How travel and tourism brands can help Millennials, a generation under pressure

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Travel isn’t just about hitting ‘escape’. Destinations and travel brands need to empathise with Millennials to help them build the life skills and experiences that they crave.

Earlier this month I outlined a number of reasons why the reality of life for Millennials in the mature outbound markets of Europe and North America isn’t as rosy as their Instagram feeds might suggest (view post: ‘Marketing to Millennials: Going Beyond the Schmaltz’)

In sharp contrast to much of the upbeat commentary about Millennials you may have occasionally stumbled across in the media, tried to shine a light on the darker reality for Millennials; the atrocious economic situation they’re faced with, career paths built on unstable ground, unmanageable debts and social-media induced anxiety about how everyone else is coping better than they are.

So why is life so tough for Millennials? As The Guardian put it earlier this year in its series about this generation, ‘it isn’t that members of Gen Y, with smartphones and cheap air tickets in hand, are about to edge back into the Dickensian workhouse. The tide of technology is not about to go into reverse […]. The concern is rather that all the old paths that allowed their parents to get ahead – careers with prospects, home ownership and decent pensions – are one by one being blocked off. Today’s young adults enjoy greater social, sexual and cultural freedom than any before them. But in hock to debts, to landlords and often unstructured work, the one freedom they are lacking is the freedom to make their own luck’.Youth-unemployment-cut

Of course, the reality for the vast majority of Millennials lays somewhere in the middle of the extremes painted by the media. Still, my argument in this post is that it’s wise to look beyond the ‘schmaltz’, show a certain empathy with the real situation of how young people are living today and to try and put forward solutions that really help. Fortunately, for a generation that is faced with the need to compete in the global workplace, enhance life skills, develop social intelligence, improve cross-cultural understanding and just gain more self-confidence with which to face the world, can you think of a better answer than travelling?

Faced with the rather depressing list of real-life elements that Millennials have to battle with, it can be hard to know where to start and to know which factors will be more relevant than others when trying to build that empathy into an engagement strategy. Some of those elements will offer more direct clues of what products or solutions could be offered, others will simply give pause for thought. Here I have offered some recommendations on how destinations and travel brands can react to some of Millennials’ emerging character traits.

Stop the world, I want to get off!

It’s no coincidence that the world’s major corporations are investing big money in learning how to recruit and retain Millennials. Why? Because the future of the world’s biggest companies depends not just on a steady stream of young customers, but bright young staff too. Yet this highly mobile, restless generation is wondering whether the 40+ hour week is really what they want from life. Search ‘Millennials’ and ‘work’ and it won’t take too long for you to find a lot of hand-wringing articles discussing how Millennials are a needy generation, craving instant job satisfaction, fast promotion, flexible schedules and a lot of hand-holding.

As the generation that grew up in the shadow of the global economic crisis, Millennials in the developed world have witnessed the traditional rewards of work – a decent salary, prospects for promotion, support from well-trained supervisors, and a pot of gold at the end of it all (ie. a good pension) – crumble away pretty fast. In other words, the existing model of study, steady job, healthy retirement has become a lot less reliable. Millennials Generation easyJetacross the developed world largely believe they are unlikely to earn more than their parents, hence for many –especially older Millennials who have had a taste of the world of work- this has given rise to the philosophy of ‘I may as well enjoy myself now’. This is a trend that I believe that easyJet has latched onto strongly with its ‘Generation easyJet’ campaign.

Heading into a highly competitive world of work

At the same time, research is showing younger Millennials to be quite serious, studious generation. Various speakers at the Youth Marketing Summit in London last year made it clear that the ‘sex, drugs & rock n’ roll’ youth stereotype is precisely a stereotype because it’s more relevant to today’s parents (Gen X and Baby Boomers) than to young people themselves. Instead, aware of the challenges of getting through endless school exams, winning a university place and then a foot on the job ladder, research presented at YMS showed younger (UK) Millennials to be a serious, nervous group, keen to take opportunities for improving academic knowledge, as well as the kind of soft skills that are likely to help them build self-confidence and give them the competitive edge in the jobs market.

