Welcome To Your New Guests

In case you haven't noticed, there's a new guest showing up at your hotel. While the stereotypical Baby Boomer traveler may still be king and queen, he and she are fast being eclipsed by their Gen Xer sons and daughters who've grown up, joined the business world and, in many cases, married and started families.

According to several studies, sometime soon — perhaps this year, more likely 2007 — Gen Xers will become the largest group of both business and leisure travelers. Several other pieces of data point to the growing strengths of the Gen X travel market. During the second quarter of 2005, according to D.K. Shifflet & Associates, lodging demand by Gen Xers grew by 7.4 percent compared to 6.5 percent growth for Boomers. And even though there are fewer of them (61 million versus 81 million Baby Boomers), Gen Xers account for nearly the same share of hotel stays.

Gen Xers are particularly fond of leisure travel. Leisure roomnights by the group tripled in the past 10 years (from 50 million in 1995 to a projected 150 million this year). By contrast, every other demographic group has had sluggish leisure travel growth or even declines (e.g., the so-called G.I. Generation, or those born before 1930).

While research shows that Gen X travelers spend more per trip than their Boomer counterparts, even while earning less money, the question is whether that trend will continue in the long run, says trendspotter Bjorn Hanson, a partner in the PricewaterhouseCoopers Hospitality and Leisure Practice. “The expenditures by Gen X travelers is impressive, but it's still up in the air whether this group will ultimately be as lucrative for the travel industry as the Boomers have been.”

Given the data, it's not surprising that the explosion in Gen X travel is having a profound effect on all aspects of the hotel industry. Most lodging companies are addressing ways to better serve this group of customers with new product types, new f&b offerings, enhanced technologies and new approaches to architecture and design. (See the story beginning on pg. 16 for a review of the latest Gen X-related hotel products.)

Of course, all of this costs money. According to PricewaterhouseCoopers, the hotel business will spend a record $5 billion this year on capital improvements, much of it in design enhancements that appeal to Gen Xers and Millenials (those born since 1980).

Even as Generation X steps to the forefront of the travel market, the habits and tastes of many Baby Boomers are changing. They're aging (the vanguard of the group are turning 60 this year), but many of them have high incomes. Large numbers of Boomers will be retiring during this decade, and travel will be their number-one post-career pursuit. When Boomers travel, says analysis from Shifflet, they consistently value three things from a lodging experience: service, security and a comfortable bed.


Like any demographic bundle, Gen Xers are a group of individuals, all with different tastes, values and aspirations. Yet, several hotel chains have been able to recognize a number of common characteristics, particularly as it relates to the travel habits and preferences of those in the Gen X group. Here is a thumbnail sketch of Gen X preferences as they relate to travel decisions:

  • Gen Xers like cutting-edge electronics and gadgets, says Shifflet research. When they travel, they expect freebies — Internet access, bottles of water, etc. A bar or other place to socialize is a high priority in their choice of hotels. Great bedding and bathrooms are another priority for this group, according to Shifflet.

  • As travelers, Xers are committed to the concept of branding, but not necessarily to one particular brand, says PwC's Hanson. “Their preferences change frequently, which makes it difficult for a hotel brand to build loyalty among Gen Xers,” says Hanson. “As a result, to serve this audience, hotels will probably need to change their concepts, decors and strategies more often than they typically would.”

  • They like to cluster together and prefer to make decisions through consensus. Distractions and multi-tasking are staples of the Gen X lifestyle, says Hanson. “A Gen Xer is very comfortable in a situation in which there are three widescreen TVs blaring when a group discussion is underway and he or she is working on a laptop.”

  • “A decade ago, when Baby Boomers dominated travel, the focus was on providing dependability, convenience and trust,” says Mike Jannini, executive vice president and general manager, brand management, for Marriott International. “Today's Gen X and Gen Y travelers have more of an appetite for style and innovation. In the future, the Xers will set the trends and the Boomers will follow along.”

  • According to a Harris Poll released in January, Gen X travelers respond to promotional offers as they make vacation plans. According to the study, 13 percent of Gen Xers planning travel always look for discounts, a higher percentage than any other demographic pod in the survey.

