Smart hoteliers know they can’t afford to ignore the next generation of luxury travelers. Why? Because they are an economic force to be reckoned with.

Millennials, or those born between 1981 to 1997, already surpassed baby boomers as the largest generation in the U.S. two years ago. And globally, millennials number about 2 billion, making up roughly 27 percent of the world’s population. That’s not counting Generation Z, those born beginning in 1998, who are expected to eclipse millennials in size, according to Goldman Sachs Global Investment Research.

“Luxury hotels need to embrace the younger generation — and the older generation of travelers,” said Pat King, CEO of the Doyle Collection. “That’s a non-negotiable.”

But figuring out how to appeal and connect to the next generations of luxury travelers, without alienating older travelers, is easier said than done. Do you use social media? Or interesting dining experiences? What about wellness? Or technology?

Hoteliers’ methods, as we found out when we spoke to them at the recent International Luxury Travel Market in Cannes, are varied and multi-faceted.

Understanding the Next Generation’s Spending Power

Just how valuable is the next generation of luxury travelers to hotel companies?

“I think we’ve underestimated the millennial generation’s power in luxury,” said Jenni Benzaquen, vice president of luxury brands in Europe for Marriott International. “They are making and spending money and they are so obsessed with experiences. For us, this is our bread and butter.”

She said more than 50 percent of luxury spend would come from millennials over the next four years.

Benzaquen’s view on the spending power of younger travelers, however, slightly contrasts with the opinion of Capella Hotel Group CEO Nicholas Clayton. He said, regardless of age or maturity level, luxury travelers still need a certain level of spending power and that it’s not necessarily being driven by age.

“Whether your travelers are more mature or less mature, they still need purchasing power to obtain luxury,” Clayton explained. “I don’t know that age is powering that. I don’t see millennials as a distinct demographic group, per se, because so many of the traits we generally associate with them apply to many age groups.”

He did, however, say that his company is paying close attention to millennial employees and said the industry has “to be attuned and sensitive and aware” of recruiting the next generation of hospitality employees.

Understanding What They Really Want

When it comes to knowing what millennial and Gen Z travelers want out of their luxury travel experiences, the experience is what matters most, according to hoteliers.

“Personalization is what they want,” said Benzaquen. “Luxury used to be one thing to one person but it’s no longer about white gloves and white tablecloths. There’s no more formality in luxury and hotels need to understand our guests. They want what’s unforgettable and unique, and they have a thirst for the unknown and they are going to markets where their friends haven’t been before.”

“The demographics are changing,” said Chinmai Sharma, chief revenue officer of Taj Hotels Resorts and Palaces. “Younger luxury travelers are choosing to spend money differently. They are not as into branded experiences, so we as luxury operators have to adapt.”

Sharma said Taj is looking to incorporate more local food-and-beverage experiences, as well as building “more social spaces and more interaction among guests and associates” to appeal to younger luxury travelers.

Benzaquen said Marriott is paying close attention to wellness. “The well-being piece is also huge, because it’s not just about physical well-being but emotional well-being too.”

Understanding the Importance of Social Media

Part of the process of understanding what the next generation of travelers wants involves understanding the social media channels and platforms that younger travelers use on a daily basis.

“How people consume information in digital has also changed how people make decisions, especially younger travelers,” said Benzaquen.

Sharma said that at Taj, the company is “focusing on digital and social a lot more because more than 30 percent of our business is from online channels” and he said the company also recently launched a 24/7 social media center called Taj Live, similar to the M Live Studios that Marriott has created around the world.

John T.A. Vanderslice, global head of luxury and lifestyle brands for Hilton, said, “I watch what younger customers are spending money on and they want experiences, especially Instagrammable experiences. It’s about delivering a luxury experience that’s a blending of both older and younger generations. Lots of millennials come from affluent families, too.”

The family aspect of luxury travel is one that Peninsula Hotels is paying attention to, said Mark K. Kobayashi, vice president of marketing.

“We have an ongoing conversation where we ask ourselves how we can attract the next generation of travelers,” he said. “We know it’s through delivering memories and experiences and that their first engagement with us could be as parents with children. It’s looking at how we engage with that group differently, and that often means through technology, or different methods of communication. We’re investing in our digital channels like our website to upgrade the site and have more user-generated content. We’ve always been cautious about wading into social media, but we know we need to have a strategy for it, and we know we need to be where our customers are, and pay attention to how they communicate.”

Don’t Forget About Global Millennials

One thing hoteliers should also bear in mind as they try to appeal to the next generation of luxury travelers is to bear in mind that there are regional differences, and that one region, in particular, is becoming a powerful and influential force in determining the future of travel.

“I think the rest of the luxury industry is catching on to the fact that the Asian luxury traveler is becoming an increasingly important part of the market,” said Marion Walsh-Hedouin, vice president of marketing, communications, and public relations for Minor Hotels. “In Asia, we are used to accommodating luxury-savvy, young Asian travelers, and sometimes people underestimate how savvy Asian travelers can be. They too want experiences.”

Walsh-Hedouin’s statement is reinforced by an analysis recently conducted by A.T. Kearney, which estimated that 58 percent of global millennials live in Asia and that 385 million, or 19 percent of all millennials worldwide, live in India alone. The countries with the most millennials around the world are India, China, the U.S., Indonesia, and Brazil.

Photo Credit: Figuring out how to appeal to the next generation of luxury travelers is something smart hoteliers are paying close attention to. Pictured here is the Anantara Dhigu Maldives Resort. Minor Hotels