Blurring the lines

As I described in my Toposophy guide to Putting Your Destination on the Millennial Map, bleisure travel (business + leisure) is firmly on the rise and it’s Millennials who are leading the trend. However, it’s especially common among a growing tribe of Millennials – ‘freelancers’, or putting it nicely, ‘independent contractors’. You’ve seen us, hunched over a laptop, nursing an over-priced coffee and refusing to budge from the corner of your local coffee chain (we’re in the corner because that’s where the ONE AND ONLY electricity socket is).

On a serious note, a combination of economic circumstances, technological change and personal choice has given rise to more and more independent contractors, and as automation and the on-demand economy continue their unstoppable expansion, this tribe is only set to grow. Putting aside for a moment the rather worrying question of what this all means for the future stability of work and social security systems, the start-up generation (yes, those ‘digital nomads’) is footloose and able to live and work where it suits them most. Avid users of sharing economy services and addicted to tech solutions, they tend to be highly influential and attract a trail of capital, so consider them as trailblazers for regeneration (and responsible for rising rents, everywhere from Berlin to Bucharest to Barcelona to Belfast).

Mobile devices: bringing those who are far away closer, and pushing those who are close further away

The smartphone has, without question, become the essential tool to getting through modern life. Social media has become the go-to place for news, advice, fun, gossip, planning and nurturing friendships. Unsurprisingly, younger Millennials (who had social media in their lives from an earlier stage than older Millennials) can get severe FOBO or ‘fear of being offline’, yet studies are also starting to highlight the effect of a life lived online.

As Skift’s Portrait of the Millennial Traveller (2016) observed ‘Millennials are also social-media-stressfamously known for being mobile and social media addicts. Yet many marketers are finding what they really crave is deeper real-life human connections when traveling’. Essentially, many, many young people today are lonely, yearning for face-to-face interaction with parents, siblings and friends who are able to offer the depth of support and compassion not available through digital connections. I believe that while separating people (especially young people) from their devices is neither practical nor desirable, many people of all ages are now seeking (craving) experiences that put personal connections (fun, recreation, communication) first with technology taking a back seat.

It goes without saying that whether through structured or un-structured situations, travelling provides so many different ways for Millennials to re-connect with loved ones in person, make new friends and practice the ‘social intelligence’ skills that can boost their confidence and be of real use in finding a job and surviving in the world of work.

Selective spending

And now for the big question… money.

In my last post I painted a portrait of a cash-strapped generation that’s under pressure from the high cost of rent, student debt, wage stagnation and much else. You might be forgiven for thinking that travel would be relegated to the bottom of the priority list for spending, but then think back to my first point – this is the YOLO generation and the money that’s not going towards houses, cars, redecorating, new TVs, high-end fashion and savings (pension? what pension?), is more often than not being spent on experiences, rather than material things. Combine this desire with the ability that the internet provides to break down and then pick and choose every experience during a trip, this gives the effect of what Josh Wyatt from Generator Hostels calls ‘curated spending’ (source). This means that for a generation less attracted to the notion of conspicuous consumption, it’s perfectly socially acceptable to carefully mix budget and luxury along the journey if it means getting access to the type of experiences that will bring personal satisfaction, and strengthen the Millennial customer’s brand on social media.

QUICK TIPS:

What does all the above mean when it comes to targeting Millennials?

  • Understand what your product or destination really means for Millennials in terms of where they at in their lives. Is it for a quick escape or a long-desired career break?
  • Understand that these escapes can come at any time (check out my post about Last Minute Leisure). Consider where Millennials are gathering their inspiration for life-changing journeys and consider where you are (and where you need to be) on their path-to-purchase.
  • Understand that Millennials don’t compartmentalise work/study/leisure/fun, especially where travelling is concerned, so you need to adopt the same mentality. See the section on ‘bleisure’ travel in my Toposophy guide to ‘Putting Your Destination on the Millennial Map’
  • Hard experience builds soft skills. Highlight the value of offline experiences, and how your destination or brand makes those truly special. What opportunities do you offer to meet local people, make friends (or romance), or re-connect with loved ones? How can you help Millennials towards their goals of self-improvement?
  • Drop old pre-conceptions about budget vs. luxury travellers. Millennials are less and less consistent in that regard. Instead, consider how your product, service or destination is ‘unique’ and how it will help strengthen the traveller’s ‘personal brand’.

