Which fast approaching millennial trends will affect travel industry?
Millennials are the trailblazers for new ways of booking travel – and these new trends are fast approaching.
For millennials, travel is no longer carefully planned and booked far in advance – it is an adventure that can happen at any time. They book these vacations in the spur of the moment, often for the span of only a few days, but repeat these trips many times in a year. Several factors cause this to be the case; for instance, social media is a major influence. Millennial consumers see friends and celebrities posting content about holiday destinations, creating a constant stream of inspirational images and videos.
Previously, younger consumers might have hesitated when it comes to expensive transportation costs. However, low-cost airlines have provided a means to get to their desired destination. Furthermore, sharing economy platforms like Airbnb offer a cheaper option, as well as a much wider choice of possibilities and access to locals. In addition, instant messaging apps and social media allow millennials to stay in touch with friends, parents and Airbnb hosts. Finally, Google Maps are, of course, invaluable, especially in foreign destinations. Overall, technology is transforming the way young people travel and this is set to have a major impact on the industry.
According to the 2017 State of Travel Report from comScore, young people's preferences differ significantly from the older generation. Broadly, this research suggests that the travel industry needs to adjust its marketing approach to accommodate the lucrative millennial market – and the time to adapt is fast approaching. Below is a summary of the findings of the report.
What the research shows
Millennials prefer peer review
The comScore report defines seven categories of website for leisure travel research. Millennials were far more likely to select review sites as their most trusted kind, with 19% citing these as their preferred research method. As such, millennials were twice as likely as Generation X and Baby Boomers to trust review sites above all others.
Millennials trust social media
Younger consumers are also far more likely to use social media to research leisure travel. A surprising 1 in 10 millennial respondents to comScore’s survey said that social media was their preferred travel research destination. This is a stark contrast with Generation X and Baby Boomers, of which a mere 1% use social media for travel research.
Millennials are moving away from suppliers
Compared to Generation X and Baby Boomers, millennials are far less likely to go directly to suppliers to research travel. For instance, a millennial is far less likely to visit the website of a package holiday retailer for vacation inspiration.
Mobile devices are leading the way
The age of the smartphone is fast approaching – in fact, it is already here. Unsurprisingly, millennials prefer to use mobile devices to book travel – of those surveyed, 73% used a smartphone to book leisure travel. Equally, many respondents had also used a tablet to book a vacation. In comparison, less than half of respondents from Generation X had used a tablet (47%) or smartphone (38%) to book travel recently. Amongst Baby Boomers, these statistics were even lower.
However, despite the prevalence of mobile device usage, many millennials said their preferred device was still a desktop. In total, smartphones accounted for 19% of digital travel spending and tablets accounted for 8%. However, this is four times higher than the share from 2014 and is greater than mobile’s share of all online retail sales, representing 22% of the market.
Less than half of the millennials surveyed said that car rental was their preferred form of transportation whilst on vacation, compared to 62% of Generation Xers and 69% of Baby Boomers. As would be expected, millennials tend to prefer ride-hailing apps like Lyft and Uber. When surveyed, 20% of millennial respondents said that ride-hailing apps were their transportation method of choice. Furthermore, millennials also said that they preferred ride-hailing apps to traditional taxis when on vacation.
What can travel companies do to successfully connect with the millennial market?
Most major airlines have accepted that they have to engage in the low-cost market. As a result, many have begun offering hand luggage only options and begun charging for refreshments on short-haul routes. However, there are still market gaps to fill; for instance, transatlantic and transpacific routes are still ripe for new offers. Flexible routes will entice millennials to travel, with affordable one-way and multi-city fares creating packages younger travelers are looking for. Moreover, destinations need to emphasize their experiential offers. For instance, traditional attractions like historic buildings and museums have less of a pull for millennial consumers. Instead, they look for music festivals, artistic events, or exciting new bars and restaurants.
A good case study for how a travel company has connected with millennial consumers is Royal Caribbean Cruises. In 2016, Royal Caribbean launched a major digitization initiative. This project aims to boost growth and attract a new generation of consumers in an industry largely dominated by older travelers. Considering that younger passengers expect a seamless digital experience, the cruise company made a significant investment in technology. Their first step was to unveil the 3D Cave, new a digital laboratory for ship design. This new department develops VR, facial recognition, and data capture tools to make Royal Caribbean ships the first 'smart' cruises.
These trends are fast approaching
In the travel industry, adaptation is key. Attracting and maintaining millennial customers is essential to increasing revenue. Companies need to augment their marketing approach to adapt to these trends to cater to this profitable market segment. Younger travelers are more likely to search for inspiration via mobile devices; however, desktop booking is still the dominant purchase platform. Therefore, companies need to deliver an integrated omnichannel experience. Imagery is especially influential on millennial consumers; therefore, businesses need to make sure they produce compelling, high-quality content. Moreover, they need to lead with unique experiences and activities featuring travelers their age. The time to adjust is fast approaching – and it is imperative that travel companies remain relevant.