Posts

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 ($120,000) 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.

calm explore freedom tranquil scene travel recreation girl nature road trip woman smiling grassland peaceful grass recess hobby journey leisure tourism relaxation chill young sunglasses holiday enjoyment vacation traveling

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.

“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.”

millennials home ownership and the travel industry

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

travelshift software for maketplaces

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.

Gap in the Market Volume 7 – Food Tourism

As part of our ‘Gap in the Market’ series, we’ve been taking a closer look at different sectors of the travel industry. Each post outlines a potential niche that might be ripe for a new marketplace, crunches some of the numbers, and looks ahead to what could be in store for the future. Today we’re delving into the wonderful world of food tourism…

food tourism

Foodie travel has become big business, and cuisine is quickly becoming a key driver for food-conscious (no, not couscous) tourists. And as the culinary-curious continue to flock to tasty destinations around the world, whole markets are beginning to develop to cater for their every desire: Wine tastings, street food tours, morning market expeditions, cookery classes, fine dining in the home of your favourite chef – the list goes on and on. And so do the potential business opportunities.

When you think about it, the rise of food tourism makes a lot of sense. In a travel industry where many tourists venture thousands of miles and end up with all the same old home comforts, food and drink offer inescapable and total authenticity. It’s a way to truly connect with a destination and its culture, not just a fantastic way to spend an evening!

Perhaps more so than other sectors in the travel industry, food tourism has that extra ability to entice. Indeed, one thing fuelling its rapid rise is the wave of social media content that gives so many food tourism operators free publicity. (I’ll take your tweet of tapas in Manchester and raise you an Instagram of paella lovingly stirred by a Michelin-starred chef in the heart of Valencia – or something like that…) As Skift’s 2015 report on the subject pointed out:

Every traveller today has the ability to digitally share their culinary experiences with friends and strangers around the world, fuelling a veritable social media arms race to determine who has the most unique food and beverage experiences.

It’s an arms race! Who can post the most appetising Crème brûlée?

This notion that social media is having a tangible impact on the food tourism market is more easily understood alongside another trend concerning the kind of trips that the next generation, those pesky millennials, want to go on. As well as being the most active generation on social media, millennials have a special relationship with food and drink – even more so going forwards. This is arguably for three reasons:

They crave authenticity

Young people today are all about being real. The closer they can get to the source of something, the more comfortable they are with buying into it. So when it comes to food, they want to know how it was produced and who by – two cravings that are easily satisfied by many food tour companies promoting local produce.

In theory, taking a look at millennial travelers’ preferences today should give us an indication of what will become mass-market trends five years from now. Those millennials have totally embraced the sharing economy and online bookings, and standard hotels for independent accommodation – so why expect any different as their tourism is increasingly determined by food glorious food?

Millennials’ purchasing power is on the up

Boom. Purchasing power. According to Skift’s research report “The Rise of the Millennial Traveler,” the purchasing power of millennials is $170 billion per year and growing. And what drives this spending? According to Skift’s research, it’s “happiness, passion, diversity, sharing and discovery”. Croissant, anyone?…

They want to go deeper

This is pretty similar to the authenticity point, but perhaps takes it one step further.

As well as getting an authentic taste of a destination, immersive travel experiences are becoming all the rage. Plenty of travellers now want to live, eat and drink like a local. Websites such as EatWith offer opportunities to do exactly that. It’s kind of like AirBnB, but you drink wine and eat with strangers as they tell you about their city. You’re like the long-lost relative they never knew they had. But for one night only!

This idea of going deeper also links nicely with the social media furore around food tourism. Travellers want to share their experiences more than ever, especially when those experiences illustrate what a place is really like. Food manages to unlock that door.

There’s more to the food tourism wave than hungry millennials

Aside from the millennial-driven hunt for authenticity, it’s also a fact that our attitude towards food is changing more generally.

A report by the American Journal of Tourism Management released in 2013 argued that the growth of food tourism is because people are looking at food more as a pleasure than a necessity. “People spend much less time cooking, but choose to pursue their interest in food as part of a leisure experience,” they said. In countries such as Italy and Spain where food tours are increasingly popular, dining experiences have always been about social interaction just as much as what’s on the plate. Maybe the rest of us are just starting to catch up?

But although millennials will undoubtedly have a big say on food tourism going forwards, at the moment the market is dominated by those who are a little bit older. Take a look at Foodie&Tours’ (more on them later) infographic below.