Looking for more ideas, or want to chat about these insights? Talk to me via @genctraveller

Millennial marketing: Going beyond the schmaltz

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For Millennials, life isn’t as rosy as you’d think

Sorry to shatter the illusion, but unemployment, spiralling debt, careers without prospects, the generational wealth gap, social-media induced stress and general life-anxiety also affect Millennials’ consumer decisions and by extension, their travel behaviour.

When it comes to writing observations about Millennial-aged consumers, there’s a tendency to accompany such writing with a filtered photo of happy, good-looking Millennials. They’re usually of diverse backgrounds and sharing a joke around a picnic table or, of course taking a group selfie. They’re all wearing big smiles, have perfect teeth and simply ooze health and prosperity (spoiler: they’re stock-photo models).

You know the type of images I’m talking about, and maybe like me you’re also guilty of using them in your presentations when trying to capture the essence of ‘Millennials’. It’s an easy trap to fall into, and to be honest these days I try to keep them to a minimum, in favour of illustrating the diversity of this generation and the different stages of life they pass through during this crucial period of their lives.newsimg_deb-green-deal

Which brings me onto the subject of this post: namely, that not everything is perfect for this generation, in fact far from it. Therefore in order to be effective at communicating with Millennials, you have to understand the bad stuff that’s happening to them, as well as the good.

Before I go any further, I want to highlight a point that must be understood properly if we’re going to understand Millennials’ consumer behaviour in a proper, measured way. That is: not all Millennials are the same.

During my presentation ‘Six Trends that Will Change the World’ at WTM London last year I illustrated this point in different ways. Between the ages of 18-35 you can go through the gruelling obstacle course that is school, part-time work, university/college, internships, first major romantic relationships and much else. Think of Millennials who you know, and you can quickly see how diverse they are. There is also a significant difference between the life events and of Millennials from different countries especially between Millennials from mature and emerging outbound markets.

These similarities and differences between Millennials were neatly outlined by Robert Guest in The Economist in January 2016: ‘All generalisations about such a vast group should be taken with a bucket of salt. What is true of young Chinese may not apply to young Americans or Burundians. But the young do have some things in common: they grew up in the age of smartphones and in the shadow of a global financial disaster. They fret that it is hard to get a good education, a steady job, a home and—eventually—a mate with whom to start a family’.

Furthermore, last week Deanna Ting published a very good article in Skift, asking ‘Do Millennials Really View Travel Differently?’ The article was posed as ‘a daring thought’ and suggested that actually Millennials’ attitudes really aren’t that different to those of previous generations that the same stage in their lives, and that other generations are quickly starting  to adopt similar patterns of consumer behaviour to Millennials. It also suggested that for this reason it might not be worth the time or effort of catering to Millennials specifically. I would argue that actually Millennials’ worries are some of the key characteristics that define this generation’s consumer habits and, by extension, their travel behaviour.

So where did it all go wrong?

Over the past decade, Millennials growing up in the more mature outbound markets of North America and Europe have, to a greater or lesser extent been affected by the following:

  • High levels of unemployment. During the crisis, unemployment among younger people rose faster than it did for older adults.
  • Unstable career paths: Careers, especially those traditionally considered ‘safe’ in the public services are becoming characterised by uncertainty, wage cuts and poorer conditions
  • Rising cost of higher education: For many young people graduating in the US or the UK it is now normSmashing-Piggy-Bankal to be in five or event six-figure debt before starting a first job. Debt repayment is also to be factored in with the higher cost of living

 

 

 

  • Unstructured work: Young people are disproportionately subject to short term employment, zero-hours contracts, dependence on internships or the need to raise income through the on-demand economy (short term accommodation, car sharing, food delivery etc). This has the effect of making earnings unreliable, and incomes unpredictable.

