Millennials Turn to Travel Amid Home Ownership Woes
The travel industry does not exist in a bubble. It is not independent of the social and economic factors pushing society one way and another. And neither should we expect it to be. Although a huge driver of travel is to escape the reality of our day to day lives, our ability to do so depends on a few fundamental factors.
One of those is, obviously, money. The higher the amount of disposable income a person has, the more you'd expect them to travel. At which point we come to an interesting dynamic unfolding among one particular generation: millennials. As much as we hate using the label, hear us out...
Many current millennials (roughly people aged between 20 and 35 right now) are facing a battle of priorities, a dilemma that their parents never had to consider: A choice between home ownership and travel.
Are millennials forgoing home ownership for travel?
In many countries around the world (and particularly in major capitals) home ownership is a distant dream for members of the millennial generation. Take London as an admittedly extreme example: First-time buyers currently have to come up with on average £90,000 (0,000) for a deposit on a home in the UK capital. The competitive rental sector, rising student debt and a difficult jobs market are forcing long-term plans to take a back seat.
So with owning their own place becoming less likely with each passing day, it appears as though many millennials are making an active choice to live for now and to concentrate on the moment. And that's fair enough. Why not spend on travel? Especially when putting down roots somewhere is so far in the financial distance.
The numbers
We can't say for sure that millennials are putting off home ownership to travel. But we can say that they are spending more on travel in spite of the home ownership issue. In fact, millennials globally are fast becoming the most influential spending power in the world of travel.
According to Donna Jeavons, sales & marketing director for millennial travel specialists Contiki, there's been an upward trend in younger people spending money on travel. This year, Contiki saw a 10 percent rise in the average spend of clients aged 18 to 35. That could be because saving for something significant like a property seems so futile in the current climate.
“I think the urgency for buying a house is no longer there,” she told The Independent. “The cost of buying – in particular the deposit –can make it prohibitively expensive for many young people at this stage in their lives, so saving can feel like a fairly futile exercise.
“Instead, young people are choosing to live in the moment – we’re seeing many millennials investing in experiences over bricks and mortar."
Also speaking to The Independent was Chris Townson, managing director of U by Uniworld, the company behind the “millennial cruise” launching in April 2018. He said that the trend is an understandable result of a broken housing market - in many ways, it's millennials putting two fingers up to the system they find themselves in, a refusal to not enjoy themselves despite the circumstances.
“Property ownership is out of reach for many young people at this stage in their lives, so we are seeing more investment in travel and life experiences as a definite trend,” he said.
“With home ownership out of reach for many young people, this money is being invested in taking more, and better quality travel experiences.
“Our customers are spending significantly more on travel than previous generations. It’s not uncommon to see young people spending €100 for access to beach clubs, such as Nikki Beach, as they want to have quality experiences when they travel.”
The economics are tough, but what else has changed?
The shift in millennials' attitudes towards travel is about more than just the struggle for home ownership. What other factors are driving the increase?
Travel as a necessity, not a luxury
To understand why travel has become an essential part of most millennials' lives, you need to understand the mindset. This is arguably the most globally minded generation ever. It's also grown up in the most connected period of human history.
The other side of the world is no longer far away from a digital perspective, so millennials are less likely to see barriers where their parents might have. They are also far more likely to be influenced and inspired by their peers. Ninety-seven percent will post their travel experiences on social media, according to Internet Marketing Inc research.
Adventure tour operator G Adventures recently conducted a survey of their millennial travellers in order to study their habits.
“Travel for millennials has become a necessity,” managing director Brian Young told The Independent. “So while they may also wish to save for a home, they aren’t going to do this at the expense of travelling. People are waiting later to settle down, buy homes, get married and have children, so they are able to prioritise travel while they are younger. They are setting aside budgets, and making it part of their life.”
In the eyes of millennials, travel is not seen as an indulgence. “Today, it’s acceptable to go out and see the world before settling down – in fact, it’s very much encouraged as it helps you develop a lot of life and work skills,” said Jeavons.
“I think young people are more savvy than they are given credit for, and will look to travel whilst saving something, even if it’s just a small amount,” she said. “It’s just that they are choosing to spend their earnings in a different way to previous generations on travel and adventures, instead of taking the more traditional path to home ownership.”
Moving away from the material
If we break down the choice between saving for a house and going on an adventure, what are we left with? Clearly this is a question of the material versus the experience.
We already know that millennial travellers are more interested in authentic, memorable experiences than 5-star hotels and home comforts. Perhaps it's just a logical step that a week or month long adventure on the other side of the world would be more appealing than setting money aside for a deposit.
The falling cost of travel
There's no doubt about it: part of the reason that travel these days is seen as less of a luxury is because it's now affordable for the majority of people. The cost of travel is falling with the rise of no-frills airlines, package holidays and last minute deals.
There is also a huge range of trips emerging to cater for every possible taste and niche market, from foodie travel to spa getaways and romantic city breaks. With lower prices and more personalised trips available, millennials' addiction to travel is being encouraged.
How Travelshift can help you appeal to millennials
Let's face it: A generation of monied millennials willing to spend on travel is a wonderful thing for OTAs and travel service providers.
Here at Travelshift we pride ourselves on powering marketplaces that are different. Our partners don't simply list travel operators and hope for the best. They are empowered to build a thriving community of travellers, locals and guides - all of whom come together to ensure that trips are as authentic and memorable as possible.
Our marketplace solution is scalable, with a mass of embedded features to help you entice travel operators and quickly gain a foothold in your target niche. Want to look closer at our track record? Check out our Iceland case study today.
Having community-driven content as a built-in feature of our travel marketplaces enables our partners to provide the authenticity millennials are seeking. What are you waiting for?
Contact us about setting up your own travel marketplace today.