What makes millennials, Gen Z tick in travel?

What does it take to win a millennial's heart, mind, and wallet?

The recently released publication, New Horizons IV: A global study of the youth and student traveller, has revealed six trends for the under-30 travel market, the millennials and Generation Zs.

The report is based on the New Horizons Survey, which is conducted by WYSE Travel Confederation every five years. In 2017, the survey had more than 57,000 responses from 188 countries and territories.

Travel splurging
When the New Horizons Survey asked millennial and Gen Z travellers what they were willing to splurge on during their trips, they were clear about their preference for experiential purchases.

Thirty-seven percent of respondents were willing to shell out extra cash for food and drink experiences. Traditional travel luxuries, such as airfare upgrades, were favoured least.

The 2017 New Horizons Survey also revealed a 26% jump from 2012 in the level of activities young travellers undertake while in a destination. As such, adding unique, one-of-a-kind experiential elements to the basic travel journey might be more productive than trying to develop premium travel products aimed at millennials.

Those who journey beyond their home region reported being happier than those travelling within

Growing information intensity and utilisation of OTAs
The number of different information sources used to research the main trip has climbed steadily, from three in 2002 to more than 10 in 2017. Friends and family were still the most used information sources in 2017, but the importance of social media and comparison or referral websites grew significantly from 2012.

A decade ago, physical travel agent offices took over 70% of youth travel bookings – in 2017 much of this business had shifted online, either directly to suppliers or via OTAs.

Hence, new media and booking platforms will be crucial travel planning resources for the next generation of youth travellers, Gen Z. These digital natives have grown up with smartphones and Wi-Fi and are significantly less likely to use tourist information offices or tour operator brochures. Nearly 75% of Gen Z respondents made at least one booking via smartphone in 2017.

Top destinations for young travellers
Although the top destinations remain largely the same as in 2012 and 2007, a few noteworthy shifts are revealed in the survey. While the US remains the top destination for young travellers, it lost some of its share from 2012. Also, Australia came back into the top 10 for the first time in a decade.

Young people are still interested to visit the US, but they are also deciding to explore other less-visited destinations. Given the slight decline in long trips of 120-plus days and an increase in shorter trips, longhaul destinations will need to rethink how to attract young travellers undertaking longer stays for study, working holidays, au pairing and other cultural exchanges.

Rise of digital nomadism
In 2017, only 0.6% of millennial and Gen Z travellers labelled their travel style as ‘digital nomad’ over more traditional labels such as ‘backpacker’ or ‘traveller’. However, 0.6% of all youth travel represents 1.8 million trips.

Digital nomads manage their location independence by making extensive use of Airbnb (56% used on their last main trip). They are the most likely group to book their air travel via computer, smartphone or tablet (85%) and they often use OTAs to book accommodation (55%). Digital nomads are thrice as likely to use a co-working space than other travellers.

The digital nomad is beginning to transform some destinations. More co-working spaces are springing up and high-speed Wi-Fi is a given. Although still small in numbers, digital nomads have an influence on other young travellers through blogging travel and lifestyle advice.

The three keys to millennial and gen Z traveller happiness
Millennial and Gen Z travellers indicated three significant factors in their travel happiness: destination, trip length and activities.

Traveller happiness hits fever pitch at one month, however, travellers also reported an uptick in happiness on trips from three to six months’ duration. The 2017 New Horizons Survey found that the more in-destination activities and experiences people have while travelling, the happier they are. Trips to Mexico, Japan, Indonesia and Peru make millennial and Gen Z travellers the happiest.

Travelling to a different world region and for a longer period seems to lead to greater levels of happiness for young travellers. In general, those travelling outside of their home region reported being happier than travellers on journeys within their home region.

Generation Z is the future of youth travel
Gen Z is already on track to become the largest generation of consumers by the year 2020. These digital natives are bringing their own flavour to the youth travel market. For example, Gen Z is just as likely as Gen Y to make online bookings. However, they use OTAs and third-party websites less. Gen Z travellers are also more social than millennials and more likely to want to connect with locals.

Gen Z already seem to be more activity-focused than millennials. The use of social media for information searching and booking is also likely to increase and morph as new channels emerge.

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