Last week at G'day USA, Tourism Australia's annual travel trade event in Los Angeles, I moderated a panel that began with a presentation by Tony D'Astolfo, managing director of the research firm Phocuswright (which, like Travel Weekly, is owned by Northstar Travel Media). D'Astolfo's deck had a number of slides devoted to the travel habits of the rising generation of consumers, the millennials.
That generation is traveling more, longer and farther than other age groups: Millennials of adult age are twice as likely to take trips of two weeks-plus, and 42% traveled internationally in 2013 vs. 28% of older generations.
Millennials are passionate and seek unique, authentic experiences, D'Astolfo noted. But he cautioned the audience, which focuses primarily on marketing and selling Australia, "Don't get your hopes up." Although millennials travel more, they spend less. Sixty percent stay with friends and family rather than at a hotel. They are much more likely to book last-minute (23% booked within a week of travel vs. 12% of older travelers). And to top it off, they are demanding and entitled; their propensity to book close-in is a reflection of an "I want everything now!" attitude. They assiduously hunt deals and eschew brand loyalty.
"Millennials may not be your core audience today, but they will be when they reach their peak earning and spending years," said the caption on one slide. "Now is the time to build relationships, as they engage brands, form perceptions and develop travel habits and preferences."
I found the data gave numeric form to comments made during a recent conversation I had with a friend who, like me, has millennial-age children. He marveled at how his kids, who were raised in an upper-middle-class household, were willing to go downscale to have an authentic travel experience. He talked about their stays at hip-but-cheap hostels with tiny cubicles similar to those once found exclusively in Japanese train stations.
Will they go from beds in pods to the Four Seasons, and if so, what could the Four Seasons be doing now?
It may help to clarify D'Astolfo's dual messages of "don't get your hopes up" and "establish relationships now" if we sort out which millennial behaviors are common to young people of every generation and which may be particular to this generation.
That they stay with friends or sleep in cubes strikes me more as circumstantial than unique to this generation. As D'Astolfo points out, they haven't yet reached their peak earning power -- far from it -- so it's a practical matter to pay as little as possible for lodging, for now.
Similarly, millennials don't yet have the same privacy needs a traveling family might, nor the responsibilities that would place limits on how much time off they devote to travel. And without a family, mortgage and the obligations that collect with age and career, it's a bit easier to indulge, as young people have throughout history, in "I want everything now!" behavior.
There is likely also a natural correlation between traveling on the cheap and enjoying immersive, authentic travel. The term "authentic travel" hadn't yet been coined when a previous generation's travels were shaped by early Lonely Planet guidebooks with titles like "Africa on a Shoestring." The book's readers -- many, no doubt, staying at Four Seasons today -- showed up without reservations at small guesthouses in residential neighborhoods and ate street food out of economic necessity.
And for the generation before that, the guide was Arthur Frommer, who told travelers how to see Europe on just $5 a day.
It's easier to have an "immersive" experience the further downscale one goes, yet it's human nature to move upscale as soon as one can afford to; some of us who traveled with Frommer and Lonely Planet in hand now spend in two weeks what we used to spend in six months.
Millennials will likely follow their predecessors into familiar travel patterns as they move through life's passages.
All that said, I believe millennials have also been shaped by circumstances that are very different from what previous generations were exposed to, and which will influence their future behavior.
As much as mobile devices and social media have influenced them, they are also experiencing a world where the friction of travel has been greatly reduced. They have come of age with ready access to travel information, fewer border hassles, cheap regional airlines and a general rise in international travel standards. They will travel more.
But speaking as a past budget traveler, I'm not sure I can point to many examples where my early interactions with brands had a lasting effect. In much of Africa and Asia where I traveled in my 20s, the InterContinental Hotel was often the only Western brand I encountered, and it was typically the best hotel in town.
Although the brand impressed me, I couldn't afford it. At the time, I aspired to stay in an InterContinental. But now that I can, there are often several other high-quality brands in far-flung places to choose among. Just as much of millennial behavior evolves with their stage in life, so it is with brands, which not only evolve but adjust to a changing competitive landscape.
Is it worth courting millennials now, hoping for a payoff in the future? It's hard to say whether any brand today will have relevance to a millennial at age 40. And hotel brands have recently stepped up diversification of their portfolios to appeal to a wide variety of demographics. Perhaps InterContinental Hotels Group's Indigo brand will appeal to millennials today, but IHG will compete for future business against brands, new and old, battling to stay relevant to the shifting preferences of an enormous, and increasingly prosperous, rising generation.