Keep up with the new ways millennial travellers are paying

new-paymentsEveryone in the hotel industry, including those representing some of the oldest and most established brands, should always have an eye on the future, and therefore an eye on the next generation of potential guests. An increasing number of hotels are actively going after these younger millennial travellers, but even if you cater to an older audience, it would be wrong to ignore the changing ways that people book and pay for their holidays.

For those which are going after the slightly younger market of 16 to 35 year olds, the potential payoff is huge. Many don’t have to worry about kids or a mortgage, but do have enough money to start travelling and splashing out on certain luxuries. Although it would be wrong to stereotype an entire generation, millennials also tend to travel differently and have different expectations when they arrive.

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We recently carried out research into UK holidaymakers with CensusWide to see how the way we take our holidays, and what we do on them, has changed. Importantly too, we were also able to see how these changing behaviours might affect hotels and how they should react.

As you might have already predicted, the younger generation, more than anyone else, sees their holidays as an opportunity to take great pictures for their social media accounts. 1 in 5 of those we surveyed said that one of the first things they did when they arrived at their destination was to update their Facebook status or post a selfie on Instagram. 31% said that they would always head directly to the nearest swimming pool, while 24% would go straight to the first available bar.

Cash alternatives

The changing ways that we go on holiday also extends to the way that younger travellers want to make payments both during and at the end of their stay. The new generation is increasingly turning off using cash. While it has been quite clear to see that we use our cards much more often when shopping on our local high street, it now looks like this behaviour has also seeped into the way payments are made while abroad.

Part of this is that having to buy and then transport large quantities of foreign currency is seen as a worry. 25% think that carrying currency on their holiday makes them more likely to be a victim of crime and 45% worry about leaving large quantities of cash anywhere in their hotel room.

Instead, 35% of 16 to 35 year olds who we surveyed said that they kept the amount of foreign currency they had to carry with them to an absolute minimum. In order to achieve this, just over half of these younger travellers now make payments on their holidays using their credit or debit cards.

It’s not just a movement to credit or debit cards which show the way millennials see the use of cash on holiday. Almost 1 in 10 said that they had made a contactless payment when on holiday in the last 12 months, while 5% had made a mobile payments using a service like Android or Apple Pay.

While the use of new technology does sound exciting, it does present a problem if the people using them don’t fully understand how they work and how they might impact the amount they pay. Of those we surveyed, only 29% said that they checked the fees that their bank or card provider would charge them for using their card abroad.

This is where hotels can play a positive role. For payments made during and at the end of their stay, hotels need to ensure that they are offering their younger guests not only the payment options that they want, but also providing them with the information on what selecting each option means. This might include whether or not they accept mobile or contactless payments and if they work differently, for example, by having different spending limits. Information should also be provided on whether your guest might want to pay in the local currency, or in their home currency using dynamic currency conversion. No one option is necessarily right for everyone, so your guests need to have the information they need to make a payment with the option that suits them best.

By offering choice and understanding the different ways that the new generation is taking their holidays, hotels can be well placed to capitalise on the growing spending power of millennials. Having the right strategy in place can mean benefits for your business today, and lasting benefits for many years to come as the backpackers of today become the family holidaymakers of tomorrow.

About the author

Jennifer Conneely writes on behalf of the DCC Forum. The DCC Forum has been created by a group of 5 international companies, all of whom work within the Dynamic Currency Conversion (DCC) and financial services sector. Members of the DCC Forum have elected to adhere to a set of Forum Principles advocating best practice of DCC and ensuring it is operated in line with all card scheme rules.

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