News and Insights
It’s All About the Experience – How Gen Z and Millennials Are Transforming the Travel Industry
June 15, 2022
After two years of social and cultural isolation, travel is booming back, with many travellers (especially from European countries with a seemingly strong grasp on the pandemic) keen to be surrounded by new people, cultures, and experiences once more. It is no surprise that Gen Z (born between 1997 and 2012) and Millennials (born between 1981 and 1996) – those broadly less concerned by Covid-19 – are at the front of the queues back to the airport.
But how can destinations, tour operators and others in the travel industry best tap into the needs and wants of these generations that will shape the future of travel?
AFFORDABLE TRAVEL IS PREFERRED BY GEN Z WHILE MILLENNIALS TRAVEL THE MOST
Gen Z is eager to get back to travelling (nearly two-thirds of Gen Z are planning “revenge travel”) and is planning trips to fulfil their desire to experience art, architecture, cultural events and new experiences (when planning a holiday, 31% of Gen Zs say that it’s important for them to experience a different culture, while 32% say that they are seeking a once-in-a-lifetime experience).
However, being a young generation, their spending power is correspondingly limited. While they spend a quarter (25%) of their budget on flights, monetary concerns hold them back from splurging on expensive accommodation. Though discounts and affordable travelling are appealing to most consumers, it is the main point of consideration for Gen Z when booking holidays. They look for reasonable packages, mostly from online travel websites. For this reason, travel experts have found that discounts and flexible options would encourage Gen Z to travel.
Separately, Millennials are driving growth in the industry as they are the ones who travel the most, with an average of 35 days of holiday per year. This generation does not mind spending extra if that translates to unique, authentic, and cultural travel experiences, preferring exotic and meaningful experiences instead of well-trodden destinations. Tourism packages that include various activities and cultural events are likely to engage this audience.
SUSTAINABILITY, DIVERSITY AND INCLUSION ARE ON THE RISE
Millennials and Gen Z are highly conscious about the environment – and plan to preserve it while travelling. In fact, two-thirds (67%) of Gen Z travellers consider sustainable travel options.
Alongside sustainability, diversity and inclusion are important to travellers, particularly those under 40 years, when choosing their travel destinations, according to Expedia Group.
Research from Orbitz, part of the Expedia Group, reveals that Gen Z is looking for companies that offer value through diversity and inclusion and are likely to research a destination that matches these ideals. Brands should be able to provide a safe and welcoming environment for LGBTQ+ travellers and facilitate a dialogue on representation to attract the Gen Z audience. There are opportunities for travel industry companies that demonstrate their commitments to inclusivity and sustainability, expanding their offerings to travellers of all ages and backgrounds.
GEN Z & MILLENNIALS: HOW TO REACH THEM?
Unsurprisingly, Gen Z is heavily influenced by social media. When booking a holiday, their planning and inspiration come from social networks. This generation is more flexible when choosing a brand and can rapidly switch to companies providing better services. They listen to their loved one’s opinions and carefully look at reviews when selecting a service. Gen Z is also highly likely to consult YouTube when making a purchase and 87% of them noted that TikTok is their favourite social media platform. Therefore, creating and promoting video content will attract these generations’ attention. Gen Z in particular is interested in gaining a learning experience during their travels. According to Criteo, travelling mindfully is greatly important to Gen Z as they value the importance of their impact on the world.
Millennials are attracted to incentives and promotions and are willing to share their personal details in order to receive these advantages. Contrary to Gen Z, Millennials tend to be loyal to the brands they appreciate and are less likely to try new ones. This generation is more likely to be persuaded by influencers’ media content, they value personalization and prefer travel focused on comfort, lifestyle, and cultural experiences.
And when it comes to booking, Millennials and Gen Z are frequent mobile users and digital content consumers who prefer to use online travel agencies compared to more traditional travel booking methods. The travel industry’s focus should be on enhancing the digital booking experience, allowing travellers to save time and cater for different holiday styles that destinations can provide. Local experiences and cultural activities should be promoted in line with consumers’ interests.
THE FUTURE OF TRAVEL
The travel industry has had to undertake rapid transitions as a result of these generations’ impact on the topic. Will Gen Z stay true to its values? Or will they become more disconnected from their ideals? Will the world of constant transformation change their travel views?
Similarly, it is clear that Millennials are driven by cultural experiences when travelling. However, will they be open to adapting their fixed preferences and evolve to embrace new travel opportunities?
Learn more about FINN Partners’ Global Intelligence capabilities and expertise.
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