 

  • Pensions are in crisis: For many young people, a pension is the last thing on their mind as they struggle to meet rental costs, repay student loans or a rising cost of living. Many companies have also shut generous final salary pension schemes, leaving Millennials to make their own arrangements (which many are not)

 

  • Wage stagnation: Even during the current (apparent) economic recovery, wages have remained stagnant or have not risen in line with inflation

 

  • High cost of borrowing: This has made it much more difficult to purchase the large-ticket assets (such as houses or cars) that their parents were able to obtain at relatively lower cost at the same stage in their life

 

  • Drastically-reduced supply of affordable housing: In the major cities where better jobs are to be found, rising demand and falling supply (as houses are bought and let out on the market by baby-boomers) has had the effect of pushing housing beyond the reach of young professionals, and increasing the cost of renting, which in turn reduces the ability to save for a deposit. Hence the label ‘generation rent’

 

  • A vanishing pot of gold waiting at the end… As baby boomers live longer, governments are expecting them to take on a greater burden of paying for their own care, which reduces the amount or even likelihood of inheritance for Millennials

Against this backdrop, is it any surprise that Millennials are showing deeper levels of stress and anxiety? As I’ve explained in my post on happiness and Millennials, there are lots of theories about quite what is making Gen Y (at least in the Western world) such an anxious and apprehensive generation.

Is it all down to the economic crisis? Perhaps it is social media and #FOMO (fear of missing out) that it creates?  Or maybe it’s school exam systems or busy parents who don’t have the time to sit down and talk about it all? Growing up in the era of 24-hour news and social media has also made Millennials more aware of how the global economic crisis could affect them in terms of job prospects and future financial security.

Of course feelings of uncertainty and insecurity about one’s identity and the wider world has always been part of growing up. But then previous generations didn’t face quite the same anxieties over peer job prospects, debts, body image, school grades, and everything in between that young people face today.

While social media is a great connector it often helps to reinforce, rather than reassure young people about those anxieties. Some say that it has, in effect replaced the traditional social settings (such as bars, clubs or associations) where people used to mingle for news, gossip, advice and support.

On that dark note I’m going to bring this post to a close. Next week I’m going to discuss some of the ways in which the economic scenario I’ve described is affecting Millennials’ consumer behaviour, and how travel brands can react to this challenge.

Millennials just want to be happy. So what is the ‘industry of happiness’ doing about it?

"Her Flying Red Shoes"  by Faisal Akram (Source: Wiki Commons)
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Research on Millennials consistently points to their desire to attain happiness ahead of the other priorities in life. This opens up a golden opportunity for the travel and tourism industry.

There are lots of theories about quite what is making Gen Y (at least in the Western world) such an anxious and apprehensive generation. Is it the economic crisis? Is it social media and #FOMO (fear of missing out) that it creates?  Perhaps it’s school exam systems or busy parents who don’t have the time to sit down and talk about it all?

Of course feelings of uncertainty and insecurity about your identity and the world around you has always been part of growing up. But then previous generations didn’t face quite the same anxieties over peer pressure, body image, school grades, job prospects, debts and everything in between that young people face today. And yes, while social media is a great connector, it often helps to reinforce, rather than reassure young people about those anxieties. At the same time,  growing up in the era of 24-hour news and social media has made Millennials more aware of what’s going on in their immediate community of friends as well as major events further away. This has produced a generation that’s more fired-up about global issues and ready to step in to participate than their parents were. At the same time, it has made this generation (and their parents) acutely aware of how the global economic crisis is affecting them, and could affect them in terms of job prospects and future financial security.

Under pressure

"Her Flying Red Shoes"  by Faisal Akram (Source: Wiki Commons) So it’s not surprising when research like Voxburner’s Youth Trends 2015 (covered here by my friends at ICEF Monitor) highlights  a generation that feels under pressure to “succeed in life’ (79% of 16-24 year olds), or is worried about being financially stable (75%) or able to find a good career (73%). When Viacom asked Millennials around the world ‘will you earn more than your parents in the future?’, in Australia only 15% of 15-24 year olds, and 17% of 25-30 year olds thought that they would – and that’s in a country which did pretty well during the crisis years. Across the developed world the global economic crisis has produced real wariness over what the future holds. Today, even an expensive education doesn’t automatically lead to a well-paid job with good conditions.

