It’s no secret that Millennials like to spend money, especially when expenses are covered by their boss. Boston Consulting Group (BCG) forecasts that by the year 2020, Millennials will account for 50% of all business travel spending. Compared to The Baby Boomers or Generation X, Millennials are more likely to spend more money on food, room service and alcohol when they are not footing their own bill. At first glance, it may seem to be in the company’s best interest to avoid hiring these big-spenders for jobs that require travel, but their spending habits may not necessarily be the end of the world.
Millennials are defined as anyone born between the years 1981-2000; they are said to be free-thinkers and deal-seekers. Millennials grew up with technology, seek a healthy balance of work and personal life, and are taking more opportunities to travel than any generation before. In general, it seems many Millennials don’t want to feel tied down and are more than willing to work just as hard if given the ability to travel while working or given work assignments that require travel. Even though they are more likely to spend more money than some of their elder colleagues, it is because they would rather spend a little more to get something great, as opposed to spending a little less to get something not so great.
Redefining the Business Traveler
Since millennials will soon account for half of all business travel spending, businesses may be forced to reconsider what it means to be a business traveler. One thing that is incredibly important to Millennials is value. BCG explains that Millennials who travel for work are more interested in loyalty programs that give them opportunities to get free or discounted travel rather than upgrades. Another thing to consider is that Millennials are quick to change to a different loyalty program with a new company if they believe they will be getting a better deal that offers them more value. They don’t necessarily seek out the cheapest option, but rather, the biggest bang for their buck.
Another thing that redefines business travelers is that millennials are also much more eager to voice their complaints than older generations. With websites like TripAdvisor and Yelp, Millennials are holding businesses accountable and demanding higher expectations. A survey conducted by Expedia concludes that 8 out of every 10 Millennial business travelers consider online reviews important in choosing where they take their business. With the abundance of smartphones and apps these days, Millennials are utilizing technology to book travel arrangements. Expedia’s survey found that 30% of business travelers under 30 are likely to use a smartphone to book travel arrangements, while 20% report booking on a tablet. Millennials are sharing information faster than ever before and are also utilizing social networking platforms to seek out meetups or social opportunities while traveling for work. Apps like Tinder, Foursquare and Meetup are being used to take “bleisure”, a practice of mixing business with pleasure, to a whole new level.
Since Millennials are keen to choose a good deal instead of glitz and glam, their spending habits may actually work in their companies’ favor when it comes to business travel expenses. MMGYGlobal states that 60% of Millennials would rather spend money on experiences as opposed to material objects. Since Millennials are after a work experience that allows for some leisure activities and accommodations that promote a social atmosphere, they are much more willing to stay in more affordable accommodation options like Airbnb, Moxy, Aloft or Canopy. Cesar Fernandez, a logistics coordinator and project manager in his late 20’s, has spent weeks at a time traveling on work assignments and admits he would prefer staying in a more budget-friendly accommodation so long as there is unlimited wi-fi, it’s clean and there is enough space for him to get his work done comfortably. He also talks about additional perks such as happy hour being a huge plus. Millennials crave social interaction and would much rather stay in a friendly, active environment than an expensive 5 star hotel that doesn’t cater to these needs.
Millennials are also making the move towards cheaper means of transportation. Companies like Uber and Lyft are taking over the rideshare scene. According to Fortune, Uber rides made up 41% of expensed rides during the fourth quarter of 2015. Fernandez says Uber is his go-to rideshare app when he needs to get anywhere because it’s cheaper than a regular taxi and in most cases he gets to his destination quicker. In the long run, these budget-conscious employees may end up saving your company money on travel expenses.
In any line of work, the need to travel is real. A fashion retail buyer might travel to Paris to shop the markets. A mechanical engineer may travel to China to meet with prospective manufacturing plants. A sports agent might travel from country to country scouting out the world’s best talent. As companies consider hiring more Millennials to fill these roles, it is certainly important to know that they differ in their spending habits and are reshaping the business travel industry fast. But as it turns out, Millennials’ habits could actually be an advantage to your company.