Experiential marketing in the budget hotel: do Gen Y and Gen Z change the game?

Purpose This study aims to investigate if experiences can create satisfaction, loyalty and place attachment in the context of the budget hotel industry given growing proportion of Gen Y and Gen Z of budget travellers. Design/methodology/approach This study uses structural equation modelling-partial least squares approach to validate the path model. A total of 168 samples in Indonesia were collected using online consumer survey. Findings The findings show positive and significant effects of experience on memories, perceived value, satisfaction, loyalty and place attachment among budget hotel travellers. Research limitations/implications Some studies have investigated the importance of experiences in budget hotels marketing. This study contributes to this discussion by presenting that multiple dimensions of experience (sensing, feeling, thinking, acting and connecting) are significant drivers of satisfaction, loyalty and place attachment among Gen Y and Gen Z majority budget travellers. Practical implications From the findings, the authors suggest budget hotels to provide physical service environment that can enhance the visitor experience while visiting the hotel related to services relating (e.g. cozy room), acting (e.g. instagrammable spots), thinking (e.g. game centre) and sensing experience (e.g. music that soothes the soul) and social interaction (guest-to-staff interaction) that can enhance feeling service (e.g. welcoming staff). Originality/value Given the growing proportion of Gen Y and Gen Z among budget travellers and growing occupation of budget hotels, it become more essential to understand how customers perceive the services of budget hotels. This study shows that today customers perceive not only cost but also experiences as important factors that determine their satisfaction, loyalty and attachment towards budget hotels.