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What Hotel & Real Estate Investors Are Getting Wrong About Gen Z (And Why It’ll Cost Millions)
- Rachel Zlatar
- Jun 20
- 3 min read
By 2030, Millennials and Gen Z will make up over 75% of global travelers. They are loudly shaping the future of hospitality, yet the hotel and development industry is still building for the past. What used to be considered a "safe bet" can quickly become a liability for investors.
No one is travelling around the world for a copy and paste hotel room anymore.
They’re seeking connection, creativity, and meaning. Just because a project looks "safe" or "traditional", like a typical chain hotel or standard resort, doesn’t mean it’s a smart investment anymore. Developers who still cling to these uninspired formats aren’t just outdated and will be left behind, they’re missing enormous revenue opportunities.
While institutional-grade hotels may offer consistent returns, they will struggle to attract younger travelers, influencers, or the premium leisure market.
In today’s world, driven by social proof, what’s not seen doesn’t get booked and if your project is based upon fixed aesthetics and rigid formulas, there’s simply no room for shareable, Instagrammable experiences.
The Rising Cost of "Bland"
At first glance, institutional formats feel low-risk. But risk isn’t just about volatility, it’s also about relevance.
For younger generations, misalignment with values is the new instability. Investors are increasingly wary of “risk disguised as tradition.” Just because it seems safe or proven, it can quickly lead to a declining asset value if it no longer aligns with evolving market demands.
Programs like Hilton’s Curio and Marriott’s Autograph are pushing into “soft brand” territory, enabling boutique operators to deliver authenticity while investors benefit from reduced fees and favorable interest conditions.
But these are stopgaps.
The real shift lies in fully embracing experiential development projects. People want to meet and mingle with locals; to feel like they are experiencing moments that can’t be recreated.
Gen Z and Millennials, crave purpose and connection and will actively reject sterile environments.
Community. Culture. Conscious Capital.
Flow Living is proving that the future of real estate isn’t just in square footage. Launched by Adam Neumann in 2022 with backing from Andreessen Horowitz, Flow applies a vertically integrated model blending development, hospitality, wellness, and technology. In Saudi Arabia, this vision found extraordinary resonance. “As far as I’m concerned, Saudi Arabia is the best place in the world to do real estate,” Neumann said, pointing to Riyadh’s youthful population, 70% under the age of 35, and the country's ambitious Vision 2030.
In a market where community-focused living "does not exist," Flow’s concept of intentional, integrated spaces has been met with strong demand and has allowed him to charge premiums in the rental market as they are selling community.
This shift isn’t theoretical. The next generation is supporting brands that prioritize community-driven design, local integration, and flexible living. Flow Life, Citizen M, Zoku, Habitas, Ennismore, The Social Hub, Generator, Freehand, and others are all fusing hospitality, co‑living, remote work, and leisure.
Why Boring Projects Fail.
They’re forgettable.
Standard hotel rooms simply don’t cut it anymore. 68% of Gen Z travelers now prioritize “Instagrammable” stays. Without stand-out visuals, bookings decline.
They don’t meet modern needs.
Today’s travelers are not just looking for a place to sleep, they want flexible workspaces, community, wellness, and inspiration. Traditional projects weren’t built for hybrid living.
They leave revenue on the table.
Experience-first properties enjoy higher ADR, longer stays, and stronger brand attachment. Boring builds that lack modern facilities can’t command the same margins or momentum.
They fail to build loyalty.
Without purpose, personality, or community, there’s no reason to return. Gen Z and Millennials want alignment with their values, cookie-cutter hotels just don’t spark that connection.
They ignore the sustainability mandate.
Today’s travelers don’t just appreciate eco-conscious design, they expect it. Projects that lack sustainable infrastructure or regenerative purpose are seen as tone-deaf and outdated by the next generation of guests and investors alike.
Investment Takeaway for Developers
Avoid safe-styled assets. Generic beachfront hotels and cookie-cutter holiday homes feel obsolete.
Build for community and sustainability. Design that feels alive, spaces built for social life, local culture preserved.
Invest in purpose. Regenerative developments, ESG practices, local engagement and wellness drive premium appeal.
Let them co-create. Involve younger audiences early in the planning process; they value ownership of experience.
Think like creators, not capital allocators. Investors hungry for authenticity don’t want glorified spreadsheets, they want stories and soul.
The (New) Bottom Line
Real estate is no longer just about square footage, it’s about energy. Gen Z isn’t just looking for somewhere to stay, they’re seeking belonging, impact, and resonance. Developers sticking with bland, predictable models risk not just unsold rooms, but obsolescence.
The future belongs to the builders of experience. Those who understand that design, community, sustainability, and purpose aren’t features, they’re the product.
