The Omni La Costa Resort and Spa was the site of a ULI conference, “Hotel and Resort Development: Next Wave of Innovation,” in June in Carlsbad, California.

The long-predicted generational shift in the hotel industry is starting to happen, according to speakers at ULI’s recent “Hotel and Resort Development: Next Wave of Innovation” conference in La Costa, California. Baby boomers are growing older and millennials are developing as a buying group, forcing developers and operators to rethink developments.

Everyone is racing to determine what works—and what doesn’t—as projects look to adjust to the latest trends, speakers said.

The industry is in the midst of an “amenities arms race,” said Leighton Collis, chief executive officer (CEO) of Bespoke, a marketing firm. “Consumers have never had so many choices.”

But many of the traditional amenities are no longer driving traffic. Golf is “stagnant,” said Bruce Baltin, managing director of CBRE Hotels. Instead, wellness, education, and experiential resorts are attracting more consumers. Resorts must offer more than a chance to sit next to a pretty pool.

“You’re not selling a room, you’re selling an experience,” Baltin said. “The resorts that are active are doing much better than the passive.”

Evidence of the impact of the younger audience can already be found throughout the industry, including the second-home market, which plays a large role in the development of many resorts.

“Despite concerns that only boomers . . . would be driving the second-home market, it’s not true,” said Adam Ducker, managing director of RCLCO, the consultancy. The median age of buyers across the United States is closer to 40, he said.

Several other post-crash predictions have not materialized, Ducker said. Some analysts forecasted that tightfisted buyers would “flock to value” and prefer destinations within driving distance of their homes. But the geographic patterns of second-home buyers have changed little in recent years, he said.

Executives focused on several key trends:

Multigenerational: Families are vacationing together and they want to stay together. Hotels must be able to accommodate full families, which translates to villas and suites with three or four bedrooms; or larger and adjoining rooms with extra beds and space for people to gather.

“There is a much greater market for standalones, three- or four-bedroom units,” said Cate Thero, executive vice president of sales and marketing for Replay Resorts. In the past, the large villas were sold as residences, not offered as rentals. “That is a different kind of product in many markets,” she said.

The key is flexible spaces for both families and friends. “This year, it’s big family; next year, it’s a big group of friends,” said Benton Jenkins, principal of Land Advisors Resorts Solutions. “The key is to get in their mind this is something they will enjoy with other people.” Gary Derck, CEO of Purgatory Resort, said his company promoted “Big Chill packages,” invoking the movie to encourage friends to gather for holidays.

Urban resorts: More and more people are vacationing in cities, creating a new level of urban destination resorts. Younger travelers like the energy and convenience, as well as the proximity to events. Markets like Nashville, Seattle, and Austin are growing as destinations faster than most traditional resorts.

The trend has created a need for urban hotels that are catering to more than conventioneers, with flexibles rooms and hip atmospheres. Cities are already full of energy and things to do, Derck said. “You don’t have to build amenities,” he said. “The amenities are baked in.”

Second homes turn into primary homes: A shift has occurred in how consumers are perceiving their second-home purchase, said Chris Fair, president of Resonance Consultancy. Instead of looking at a purchase simply as an investment, they are buying vacation homes that someday will serve as a primary home. This translates into the need for more “homey” sales offerings in resorts, rather than units designed for quick rentals. Toy storage is popular, Derck said.

At the heart of every trend is the growing influence of millennials, who will ultimately reshape the industry. Early indications suggest that they are traveling much differently than previous generations.

“The biggest challenge with millennials is time deprivation,” Derck said. They do not always have time to travel to mountain resorts, he said. His company is exploring developing projects in the Southwest closer to cities.

“You don’t have to be in a city, but close by,” Derck said.

The good news for mountain projects is that millennials are skiing as much as—if not more than—their predecessors, Derck said. But overall, projects need to develop flexible amenity packages, offering different experiences for different members of the family.

“We used to think we had to program,” Derck said. “Now it has shifted more to being a curator.”

Both baby boomers and younger customers want to be able to choose their own activities, and projects that are too rigid are not working as well, the experts said.

“You have to customize the hotel experience,” Baltin said. “That’s why big-box hotels have a challenge.”

Campus-like environments with flexible accommodations and the ability to offer a menu of experiences are going to grow more than traditional gated projects with a big central clubhouse, Collis said. For older facilities, “I don’t think it’s an easy fix,” he said. Many might be teardowns, he said.

Many resorts make a mistake by trying to compete across broad audiences, instead of focusing on the needs and desires of their best clients, he argues. “You need to appeal to insiders,” Collis said. Do not try to appeal to the whole world; instead, focus on “the best three customer types,” he said.

Operators need to recognize that millennials approach travel and events much differently than previous generations, executives agreed. New facilities and programs must be designed to suit those needs.

“A millennial wedding is not one event, it’s five events,” Collis said.

From a market standpoint, industry cannot assume they are going to respond to the same devices as previous generations. “Loyalty programs are not for younger people,” said Melissa Silvers, principal of SCS Advisors. “They are going wherever they can get a room,” she said. “They are not loyal to nobody.”

To attract millennials, the “sweep spot” for projects is a “certain level of green,” flexible spaces, walkability, and full of wireless connections, Derck said.

“Authenticity is essential these days,” he said. “You can’t fake it.”