It’s suicidal in business not to take note of new trends in your market and to respond to those shifts. A business must analyse what is going on, and create products and services that tap into new thinking and needs. Businesses that don’t do this run the risk of losing market share – or even of failing completely. The example of Nokia and Blackberry, both previously leaders in the mobile phone industry, prove the point. They have become much smaller players in their markets because they did not innovate when their customers were looking for new technology and more sophisticated mobile offerings.
This thinking has been crucial for South Africa’s Protea Hotels, and it’s one of the reasons we were an attractive investment to the global hospitality giant, Marriott International, which bought Protea Hotels in 2014.
A major focus for Protea Hotels by Marriott in recent years has been on understanding the millennial generation. This is the consumer segment aged from 18 to 35, and we are acutely aware of the need to cater for them because they are currently our market and it is a market that is growing.
While there is a wealth of research regarding this generation coming out of the United States and the USA, less is available from a local, South African perspective. Having said this, we have been able to reach some conclusions about millennial behaviour from our experiences in our own business.
We have found that the local millennial is just as enthusiastic about the use of technology and social media as the foreign counterpart. But, it’s clear that locals differ in one crucial way: access to connectivity. As a result, we see a contrast in the response of our local guests to the free Wi-fi we offer guests in our hotels – they really appreciate this service, while the foreign guest sees it as the norm. No doubt, this is owing to the high cost of data in South Africa and the fact that free Wi-fi is not found in many places.
Another issue that impacts on trends among millennials in South Africa is the income disparity in the country. This means that we have people within this age-bracket that are distinctly different because of their spending power (or lack thereof). From a hospitality perspective, the millennials we focus on make up a small part of the entire group: millions of people in the millennial group are un- or under-employed, and so they fall outside of our target market. Our market is thus far smaller than in many other countries.
It’s made even smaller by the challenges in our education system. Since our university throughput rates are poor, the number of South African youth likely to be able to take up leadership roles in business and the professions is low, and these are the people who make up the client base of the hospitality industry. This is obviously very different from what other hospitality groups find in their regions in North America, Europe and parts of Asia.
As for other features of millennials internationally, we have experienced a similar focus on health issues that research tells us about the millennial market globally. People request healthy food options, and we have seen a demand for healthy activities. In response to this, some Protea Hotels by Marriott now provide for more healthy activities, such as running maps for local running routes around the neighbourhood, over and above the usual hotel gym.
In the South African context, we at Protea Hotels by Marriott are constantly in touch with the demands of the millennial market, both domestically and internationally, since we attract guests from both regions. Our product development, hotel design, services and facilities must align with what the millennial audience tells us.
This article was first published in The Event on 28 December 2016.