– How do you define success?

– ‘Being happy’

In the face of this uncertaintly, Millennials are adjusting their expectations from life. I think that’s what’s behind the number one response that Millennials gave in the Viacom survey when asked ‘How do you define success?’. By far the top answer was ‘being happy’ (73%) followed by ‘being part of a loving family’ (58%) and much further ahead than material things such as ‘being rich’ (36%) or ‘driving a nice car’ (just 5%). Perhaps this generation has started to realise that with the best will in the world, top jobs are tough to get (and not always pleasant), fame can be more trouble than it’s worth, and flashy cars and homes don’t impress their peers like they used to in years gone by.

Travel is the antidote

Insights like this can teach us important lessons about this generation’s priorities when it comes to travel, and how travel marketers can respond. In the first instance, there’s a big opportunity to position travel as the key to attaining that happiness, ahead of other big purchase decisions on property or cars. In essence, this means converting the ‘dreamers’ into ‘travellers’, making sure your destination is front-of-mind when that conversion happens. This challenge was highlighted by Sally Balcombe, CEO of VisitBritain in her recent interview with Skift in which she made it clear that ‘creating the urgency to visit now’ is something all DMOs are looking to do in a crowded marketplace. In 2013 G Adventures surveyed over 2300 people and found that nearly 3 in 4 respondents said that travel was more vital to their happiness than getting car, a house, having a baby or getting married. This sounds like the Millennials talking!

The same survey also found that it’s ‘new experiences’ that make travel so pleasing. This points to another important lesson – that while this generation might be stressed, the answer doesn’t necessarily have to be relaxation. Remember we’re talking about the youth market here, so highlighting adventure, action, curiosity and fun is essential.  It’s all about disconnection from stress through the experience of trying new things, meeting new people and learning new skills. It’s important not to undervalue the value of travel in teaching new skills and boosting the confidence of an anxious generation looking for reassurance, something I’ll address in my next post.

With all this in mind, perhaps it’s time to consider how your brand proposition is really speaking to this generation and offering the promise of happiness, in whichever form that comes. When we read about Millennials and travel, we tend to read a lot about their use of technology, their love of social media and a funky hotel, but it’s important to remember that there’s a much wider bank of knowledge available on the Millennial generation’s emotions, life experience and anxieties that can help us to develop the products and create the marketing messages that will really hit the right notes with Millennials.

Putting it into practice

In my work with tourism boards and travel brands I make a point of widening the focus to what else is going on with Millennials as this helps them to gain a wider perspective on what this generation is about and use this as a starting point to think more carefully about the products that they’re offering.

I look forward to coming back to this subject in future posts, and if you’re interested to learn more, just drop me a line via Twitter @genctraveller 🙂

 

Travel and Tourism in Japan: Back to the Future (2 of 2)

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Welcome to my second of two blog posts about my recent visit to JATA Expo and travelling in Japan.

In my last post I discussed some of the ideas that emerged from the opening session of JATA Tourism Expo 2014, particularly as the authorities in Japan seek to learn lessons from former Olympic hosts on how to boost tourism with the aid of the Games. Here I share some of my personal observations abIMG_1514 out Japan’s own preparedness for the Games, which are only six years away.

Every host has its own challenges to overcome in putting on the Olympics, even if they don’t always admit openly to what those challenges are. Given the huge numbers of international visitors that an Olympic Games attracts, the tourism sector in any country represents the face that visitors see (beyond the glitter annd fireworks of the opening ceremony), and is expected to play its part in overcoming these challenges, preparing for the rush, often years in advance.

On this first note, it was interesting at JATA Expo to observe the patriarchal language of the Japanese authorities (‘we will create a master plan, and it will be implemented’) against the more sanguine reflections of Chris Rodrigues of VisitBritain and John O’Sullivan of Tourism Australia: ‘this is what we thought would happen, but things turned out differently, and that’s OK…’)

Secondly, in terms of source markets for Japan in the coming years, it’s clear that Japan needs to continue to nurture its emerging markets, directing what it has to offer at the markets that are showing greatest promise, while remaining true to the qualities that have helped the country beat its own records in arrivals growth over the decades. In Asia especially, Japan is seen as the home of ‘Asia cool’ and this is partly why, as Hideki Tomioka of the Japan National Tourism Organization explained to me, Japan puts a lot of effort into targeting a younger audience in Asia in its marketing campaigns.

