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By 2020, half the global workforce will subscribe to the millennial generation, whom according to a new survey by investment outfit T. Rowe Price, should be called “The money-conscious Generation.”
Emily Pachuta head of investment at UBS suggests that due to their experience of the economic crises early on in their careers, or having witnessed their parents experience it, Millennials demonstrate post-depression attitude to spending, saving more with a preference to cash overstocks.
Given this information, the number of people willing to pay a full price for the opulence of a hotel suite may be shrinking over the next decade or so.
Big chains have demonstrated a willingness to give bloggers like the Luxury Travel Diary rooms and suites for them to auction off in return for a fancy review; they are also willing to pay big consultants to train staff how to upsell and yet still very much lag behind other industries in technology solutions to the problem of up-selling.
Technological advancements are imperative to efficient yielding.
Two ways technology can help your hotel:
1. Data mining – Can with a high level of certainty indicate to hotel staff which guest is likely to upgrade if given a nudge, this nudge maybe a small discount, airport pick up, free meal etc. (the technology solution should be able to determine this)
2. Auctions – According to Professor Bezerman of Harvard, in an auction situation experiment, if the bidding is in small increments people find auctions irresistible.
In almost 200 student auctions (not a rich bunch), every time except once Bazerman was able to sell a $20 bill for more than $20, sometimes as high as $100 and once for $200! (Highly recommended read, “The small Big” – Chapter 12). The sense of losing is attributed to this severe auction success.
An effective auction for upgrades is held by ETIHAD airways, where customers get an email 7 days prior to their planned departure asking them to bid for an upgrade and 24 hours before departure the airline declines or accepts this bid!
Hotel chains can do the same, with a bargain driven Millennials, surely this is one answer to effective yielding?