How Gen Z Is Shaping Hotel Revenue Management Strategies

As the first digital-native generation, Gen Z is profoundly impacting the hotel industry. Born between the mid-1990s and the early 2010s, Gen Z travellers are highly tech-savvy and value experiences over possessions. They seek authentic, personalised experiences and are more likely to support brands that align with their values.

We explore how Gen Z's unique preferences and priorities challenge hotels to rethink their traditional revenue management strategies.

Digital-First Approach

Gen Z travellers are accustomed to using digital channels to research, book, and manage their travel plans. As a result, they expect hotels to have a strong online presence, including user-friendly websites, mobile apps, and social media accounts. Hotels that fail to meet these expectations risk losing Gen Z customers.

Hotels must prioritise digital marketing and online distribution channels to appeal to this demographic. They must also offer seamless digital experiences that allow guests to book and manage their stays easily.

Price Sensitivity

Despite valuing quality and convenience, Gen Z travellers are also very price-sensitive. As a result, they are more likely to compare prices across different hotels and booking platforms and may choose budget accommodations over luxury hotels if the price is right.

Hotels must consider the need to offer competitive prices and promotions that appeal to this demographic while maintaining profitability. In addition, revenue management strategies must prioritise dynamic pricing and flexible rate structures to maximise revenue and occupancy.

Personalisation

Gen Z travellers expect personalised experiences that cater to their unique preferences and interests. They value authenticity and crave genuine experiences over generic, cookie-cutter accommodations.

Hotels can appeal to this demographic by offering customised amenities that align with guests' interests and preferences. Revenue management strategies may need to prioritise personalisation and customisation, such as providing room upgrades, personalised recommendations, and tailored packages.

Social Responsibility

Gen Z travellers are socially conscious and expect the brands they engage with to share their values. As a result, they are more likely to support hotels prioritising sustainability, diversity, and social responsibility.

Hotels can appeal to this demographic by communicating their commitment to social responsibility through marketing and operations. In addition, revenue management strategies should prioritise sustainability and social responsibility to attract and retain Gen Z customers.

Conclusion

Gen Z is reshaping the hotel industry, challenging hotels to rethink their revenue management strategies. Hotels must prioritise digital-first approaches, competitive pricing, personalisation, and social responsibility to appeal to this demographic. Those that adapt to these changing preferences and priorities are likely to thrive, while those that fail to do so risk being left behind.