  • Given that many Gex Xers have recently become parents, it's not surprising that Florida is the number-one state on the vacation itineraries for this group. Orlando is the U.S. city Xers are most likely to visit. By contrast, Boomers and Matures (those people over 59) say they're going to Las Vegas on their next leisure trip.

  • Perhaps because it wasn't the case for them as they grew up, families are an “extreme priority” for Gen X parents, according to a study from Reach Advisors. According to the research, twice as many Gen X moms as Boomer moms spend 12 hours a day or more on child-raising or household tasks. Even half of Gen X dads say they spend three to six hours a day on those activities.

    This orientation toward family life is bound to translate into more leisure trips, although three- to four-day getaways will undoubtedly replace the two-week motor trips common in the 1950s and ‘60s.

  • Despite these commonalities, to some hotel executives Gen Xers don't look a lot different than their Boomer counterparts. “After a lot of work and research in the area, we've determined that Gen Xers are really closer to the center than the edge,” says Jim Abrahamson, senior vice president of Global Hyatt and architect of the company's Hyatt Place product initiative.


In addition to their love of leisure travel, it appears that Gen Xers are or soon will be regulars on the meetings circuit. Despite a perception among some that Gen Xers don't tend to be joiners, one study suggests that this group is as likely as Boomers to join trade and professional associations and societies. This translates into good news for meetings business in hotels.

A study from an association industry think tank shows that Gen X workers are expected to join associations at even higher rates than did Baby Boomers. And even though there are fewer Gen Xers than Boomers, total association membership will rise to about 55 million from 51 million today. At the same time, the percentage of all workers belonging to associations will rise slightly.

Visit www.LHonline for more information and related articles.

Who is Gen X?

  • Members of Generation X were born between 1965 and 1980 and represent about 20 percent of the current U.S. population.

  • Gen Xers were the first to grow up as latchkey kids with both parents working outside of the home.

  • Members of this population segment have a greater distrust of government and big business and see less reason to be loyal to either. The insecurity of the world spawned an independent attitude among Gen Xers articulated as “nobody will take care of me but me.”

  • Those Gen Xers who choose to have children (29.7 million of them are parents) are determined to be more family-oriented than their parents were.

  • Gen Xers tend to be more tolerant of alternative lifestyles and cultural diversity. They're also the best-educated and most technologically savvy generation in history.

Source: Cohorts


Segmenting Gen X

While some marketers look at Gen Xers as a homogeneous group, Cohorts, a marketing information company that specializes in demographic segmentation, identifies 11 cohesive consumer segments within the 35 million Generation X households. The firm's breakdown includes four married segments (Young Families, Back-to-School Families, Hyperactive Newlyweds, Young Married Starters), four single-female segments (Single Moms With Careers, Single Moms on a Budget, Educated Working Women) and three single-male segments (Male Students & Grads, Single Dads, Energetic Young Guys).

Research from Cohorts crystallizes a variety of behavior characteristics for the segments. Some of its findings:

  • Three segments — Educated Working Women, Hyperactive Newlyweds and Energetic Young Guys — are career-oriented and enjoy higher levels of income than the other groups.

  • Some Gen X groups probably aren't worth a marketing investment by most travel companies. Young Married Starters, for example, prefer to camp or crash with their friends when they travel. They're struggling financially and maxing out their credit cards on toys like flat-panel TVs.

  • The primary way to reach Gen Xers is through the Internet. It is the first generation to reach for a mouse instead of the phone book to book travel. They're more likely to provide their e-mail address to marketers, and they have a higher propensity for click-through if you send them an e-mail after establishing a business relationship.

  • Since Gen Xers research travel options online, search-engine optimization is vital, and keyword buys are extremely important. Marketers can use traditional media to drive Gen X consumers to their websites. For example, Energetic Young Guys read Men's Health, so one strategy may be to rent the subscriber file for a direct-mail effort — a simple postcard — that's concurrent with a print ad.

  • When it comes to travel, Gen Xers have specific habits and preferences: They're less likely than the rest of the population to use a travel agency; they're more likely to stay at Embassy Suites, Radisson and Wyndham than at other national chains; they're more likely to rent cars from Enterprise and fly with Continental, Southwest, Spirit and United; and they're less likely than the rest of the population to be a member of a frequent flyer club.

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