Korea is closer than you think

Thirdly, the Japanese can’t ignore that Korea is a close competitor in this ‘Asia cool’ market, so it’s up to Japan to do everything it can to convert those aspirations into bookings by making the most of its big modern cultural assets (music, fashion, film and TV, manga….), and putting its own young people at the heart of this process.

Street performers in the thriving, youthful South Korean capital

Street performers in the thriving, youthful South Korean capital

Having visited Korea the week before my arrival in Japan, it was striking to note the differences in what the two countries had to offer ‘Gen C Travellers’ (the connected generation), especially those towards the younger end of the spectrum. In the streets of Seoul, the smartphone rules. Millions of young people flow through the streets and the metro with their Samsung in hand and Beats headphones in their ears, on an even greater scale than you’d typically see in London or New York. With 4G and Wi-Fi in every corner of the city, the smartphone offers the answer to all needs.

 

 

Back to the future

Tokyo isn’t the same. Sure, there are smartphones around but it’s been more than a decade since I’ve seen so many flip-open mobile phones (not to mention fax machines or payphones!). Wi-Fi isn’t as easy to find as you’d think, especially outside of hotels. Instead, a whole array of complicated and expensive mobile phone rental schemes exist for overseas travellers wanting to stay connected throughout their stay. Over 80% of Japanese travellers still book their trips via phone or in person at traditional travel agents. When arranging check-in for some hotels in the south of the country, we were asked to fax our itinerary in advance!

In short, the country which was seen from afar as being at the forefront of technological innovation in the 80s and 90s appears now to be frozen in that very period.

Who rules the roost

The demographic composition of the delegates attending JATA Expo (especially those who were in charge) also demonstrated firmly that it older men who dominate all the major positions in the biggest travel corporations, not to mention the quasi-state corporations of Japan Travel Bureau, Japan Rail and so on. That may not be surprising to those who know Japan well (and Japan certainly isn’t alone in Asia, or in the world in this regard), but I wonder how much Japan’s strict adherence to this system stifles the kind of innovation that the country’s tourism industry needs in order to present its freshest and most appealing face to the world, especially younger audiences across Asia?

In my experience, Japan is a fascinating country to travel in (not least because of some of the factors I highlighted above) and without doubt, the Japanese exquisite attention to detail and genuine, heartwarming customer service more than makes up for frustrations about not being able to get a fix of Facebook every so often!

The questions I raise in this article are more about the structure of the travel industry in Japan and whether the country can really learn from what works elsewhere in order to help keep visitors satisfied.

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OUT NOW – The Rise of the Young Asian Traveller

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It’s onThe Rise of the Young Asian Travellere of the most exciting projects I have managed this year, and the result of contributions from leading tourism industry thought leaders in Asia and nearly three thousand young consumers across thirteen countries in the region. I’m proud to announce that ‘The Rise of the Young Asian Traveller’ is released today by the Pacific Asia Travel Association!

What’s the context?

The rapid emergence of Asian economies and the subsequent accompanying boom in travel has attracted the attention of the global travel and tourism community, as well as countless others. In recent years the sheer number of outbound travellers from Asian countries combined with their well-documented spending power has made an impact beyond Asia and the Pacific region, as destinations in all other regions race to understand the Asian traveller and adapt their products and services accordingly.

The Rise of the Young Asian Traveller, released today by the Pacific Asia Travel Association (PATA), explains how and why it is predominantly young people who are fuelling this growth, looking to explore the world beyond their country’s borders.

I am the author of this report, and for three months in early 2014 I was assisted by a talented team at PATA Headquarters in Bangkok. Research of this kind is extremely rare, with scant coverage of this region which is undergoing a tourism boom. It was great to learn first hand about the shape that youth travel growth is taking, through online surveys and focus groups.

