News

Global study: Millennials' mobile use reshaping hospitality industry

A new report from Oracle Hospitality — "Millennials and Hospitality: The Redefinition of Service" — highlights the ways in which hospitality operators need to adapt their services to meet the individual needs of millennials

April 14, 2016

In order to meet the needs of millennials, hospitality operators must offerthem choices when it comes to speed and personalization, according to a new report from Oracle Hospitality — "Millennials and Hospitality: The Redefinition of Service." It polled more than 9,000 millennials from around the world about their use of technology in hotels, restaurants, bars, and coffee shops in a survey that quantifies the impact mobile devices are having on hospitality.

Demonstrating, in some cases, that mobile use is pervasive and reshaping the industry, key findings from the report included that:

• 39 percent have ordered delivery or take-out using their smartphones
• And 20 percent have used a mobile device to check-in at a hotel.

"Mobile is very much here and happening in hospitality," said Ray Carlin, vice president of Solution and Strategy Management at Oracle Hospitality, which commissioned the global study.

The results underscore how technology is altering consumer expectation and presenting hospitality operators with an opportunity to win millennials' business.

"Providing such tailored service not only means accommodating consumers' use of smartphones, but for operators to leverage their own mobile devices to better serve them," Carlin said.

Among the report's other findings:

• Loyalty is a priority for food and beverage — Fifty-two percent of millennials want to use their mobile devices to take advantage of loyalty programs offered by restaurants, bars and coffee shops. Millennials want to be acknowledged, with personalized rewards that reflect their individual preferences. For the operator, this offers potential in collecting data about customer behavior and delivering targeted promotions to drive order value and revenues.
   
• Hotels face a mobile frontier — Millennials in every country are already using their mobile devices to conduct core functions with hotels. Among the findings: 20 percent had checked into a hotel using their mobile device, while 46 percent had booked a hotel room through similar means. Only 12 percent had ordered room service by smartphone, yet room service was the number one request when millennials were asked how else technology could improve their stay.
   
• Gaps exist between desire and ability — In several instances, millennials' desire for mobile-driven activities and their actual experience using them varied significantly. For example, only 29 percent of U.S. millennials reported already having paid with a mobile device, but 44 percent expressed a desire to do so.
   
• Geography makes a difference — Many similarities exist among millennials around the world, but behavior and preferences also vary greatly by geography and culture. Japanese millennials, for example, were less likely to use their smartphones in hotels or restaurants – only 19 percent wanted to pay for food or drink by mobile device.
   
• Voices need to be heard — When evaluating hospitality employers' use of technology, more than one third (36 percent) of millennials who had worked in the industry said that there was much room for improvement. Only 15 percent said their employers solicited their suggestions for improving technology use.
   
• Not all mobile devices are equal —Millennials can't part ways with their smartphones – 87 percent of survey respondents said they use one daily. The Apple Watch is already being used by 10 percent of UK millennials. But other devices are used less than perhaps expected: only 37 percent reported using iPads and tablets daily.

"The other significant finding is that the demand for ordering and paying by smartphone is not universal – there are plenty of millennials that still want personal service when they're in a hotel or a restaurant," Carlin said. "Our job is to help operators adapt and define how technology supports a personalized, flexible service offering."

Oracle Hospitality pursued the research project to aid hoteliers and food and beverage operators gain a better understanding of millennials, who represent the largest segment of the workforce in many countries. Such insight is essential not only to engage the tech-savvy demographic as customers, but to enhance their abilities as employees to deliver guest service. Conducted by an independent research firm, the survey polled participants, ages 18 to 35, in eight countries, including a subset that had worked in hospitality within the past five years.