Many millennials today are entering their peak earning years and gaining more affluence at unprecedented rates. This new generation is changing the face of affluence forever. According to our latest research from FutureCast, nearly one quarter of U.S. adults making an annual household income of more than $500,000 are millennials. This means that brands looking to make a splash within the millennial audience need to stop thinking of this generation as college students playing beer pong in the basement and instead recognize the significant spending power that this group wields — especially in the luxury travel industry.
Millennials are a generation that is completely redefining what adventure means and are looking at the world through a more global perspective. According to the United Nations, 200,000 million millennial tourists generate more than $180 billion in annual tourism revenue, an increase of nearly 30% since 2007.
For brands in the travel industry this is great news. What is even better is that millennials agree that traveling and seeing the world is an intricate part of their lives with 78% of them choosing to splurge on experiences over “things.” They are also 23% more interested in going abroad than older generations and make up 20% of all international tourists. As affluent millennials begin reshaping what the travel industry looks like today, I sat down with Cathy Ross, CEO of Exclusive Resorts to get her take on current industry trends.
Jeff Fromm: What are the must-haves with affluent millennial Travelers ?
Cathy Ross: Millennials like to travel with their “tribes” — large groups of friends and/or family so they are looking for accommodations with plenty of space – large, well-equipped kitchens, spacious dining and living areas, multiple bedrooms and bathrooms and outdoor space is more important than ever before. Being able to customize their itineraries is a must, especially when traveling in large groups of varying interests. Because this generation is so active, they travel to destinations where they can explore the outdoors, get immersed in local culture or discover the food and wine/beer scene. Having access to a local contact (concierge) that guides them to local experiences and helps plan activities is also a must have as the travel is as much about the experience as it is the residence or accommodations.
Millennials trust friends, family and peers to provide honest reviews and feedback. But unlike older luxury travelers, they are more willing to do research online and sort through hundreds of sites to find a vacation that’s perfect for them. Technology is king and millennials expect brands to have mobile-friendly apps so they can quickly read reviews, look at pictures and book on demand. They want to stay connected during their vacations, so Wi-Fi is an absolute must. This generation is active and want more than just a nice beach to enjoy, so they look for destinations and accommodations that grant access to spas, golf courses, outdoor excursions and authentic experiences that help them get to know the local culture.
Fromm: When you think about destinations, what are some of the top U.S. and international destinations for affluent millennial travelers?
Ross: A lot of millennials are traveling to big cities like Las Vegas, Chicago, Miami and New York. They also look for cultural experiences in Austin and New Orleans or head to cities like Portland, Napa and Sonoma to explore the local food, beer and wine scenes. Vail is a popular ski destination that also offers a multitude of summer activities for the outdoorsy type.
Internationally, Cabo and Puerto Vallarta, Mexico are easy for West Coast millennials to get to, and East Coasters can take non-stop flights to Caribbean destinations like Grand Cayman and the Virgin Islands. France and Italy are always popular when it comes to European travel. But for more far-flung adventures, countries such as Iceland and Thailand are very popular, and New Zealand and Costa Rica are great for adventure-seekers.
Fromm: What are some “bucket list” experiences that affluent travelers seek?
Ross: African safaris and Mediterranean cruises or attending VIP events like The Masters and Olympics are fairly common bucket list items. I’ve met a lot of travelers who want to visit every continent on Earth, so trips to Antarctica are extremely popular right now. And millennials are wanting to explore what’s in their own backyard – and aren’t afraid to get their hands dirty – so they’re taking DIY adventure trips like driving an Airstream through some of the U.S. National Parks.
Fromm: How will new entrants like Airbnb attempt to take share from established luxury travel brands? What makes Airbnb so popular with millennials and does that extend to affluent millennials?
Ross: Travel brands like Airbnb and HomeAway offer a wide variety of accommodations from budget options to over-the-top residences. These sites are easy to navigate and provide extensive peer reviews. However, photos can be unreliable, quality can be inconsistent and most residences don’t come with concierge or housekeeping services – meaning travelers will spend part of their vacation doing the dishes or making beds. Millennials will absolutely utilize these platforms, but affluent travelers who don’t have time to research or plan a vacation will find these sites a hassle.
Fromm: What trends in hyper-personalization do you see in the next three years? What technology will brands need to deliver highly customized experiences?
Ross: Travel brands are starting to invest in technology that sync member profiles with online search histories, travel habits and destination or accommodation reviews. These types of platforms help travel providers really get to know their customers so they can speak directly to each person at an individual basis and be proactive in ensuring each traveler has a unique and memorable vacation, thus fostering trust and loyalty. These platforms will also allow travelers the opportunity to customize their trips on-demand and chat with a concierge or local expert through a mobile app.