The changing lifestyles and consumption upgrades of millennials and senior citizens are providing commercial opportunities within the reopening travel industry. There is growing interest for flexible options, sustainable travel, local experiences, and bleisure by millennials who are technologically and financially savvy. Meanwhile, adapting tourism products and services to target the elderly is a growing trend, as seniors tend to have strong appetites for travel and generally enjoy better health and purchasing power compared to decades ago. Our latest interactive publication, "The Changing Face of Travel", examines the generational trends that are changing the travel industry.
The largest generation globally, millennials have immense spending power, as they reach their prime earning years and inherit generational wealth. They also have a thirst for experiential living which could provide commercial opportunities aplenty to hospitality players who are able to capture the average millennial’s imagination.
This breakthrough could catalyse progress and change across industries. Utilising machine learning, AI parses through and analyses large datasets; generative AI goes a step further to create what appears to be original content, derived from the dataset they are trained on. This creates the opportunity to automate mundane, repetitive and less value-added parts of even white collar work, allowing humans to focus on delivering deeper insights and analysis.
As AI technology permeates through the economy, businesses that lag in AI adoption are likely to face increased risks of becoming less competitive. This interactive publication illustrates how generative AI works and the major sectors that would benefit from its adoption.
Visualising millennials by region
Source: MSCI: Data as of 2021 Values in circles represents the total millennial population of the region, and the corresponding percentage represents millennials as a proportion of the total population.
All aboard the hypetrain
Here are five ways millennials are reshaping the travel sector:
1. Increased influence of social media
The popularity of social media-influenced travelling is mostly concentrated amongst younger travellers. Social media platforms rank even higher than information from friends and family, as well as online search engines, as a tool for decision making.
The immersive audio-visual experience of social media lends itself particularly well to providing invaluable travel information. Many who have social media accounts have probably also experienced the network effect, where seeing photos and videos posted by family and friends while on holiday has stoked wanderlust and encouraged the viewers to venture out, too.
2. Demand for flexible options
Travel restrictions and uncertainties have contributed to what seems to be a structural shift towards shorter booking windows and more demand for flexible bookings. This is especially true for millennials, given that their world is one where change is the only constant.
Flexible payment methods matter to travellers too. Millennial and Gen Z’s mobile-first behaviour has resulted in the explosive growth in mobile payments and internet banking, and they naturally demand an array of payment methods – from “buy now, pay later” to mobile payments solutions – for convenience and to spread travel costs.
3. Sustainable travel
Travelling sustainably is also a crucial consideration for those below the age of 40.Many millennials and Gen Z travellers are interested in going on a vacation that has minimal impact on the environment in 2023.
4. Demand for local experiences
Unlike their predecessors, millennials and Gen Zs are more likely to spend money on experiences rather than on consumer goods. Many millennials enjoy being part of a narrative and weaving themselves into the tapestry of their travel destination, explain the popularity of experiential-focused travel sites such as Airbnb.
Millennials formed the dominant customer profile for Airbnb in the US in 2022
5. The rise of bleisure
Bleisure travel is a term used to describe travel that combines elements of both business and leisure.
Bleisure has seen robust growth and has become a new trend post-pandemic, driven by a growing number of flexible working/remote working arrangements.
Combining a business trip with leisure not only saves on travel costs but also creates better work-life balance, resulting in greater employee satisfaction and happiness.
The growth of slow tourism
On the other end of the spectrum, an ageing population is a long-term reality and will reshape the world’s economic, social and consumption outlook. The current generation of elderly generally enjoys better heath and purchasing power compared to decades ago, thanks to advances in medical technology and improvement in living standards.
Together with ample leisure time post-retirement, this means that the elderly will have a high appetite for travel, providing significant commercial opportunities for the travel sector. many travel agencies have tailored tours for the elderly, such as “slow” tourism which has more time for rest, staying longer and spending more time experiencing a place/tourism attraction.
Overall, players who are able to cater to different generational trends would benefit greatly as travel demand recovers from the pandemic.