In line with PATA’s ‘Next Gen’ strategy, the report is intended to help tourism industry professionals around the world to understand the importance of engaging with young people, both as consumers and employees in the travel and tourism industry, and to give them an understanding of the power of the young Asian traveller to shape global travel and tourism in the years to come.

What’s in the report?

The report gives detailed information on the background to the boom in Asian youth travel

The report describes in detail what is behind the boom in Asian youth travel and makes forecasts on future development

Nearly 3,000 travellers between the ages of 15-34 participated in an online survey distributed across 13 countries in Northeast and Southeast Asia including China, Korea (ROK), Japan, the Philippines, Thailand, Vietnam, Indonesia and Malaysia.

Crucially, in addition to this valuable data, I have gone the extra mile by explaining what’s driving the trends it describes with articles and invited commentary from industry experts. These include:

  • Why youth travel does not always mean ‘budget travel’ in Asia
  • What the leap to mobile technology will mean for travel providers across the region
  • How low-cost carriers have capitalised so successfully on the youth market across the region
  • Why the most sophisticated tourism boards look to attract students as well as leisure travellers
  • Who exerts the biggest influence on young Asians’ travel decisions
  • Why it is important to start reaching the next generation of your brand’s consumers today

PATA CEO Martin J. Craigs said, “This report highlights very effectively why Asia’s top destinations and tourism brands need to sit up and take notice of young consumers and their travel tastes. Today’s young travellers will very quickly become business and family travellers, so it is important to show them your trust and loyalty from a very early stage”.

PATA Members of certain categories are able to access the full report free of charge, while others will be able to purchase it for a fee. Take a look at the Executive Summary to find out more.

In future posts I will discuss the implications of the report and how its findings will prove useful to brands and destinations of all sizes in reaching the next generation of Asian travellers.

Defining Millennials

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In order to make products and services appeal to specific groups of consumers, marketers frequently classify consumer groups according to certain characteristics, of which age is a common denominator with labels applied to different generations. Assuming that people start to make independent consumer decisions once they reach their late teenage years as they start to acquire some degree of financial independence, ‘Millennials’ are currently the youngest generation of independent consumers.

Among the first to use the term ‘Millennials’ were William Strauss and Neil Howe, whose 1991 book, Generations: The History of America’s Future, 1584 to 2069, was widely recognized for its contribution to the analysis of cohort differences in U.S. history and their potential impact on the future. In Millennials Rising: The Next Great Generation, published in 2000, Strauss and Howe focused on those born in or after 1982.

Today the Oxford Dictionary neatly describes Millennials as ‘those people reaching young adulthood around the year 2000’ while resource site LiveScience offers the following, more detailed explanation:What is Gen C?

‘The term Millennials generally refers to the generation of people born between the early 1980s and the early 2000s. Perhaps the most commonly used birth range for this group is 1982-2000. The Millennial Generation is also known as Generation Y, because it comes after Generation X — those people between the early 1960s and the 1980s. It has also been called the Peter Pan or Boomerang Generation because of the propensity of some to move back in with their parents, perhaps due to economic constraints, and a growing tendency to delay some of the typical adulthood rites of passage like marriage or starting a career’

Descriptions of their behaviour or the phenomena of their time (the predominance of the Internet in daily life, the global economic crisis, the election of President Obama) are never far away when defining Millennials. The Urban Dictionary is much more searing (and funny) when it comes to describing Millennials’ personality traits. Some contest that the ‘Millennial’ is dead as a concept – you can check out more about that theory and my response to it here.

The diagram above takes in the widest definition of the Millennial generation in terms of birth years and ‘consuming years’. These children of Generation X and the grandchildren of the post-WWII generation are already starting to have their own children, and already the labels ‘Gen Z’, followed by ‘Gen Alpha’ are being tentatively applied to these consumer groups of the future.

Travel products and services for the Millennial generation

In the context of travel and tourism, ‘youth travel’ has traditionally been applied to the industry that has built up around the needs of the younger traveller, however it’s not a clear concept to grasp for those looking to cater to a specific generation of consumers who have such game-changing characteristics as this one. For this reason ‘Millennials’ and ‘Gen C’ serve as a particularly useful label for the current generation of young travellers.

