CBInsights’ report points out how the millennials will travel
CBInsights report on the 12 industries highlights that travel and camping experiences will serve as the trends of the future. A look at how these segments will benefit from Generation-Y
Millennials are one of the largest generations in history, and they’re on the cusp of their prime spending years. These are the industries that stand to benefit the most. Over the next few decades, Generation Y will enter its prime spending years — and it’s set to receive $30T in wealth from baby boomers and Gen X. This transfer of wealth has already begun transforming a range of industries. Some industries benefiting from millennials’ increased spending power, such as travel, reflect well worn Gen Y tropes like the general preference for “experiences” over things.
However, these industries won’t thrive unchanged. The companies that will come out on top are those that are reorganizing and reprioritizing around Generation Y. This means they’re embracing changing preferences to offer more sustainability, affordability, and flexibility in their products and services. They’re also embracing new technology and the unprecedented discoverability and customer connections it allows. Here are the two of the 12 industries that will thrive.
Camping or glamping
Camping has enjoyed significant revenue growth over the last several years, largely thanks to millennials. Total wholesale camping equipment sales rose above $2.5B in 2018, up from less than $2B in 2013. Also in 2018, nearly 80M American households went camping — a new high. According to Kampgrounds of America, an association of almost 500 North American private campgrounds, “aggressive growth” is largely attributable to an influx of younger campers, who are camping in larger numbers and camping more often.
• Last year, 56 per cent of all new campers were millennials (up from 51 per cent in 2017), and 41per cent of total reported campers were millennials.
• Another force driving the growth of camping is the popularization of new accompanying experiences that offer greater comfort and amenities. These can help mitigate challenges like finding a campsite, dealing with bugs, and safety. They can also make a campsite more family friendly, with additions like basketball courts, themed weekends, satellite TV, and full-featured bathrooms.
• Of the 1.4M households that began camping for the first time in 2018, almost 60 per cent preferred cabins, recreational vehicles, and other “glamping” amenities to sleeping in tents.
• Technology is helping millennials learn more about camping and find camping experiences. Virtually all campers reported bringing their some kind of tech device with them camping, primarily in case of emergencies or to research safety issues.
With an appetite for meaningful travel experiences and access to new online platforms that make customized travel easy, millennial travellers are looking to cut out middlemen and invest in their own bespoke travel experiences — without paying a higher cost. This has triggered a reorganization of priorities for an industry that has long focused primarily on appealing to baby boomers, a retired and relatively deep-pocketed demographic with plenty of free time. However, millennial consumers have proven just as keen to see the world as their parents and grandparents.
Listed below are key findings on Travel:
• An AirBnB study from 2016 showed that many millennials prioritize saving for their next trip over paying off debts or saving to purchase their first home.
• Another found that 21% of millennials would accept a lower salary if it meant they could travel more frequently.
• The majority of Generation Y would even be willing to sacrifice their Netflix subscription, coffee, alcohol, carbs, in favour of travelling, according to Forbes. But while millennials are just as eager to see the world as older travellers, their tastes are markedly different, and traditional vacation packages are unlikely to meet their high expectations.
• Many are turning their backs on traditional guided sightseeing tours and bus excursions in favour of more authentic travel experiences.
• Travelling millennials want to find hidden gems and local favourites that capture the true essence of a destination. Services like Airbnb and VRBO directly appeal to this, eschewing traditional hotels to allow tourists to live like locals.
• The ubiquity of price comparison apps and the convenience of e-commerce are making it easier than ever for frugal millennial travellers to find great deals, and 85% of millennial travellers check multiple sites before making a commitment.
• As with many industries in today’s information economy, millennial travel trends are strongly influenced by social media.Research finds that 87% of millennials on Facebook use the site for travel inspiration, making it the most influential social media platform for Generation Y travellers thinking about their next trip.
• In addition, 82% of millennial travellers said they considered user reviews an important factor when planning a trip, and 76% decided upon a destination based on the recommendation of a family member or friend.
• While the combination of millennials’ high expectations, budget conscious mindset, and desire for authentic experiences poses unique challenges to traditional travel businesses, it also means greater opportunities for companies ready to cater to Generation Y’s discerning tastes.
• As fastidious planners and price conscious consumers, Gen Y travellers are likely to prefer third-party platforms and marketplaces where they can more precisely customize their experience.
• Chain hotels looking to regain market share lost to emerging accommodation marketplaces will need to either embrace this millennial preference or find another way to attract millennials back to their businesses.