Analysis
GENERATION GAME
Suppliers are making changes to target a new breed of business traveller, says David Churchill
WHEN NEW YORK’S BIGGEST HOTEL announced last summer it was abandoning its traditional food and beverage (F&B) room service, the news generated much comment from business travellers, most of it adverse. But the 1,980-room New York Hilton Midtown has not only remained firm about the decision, but Hilton is also now planning to roll out the strategy elsewhere. “We are definitely going to do it at other places,” said CEO Christopher Nassetta, speaking at Hilton’s recent US$2.4 billion stock market initial public offering on Wall Street. Yet while the Hilton strategy may
seem odd to many of its business guests who have, for years, embraced in-room drinking- and dining-on-demand, the move is a little more nuanced than the publicity suggests. Instead of a traditional round-the-clock food delivery service prepared by a separate kitchen, the hotel has opened a new ‘concept restaurant’ called Herb N’ Kitchen – a casual ‘grab and go’ eaterie offering guests “artisanal sandwiches and brick oven pizzas” to eat-in or takeaway to their rooms. But for a fee of $15 (plus 15 per cent gratuity) guests can still get the food delivered to their room during breakfast hours and in the early evening if they prefer. So it really is a sort of ‘room-service lite’ rather any abandonment of the concept altogether, with Nassetta explaining that the move has “proved popular with younger guests” who wanted more casual dining and faster delivery. This, in fact, is key to the whole
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reasoning for Hilton’s F&B revamp, highlighting the increasing influence of the market segment popularly known as Millennials, or Generation Y (see Rise of the ‘always on’ generation, p28). This is the generation born roughly between when Margaret Thatcher came to power in 1979 and the start of Tony Blair’s premiership in 1997 – those approaching their 20s and into their mid-30s.
Millennial travellers, in fact, actually quite like room service: surveys (such as Expedia/Egencia’s recent comprehensive The Future of Travel report) suggest that many see it as a sort of ‘compensation’ when staying in a hotel on business. But there is more to the Millennials’ influence than simply revamping room service. As Expedia CEO Dara Khosrowshahi highlighted in his keynote address at last month’s Business Travel Show in London (see The Interview, p38), the Millennial generation is having – and will continue to have – a “huge effect” on corporate and leisure travel.
‘Y’s AND WHEREFORES Millennials are generally both tech-savvy and tech-dependent – consumers whose tablet/smartphone approach to booking and optimising travel is forcing hotels, in particular, to reshape their future strategies. The major chains are engaging in a race to develop new brands appealing specifically to this demographic, although with subtly different focuses. Surveys have revealed, for example,
that Millennial travellers want to stay in hotels that are distinctive and exciting, but they also do not want to pay over the odds for their room. Additionally, this group is also attracted by a healthy lifestyle and an environmentally-friendly stance. Marriott is adopting the ‘edgy’
approach with the launch in Milan this August of its first hotel under its new Moxy brand name, urban slang for those with a ‘gutsy’ attitude to life. It has plans for an eventual chain of 150 of these in key European cities. The same month in the UK, Whitbread-owned Premier Inn is hoping to appeal to the budget/value
MARCH/APRIL 2014
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