaked the floor because of this and were laughing about how ineffective this fancy shower was. Now that you mention it, the lobby was similar – very dark and loud music. Great staff, comfortable bed, nice view, but I’m glad I paid in points and not cash.
In relation to the original article, why would I pay $$$$ to stay at a “hip” hotel if I want the atmosphere of a hostel?
Sorry Josh G, as a former management consultant, I can tell you that consulting firms will selectively present data to push their agenda which is to sell projects. Recommendations to clients do not always align with the clients’ best interest, but rather to sell additional project work. Consultants will tell clients what they want to hear. You’d be a שמאָק if you believed otherwise.
Assuming Millennials are so talkative and social, why are airlines trending toward no assigned seating? Cost conscious travellers will be travelling in pairs or more and as the OCD tendency kicks in, assigned seating with their group will be a requirement, not random seating next to a John Candy double for even a ten minute flight is acceptable.
And about technology, the consultant s are right. Millennials do understand technology and they know that algorithms can assign seats so that everyone, not just rich people, can be provided seats with their travel companions. With 8th generation Intel processors commonplace, it would take about 5 seconds for the computer to optimally reassign every single seat even if the aircraft model, with a completely different seat chart, was substituted after everyone was assigned a seat on the original boarding pass and aircraft.
In other words, basic economy on a legacy carrier, DL AA or UA, is viewed as Draconian type profiteering since customers, Millennials, can see the steep surcharge for providing no additional service, on a two hour flight. So, SWA with free luggage and cheap priority boarding, gets a good cross section of the customers: Mils, genX, Boomers, business, Sr’s, etc, while legacy deals with the leftovers. Mil’s just happen to be the largest group with the most disposable money.
Seeing 2 of these Millennials in action I have found they do not know how to communicate with others unless they have a cellphone in their hands. both of these can never talk to complete strangers even in a social situation.
I have met the M’s who forget that you need to keep your car register, pay excise taxes and renew your driver’s license (unless Daddy or Mommy does it for them they are LOST).
A friend mine’s daughter flew to Russia to meet a guy (yeah Dumb) and when she flew back home she had no money to get back from JFK to her home in South Eastern Mass …. Mommie sent a limo to JFK to pick her up (6 hrs round trip)
These M’s think you can just show up at 145pm for a 2pm flight with a carryon bag.
The world evolves around them and until they get slapped in the face a few times, or left at PHL with a 22 hr layover they will never learn anything.