Besides, the products and services that have built up to serve young consumers are now being avidly consumed by older generations too, raising questions over the term ‘youth travel’ as an effective label for travel products aimed at this consumer group.

A generation that’s changing the rules of the game

One thing is for certain, and that is that the Millennial a generation comfortable with disrupting the norm. Being the first generation to have grown up in the era of ‘internet everywhere’, Millennials are highly connected, technologically advanced and globally conscious and far more open to trying out new products and concepts than their parents or grandparents ever were.

This is partly why the sharing economy – a phenomenon which is tearing up the rule book for traditional tourism providers in particular – is flourishing as Millennial consumers flock to benefit from the value and convenience it offers for accessing a whole range of products and services.

Travel, tourism and the Millennial generation: learn more

In future posts I’ll be discussing the approaches that travel brands have made towards targeting the Millennial consumer and asking how effective they are at appealing to the masses of Millennial consumers out there.

Millennials overtake Generation X in vacation spending, says US survey

US Dollars
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Last week various news channels reported on a new study by MMGY Global on Millennials which revealed to general US Dollarssurprise that the 18 to 35 age group has overtaken baby boomers in their travel spending.

The study revealed that:

  • They are expected to spend incrementally more on travel services than any other age group over the next 12 months, well ahead than any of the other generational cohorts: an average of $887 on a previous-year base of $4,499
  • 24% of Millennial travellers are planning to take more overnight leisure trips in the next 12 months. This compares with a negative net difference of 1 percent for Boomers, and negative net differences of 3% and 6% for Matures and Xers, respectively
  • Millennials (those between the ages of 18 and 35) will be the driving force behind the continued recovery of the U.S. travel industry.

Comments by Steve Cohen, vice president of MMGY Global, were particularly telling: “Six in ten Millennials would rather spend their money on experiences than material things. This is presumably one of the reasons we’ve observed the spike in their intentions with respect to leisure travel in the year ahead. The implications for destination and travel-service marketers are quite profound, as Millennials’ planning, booking and sharing habits are significantly different from those of older leisure travellers.”

The results of the survey were based on a national survey of 2,550 active leisure travellers who reside in households with an annual income of $50,000 or more and who have taken at least one leisure trip of 75 miles or more from home during the previous 12 months on which they used overnight accommodations. The sample is balanced by statistical weighting to ensure the data are representative of all active leisure travellers in America who meet the target profile, according to the study authors.

My take:

The study focusses solely on the attitudes of consumers in the US and takes in quite a broad interpretation of leisure trips as those involving one overnight stay more than 75 miles from home. Nevertheless, the findings are revealing and will help to focus minds in the travel industry towards addressing the needs and desires of the next generation of travellers.

To those of us who have studied the Millennial generation and advocated that it is worthy of serious and urgent by the global travel industry, it comes as no surprise that the study found ‘Millennials will become the driving force behind the continued recovery of the US travel industry’.

The difficulty of measuring consumer spending

Data on spending among travellers is notoriously difficult to define and capture since the money that travellers spend often months before, then during, then after their travel can reach across so many sectors of the economy. Since spending can be spread over a period of many months in planning and carrying out travel, consumers can’t always be relied upon to provide accurate recollections of where and how they spent their money.

So while online bookings and the use of mobile technology on the go have helped in capturing data on (especially younger) travellers’ habits, to date these channels have only tended to show one side of a very complex story.

The MMGY study is especially interesting because it compares spending across age groups, rather than focussing on the behaviour of one group in particular, allowing for a genuine assertion that Millennials really are worthy of attention as consumers: especially consumers of tourism and travel products.

Concern about the future

Stories of Millennials’ increased spending power might contrast somewhat with reports about this demographic’s concern that they’re not saving enough and are worried about their future finances (see this news from a recent TD Bank study). However I would argue that it’s all a question of priorities; this really is a generation that lives for the moment and is having to do so with intensity, aware that the future may not be as bright for them as it was for their parents.

However well Millennials are saving for the future or not, when it comes to tourism marketing and management, in the end it is high spending that grabs the headlines and thus decision makers’ attention in the industry. Expect more headlines like this as Millennials’ transition into consumers of family and business travel products increases.

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