The coronavirus pandemic-created recession is the second to hit millennials somewhat early into their careers, and that will have long-lasting effects for the generation and those marketing to it.
As hoteliers prepare their properties and operations for the pandemic recovery and whatever the industry will look like in the years that follow, there is something they should keep in mind from the perspectives of both a hotel business and employer: Financially speaking, millennials just can’t catch a break.
The older half of millennials were at the very early stages of their careers, ranging from being a few years into their 20s and first serious jobs or in college preparing for said jobs, when the Great Recession absolutely rocked them (along with everyone else).
Many millennials lost jobs or took significant and long-lasting pay cuts. Some had to move back in with their parents or take in roommates when they had previously been able to live on their own. As a generation pushed by their parents to pursue higher education, many had mountains of student loan debt, even from less expensive state schools, with a much more limited means of paying it back. Far too many seemingly entry-level jobs required years of experience.
As a result of the recession, even years into the recovery, millennials faced severe challenges compared to other generations. In May 2019, The Wall Street Journal reported on the effects of the recession on millennials, writing “New data show they’re in worse financial shape than every preceding living generation and may never recover.” Not a super rosy picture.
Now we have the coronavirus pandemic. Though companies have started hiring back more employees since March and April, the U.S. still faces record-high unemployment. There’s growing concern over people being able to make their rent and mortgage payments. I’m not even going to go into the cost of health care associated with recovering from having a severe case of COVID-19.
As the Wall Street Journal wrote back in April, “it’s hard to save for a rainy day when it seems to never stop raining.”
Pew Research Center data shows that in this pandemic, millennials are seeing a higher unemployment rate (12.5%) compared to Gen X and baby boomers. One reason is the leisure and hospitality industries were among the hardest hit by the pandemic, and these sectors typically have younger workforces.
The pandemic has certainly hit everyone in every generation. I am by no means trying to dismiss or lessen any of the harm done to people in the Gen Z, Gen X or baby boomer generations. This is not a “woe is me” column for millennials. What I am trying to do is provide context, pointing out what’s happening to a generation that was (and maybe still is) supposed to become this huge spending force.
Millennials’ priorities are likely different due to the recession. There is a greater emphasis on creating memories, having experiences and then sharing those with others, especially through social media. Travel makes up a huge part of that.
Millennials do love travel, but after the financial lows of both the recession and the ongoing pandemic, what that looks like in the future is tough to predict. Perhaps that means more travel but on tighter budgets. Maybe it’s less travel overall, but those who can stay at more expensive properties. It could be a mix of both or nothing like that at all. These financial hits at crucial points in millennials’ lives could mean they generally have less available money available for discretionary spending, which could mean travel. When debt grows and money is in short supply, priorities change, sometimes for years after.
During the pandemic, hotel companies and other employers are doing what they can to stay open to bring in whatever revenue they can. As during the last recession, they are learning how to do more with less. They are changing operations to make it work, and that might mean new staffing models and automation. That translates to fewer employees. While that certainly cuts down on labor costs, it also means fewer people employed overall.
The pandemic is far from over, and we won’t know the lasting effects it will have on the world until years from now. While we cannot predict the future, we can at least look at what is happening now and try to figure out what it could mean so we are at least somewhat prepared.
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