As Millennials become a larger portion of the maturing workforce, they are reshaping the economy and marketing of business travel.
Last week we released a new report in our Skift Trends series that helps to explain the How Tech Is Changing the Way Millennials Do Business Travel.
Below is an extract. Get the full report here to get ahead of this trend.
In a generation that’s driven by the selfie stick and social media, many believe that loyalty to a particular brand may lose priority to loyalty to oneself. Millennial business travellers, as a result, may chose to focus on immediate products that enhance their personal status (or their projected status) rather than staying loyal to one sole airline or hotel. Reflecting this, a recent study by Software Advice suggests that 86% of Millennials don’t even belong to a hotel loyalty program.
In reality, the landscape is not so simple. Business travelers, regardless of generation, will always have a stronger loyalty to brands because of their frequent exposure to rewards programs and the benefits therein. Across the Millennial spectrum though, that strict loyalty drops off precipitously as the business travel becomes more infrequent. This is a common phenomenon as people age, but research shows that young Millennials are unusually brand agnostic.
Road warriors such as consultants and business development managers, for example, may have a stronger loyalty towards traditional brands such as Starwood, Avis or United. Those products are widespread, the benefits are well established and the aggregated loyalty programs can be very lucrative.
Casual Millennial business travelers, however, will let their generational tendencies infect their loyalty. The route from Chicago to San Francisco is a good example. Any given flight search will yield a similar price for nonstop flights among American, United and Virgin America — three carriers that compete on this route. While American and United have strong and decent loyalty programs respectively though, Virgin America’s is widely regarded as middling. Yet despite that deficiency, many Millennials choose to book their travel on Virgin America.
What Virgin America has been able to successfully produce in targeting Millennial business travelers is not only a compelling product but also a compelling experience. And that, explains Joe Kessler, President of Deep Focus, is what really appeals to this audience. Design, in this case, trumps loyalty.