Generation Y: Soon-to-Be Your Next Best Customers

12 July 2011

By Nicole Petrak, Assistant Editor to AdventureTravelNews & Special Projects for ATTA

Assistant Editor's Note: This piece is the second of three installments for the ATTA's third quarterly trends reports for 2011. The first is Content: Where Media and Commerce Intersect in the New Age of Marketing; the third installment will follow next week.

The Adventure Market Sizing Study, a joint effort in 2009 between the Adventure Travel Trade Association and Xola Consulting, found that Generation Y travelers tended to engage in independent and budget travel outside the scope of most tour operators, due to a much more “do-it-yourself attitude” because of their budget constraints, confidence using the web to plan trips and familiarity with travel due to exposure in childhood on family vacations.

U.K. travel website and specialists Travelmatch claims this trend is shifting. They reported in May that Gen Y consumers are traveling in their highest numbers yet, and more importantly, are purchasing a “marked increase” of travel packages. They say the trend has been echoed in data from American Express Insights that shows people in their twenties spending 20 percent more on hotels since the downturn began.

Natasha Martin, an ATTA Associate and adventure travel consultant, maintains that most of Gen Y travelers still have enough time on their hands to plan their own travel experiences, but points out they’re still important in adventure travel in particular because they’re the fastest growing segment and account for 20 percent of all international arrivals. Because of the type of trips they take - backpacking, au pair, volunteer abroad, gap years - they usually stay longer and spend more, usually at a local versus international chain level. They also generate additional travel arrivals - Martin cites Tourism Australia, who found that each foreign study abroad student generated five extra visits from friends and family.

Aside from their $136 billion (U.S.) worth in the global travel industry, there are other reasons Gen Y should be valued by travel professionals and taken into longer term planning consideration. An Amadeus report found that this group spends the most on both long haul and short trips, second only to retirees. And according to Travelmatch, travel is the most important indulgence to a generation known for their love of luxury products and leisure, also attributing this to a childhood of multiple vacations a year. Alex Francis, the company's CEO and Founder, expects them to continue to place a high priority on getaways and exploration as they mature and has commented:

People in their 20s love to travel and often save significant amounts of money to go on trips to warm destinations in the Mediterranean, Southeast Asia and India. There has been a very high volume of such travellers in the latter months of 2010, and we are seeing that trend continue in 2011.

Brand marketing expert Idris Mootee, CEO of Idea Couture Inc. and author of High Intensity Marketing and 60-Minute Brand Strategist, was quoted in Travel Market Report that Generation Y’s desire to see the world is strengthening and that as they age, their tastes will trend from “off the beaten path” towards exotic luxury travel as social value shifts from material to experiential:
They believe those are the experiences that give them capital, in the sense of investing in experiences that will enrich them. Their Flickr account is their treasure chest. Visits to the little town outside of Budapest and the little village in the Ukraine all become their social capital, in the way a Louis Vuitton bag used to be.

Martin asserts, “Immediately, I see an opportunity in capturing the Gen Y market from BRICM [Brazil, Russia, India, China and Mexico] nations, who don’t have as much of a tradition of international travel as their Western counterparts, and are perhaps more likely to travel with a tour operator.  As for Western Gen Y travelers, as long as they have time on their hands, they are likely to continue planning their own trips, but as they grow up and their responsibilities increase, they will become a valuable market for operators." She also notes that psychographically, Gen Y tendencies match those of Adventure Travelers - they are more independent, confident and better traveled, and tend to travel with a purpose and enjoy a challenge - so they are perfectly suit to this niche and should be courted.

How can tour operators begin to capture this market? Branding to the values mentioned above is important; Generation Y is more demanding, both in concepts of value and service, but also in authenticity of experience - there is more likely to be a backlash from this group if your marketing messages don’t match their experience, and transparency in policies, fees and sustainability is key.

Martin suggests marketing trips to the offspring of existing clients as well as offering lower priced packages but to more exotic locales. She also mentions having positive reviews online, where Gen Y lives, mentions having “cool collateral” as part of branding can help (good t-shirts and high-quality marketing products).

Kari Simpson, the national sales manager for Contiki, which specializes in group travel for the 18-35 market, also stresses social media and targeting older family members in a post on how agents can capture Gen Y on Travel Market Report. Additionally, planting seeds among the high school and university age, as well as placing a heavy emphasis on young professionals, for the reasons Martin mentioned.

And of course, when talking about Gen Y, we can’t forget the emphasis of constant connectivity across platforms, and a high level of evolving social media engagement and expectations, which is why you see companies looking for ways to qualitatively engage with this segment online, through viral and interactive ad campaigns and social sharing. A small example is STA Travel providing branded down-loadable widgets for web pages, desktops and Facebook - so a consumer could have a running countdown clock for their trip or a instant weather comparison tool on their Facebook page, with a link to STA Travel. However, we feel marketing directly to Gen Y aside, there are bigger shifts in online marketing that will affect the way you communicate with all your customers...

Want information on how to work more effectively with Gen Y employees? Check out Tips on Managing Gen Y and Keeping Them Satisfied at Work: Guest Post by Anne Loehr

Story image designed by Murray Bartholomew, with photo composites from Jamie HendersonWayne Silver and stonethestone.