The rise of the sharing economy shouldn't faze traditional hotel chains, especially when it comes to Millennials, according one expert.
A new report from PwC said Millennial leisure travelers belonged to an average of 2.3 hotel loyalty programs, compared to 3.2 for non-Millennials. When asked if this meant Millennials were instead embracing the sharing economy vis-a-vis Airbnb, PwC Advisory's hospitality leader Adam Kennedy pointed to a different reason behind the data.
"Part of this trend might be that [Millennials] haven't had the opportunity to experience as much travel," he said, referring to the fact that Millennials are young.
When adding business Millennial travelers into the mix, they belonged to an average of three loyalty programs, compared to 3.6 for those over age 30 - a much smaller spread. "When you look at just the business Millennial traveler, they look exactly like the non-millennial base," he said.
Though Kennedy said traditional hotel outlets, such as Marriott International (MAR - Get Report) , Hyatt Hotels (H - Get Report) , Starwood Hotels and Resorts (HOT) and Hilton Worldwide (HLT - Get Report) , can't ignore the rise of the sharing economy and Airbnb. Starwood Hotels and Resorts is a holding of Jim Cramer's charitable trust, Action Alerts PLUS.
"What these loyalty programs need to be focused on is driving engagement to their service and brands," Kennedy said.
To target Millennials, Kennedy said hotels are relying on rich user data. "Now more than ever, hotel companies have more information and more access to the information," he said. "[Users] opt-in to these loyalty programs and give them that information."
Kennedy also said the increase in online travel bookings is another source of data. "[Hotel companies] are trying to put that data into action and provide offers and programs that are going to pick up on the nuances that the Millennials and even the non-Millennials too, to drive more engagement and create more of a sticky customer," he said.
He said it's still unclear how much of a threat the sharing economy is to traditional hotel outlets. "A lot of people know about the sharing economy, but not a lot are using the sharing economy," Kennedy said, referring to PwC data showing increased awareness of the sharing economy, but less engagement.