How Millennials Are Redefining the Travel Industry
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Each generation has brought about societal and industrial change as a result of their upbringing. Baby boomers (born between 1946 and 1964) are known for conspicuous consumption, while Gen X (born between 1965 to 1984) is known as the “latchkey generation.” The characteristics of Millennials, generally defined as those born between 1985 and 2000, is still evolving, but their influence on the travel industry is definitely considerable.
Millenials are fond of traveling, more so than the preceding generations. They represent about 25% of the population, and according to estimates by the United Nations, about 20% of all international travelers annually are millennials. This is impressive, as it means a majority of millenials travel every year. With such a significant portion of travelers from a single generation, it is no wonder that the travel industry is sitting up to take notice. Here are some ways how millennials are redefining the travel industry.
To understand the Millennial buyer behavior and travel expectations, you should look at the forces that shaped them. They grew up in a time of trauma, with two wars, economic recessions, major natural and environmental disasters, and the 9/11 attacks. Such uncertainty has made them desire stability. In addition, they also grew up in rapid technological advances, which have made them expect constant connectivity. Apropos to this, social networks has developed a culture of rewards with likes, shares, and retweets. These have changed the way Millennials travel.
Millennials travel 4.7 times more for business a year and 4.2 times more for leisure than previous generations. However, because they grew up in a culture of rewards, they crave recognition, and prefer traveling in a way that caters to their uniqueness. The packaged tour that appealed to older generations has exerted less pull on Millennials. This generation prefers customized travel that cater to their individuality. About 66% of Millennials are lured in by “unique experiences,” compared to just 50% of the Baby Boomers and Gen X generations. Millennials value personalized treatment from travel companies, which can lead them to recommend and remain loyal to a company that can give them the option to customize travel and good customer service.
Millennials value their time more than previous generations, which is in keeping with their fast-paced lifestyle. When they travel for business, they also squeeze in some leisure travel, and vice versa. Some call it a “bizcation” or “bleisure”, which is progressively becoming more popular. Most Millennials can extend their time away from home because many have delayed starting a family, which translates to less motivation to go home as soon as possible. Combining business with pleasure allows a traveler to unwind and get some downtime to avoid burnout. Employers understand this need, as millennials that go on a bizcation often come back to work more productive and enthusiastic. Millennials also spend on a bizcation as if they are on a regular vacation, paying out-of-pocket for any spending that is not eligible for business reimbursement, so smart hotel managers will take care of these business guests very well.
Of course, the biggest impact to the travel industry is the almost breathless growth of social media and its impact on buyer behavior. The travel industry is well aware of the value of word-of-mouth to sell their offerings, and social networks are the most pervasive way to do this. Most Millennials (97%) check social media and online reviews before making a move on their travel plans. In fact, Millennials trust online reviews from individuals (not from company websites) more than recommendations from friends and family, and more than advertisements from companies. Travel review sites like TripAdvisor are popular for this purpose.
Many get inspiration from posts they see on Travel Blogs, Facebook, Twitter, Instagram and other social media platforms. In turn, Millenials are not shy about sharing their own reviews, photos, videos, and stories about their own travels. This creates a domino effect by giving fellow Millennials an idea where to go, what to do and eventually plan their next trip alone or even with their set of friends.
Travel companies that have no online booking facility are bound to lose any business from Millennials. Millenials value their time and convenience, and will ignore any offers that require their physical presence to book them. The ability to make online travel and hotel reservations (eg. Agoda) and pay for bookings online at home or on a mobile device has spoiled Millenials to the point that they do won’t make a step offline. Travel companies have to make it easy for millenials to give them business, and that means intensive SEO, online advertisements, and social media marketing. It also means extensive promos on their website, and intuitive conversion process, including a secure payment process.
A peculiar development in the travel industry is the rise of sharing economy service providers. If you are wondering what those are, perhaps the names Uber and Airbnb will give you an idea. A few short years ago, these services were unheard of, but today they have private valuations of $62 billion and $25 billion, respectively. For those not in the know, Airbnb is a site where property owners can advertise rooms, apartments, or homes for travelers, often at a much lower rate than a typical hotel room, and often with amenities not available in regular accommodations. Uber is a similar service, but instead of rooms, they offer vehicles for rent for a short period, much like taxis. This type of “sharing” is much in keeping with Millennials that dislike cookie cutter travel, which is what hotels and car rentals offer.
Millennials are reshaping the travel industry, but this is not necessarily a bad thing. Far from being fickle, as some sociologists would like to characterize them, Millennials are actually quite predictable. They are easy to reach and they are easy to convince if it is done right. Travel companies that take the trouble to analyze their decision-making processes and cater to them are likely to score big points with 25% of the population of potential clients.