Food tourism market

An infographic on the food tour industry from Foodie&Tours

Plenty of interesting points to be taken from those statistics. First of all, our theory that social media has a big part to play is confirmed by the fact that last year, 63% of foodie travellers took and shared photos of their edible conquests.

Second, only 22% of food tourism was marketed online. That’s a whopping 78% that wasn’t, and a huge amount of potential for online marketplaces untapped as a result.

In conversation with Hugo Palomar, founder of Foodie&Tours

In a move away from the norm, this week we’ve been speaking to a man who has plenty of experience in food tourism, having set up his own food tour marketplace in Barcelona, Spain. Hugo Palomar is the founder and CEO of Foodie&Tours, which now offers tasty food and drink-focused tours in five countries across Europe. The company is planning a global expansion to offer tours in over 40 destinations worldwide, so it’s fair to say that they are on the up.

First up, I asked Hugo about the motivation behind his food tour marketplace. “The project began because we detected that there was a market opportunity in the travel industry,” he said. “There was no reference for gastronomic tourism online. Two of my great passions are travel and gastronomy, and we believed we could create a successful platform.”

food tourism tours travel industry

Foodie&Tours offer a variety of gastronomic trips throughout Europe

Hugo and his team are striving to become a global leader in the field of gastronomic tourism, and although that’s now a realistic prospect, there have been challenges along the way.

“The biggest challenge,” says Hugo, “has been to create a technological platform and a team with very limited resources.” Like any startup, “We need dreamers, as well as investors who believe in the project to finance us. Part of the strategy of the company is to grow in terms of resources without jeopardizing our future viability. Taking forward steps is complicated because our company needs a big sales volume to expand, but gradually we are getting there.”

When you create a company like ours and realise that your competitor is a global monster, you have to adapt your strategy.” – Hugo Palomar, Founder of Foodie&Tours

It’s clear that sometimes it’s important to take things slowly and progress at a steady rate, instead of reaching beyond your limits. Palomar says that the main factor to affect the growth of Foodie&Tours has been dealing with limited resources, not to mention the fact that his company is competing with Trip Advisor, which he describes, fairly, we’d suggest, as “a global monster.”

“The main factors [affecting growth] are the resources that are dedicated to the growth of the company. The second is the ability to grow in destinations when competing on channels to attract traffic and sales with the likes of Trip Advisor. When you create a company like ours and you realise that your competitor is a global monster, you have to adapt your strategy.”

Foodie tourism food travel

Tapas in San Sebastian

After a strong start in the food tourism market, is there anything that Hugo would do differently if given the chance again? He points out that the lessons learned on the journey can be just as important as growth itself. “We did a lot of things at the beginning that we would not do now,” he says. “But the important thing is not so much what we would do, but that we have learned to realise this, and how the team reacts. This is a project that only succeeds with highly-motivated people working together – this is the key!”

Looking forwards, the future looks bright for Foodie&Tours, along with any other startups that decide to aggregate food tourism providers across national borders.

“I sincerely believe that foodie tourism is a market with a high growth,” he says. People and travellers want to live real experiences, and there is nothing better than to live those experiences through food, drink, traditions and customs of the land.”

Hugo predicts that more and more local operators will start to spring up and offer food-related activities. He also suggests that larger, umbrella companies with the right technology will be able to build franchise systems connecting thousands of entrepreneurs together. One thing’s for sure: food tourism is here to stay, and Foodie&Tours are well ahead of most of the competition.

If all this talk of culinary delights has given you an appetite, check out the Foodie&Tours website to find a food tour near you.

Thinking about starting your own marketplace for food tourism?

That’s pretty much what we do. Having successfully built Iceland’s leading travel marketplace, we’re offering up our software solution to ambitious entrepreneurs with a passion for tourism. Our marketplace solution is packed with features to help you get up and running in no time at all, and you’ll be backed the whole way by our knowledgeable and experienced team.

Travelshift software offers a community-driven platform that allows you to manage your sellers, their inventory, content marketing, and all transactions in a single, easy-to-use solution. All you have to do is choose your travel niche, attract vendors to your marketplace and go. Interested? Get in touch with us today to find out more.

In the meantime, here are a few insider tips for making an impact in food tourism

 

Work with a local network to create experiences that will sell

Once you’ve established a local network of operators, co-create new experiences to fill the gaps and make the most out of the destination. Meals, tastings, cooking classes, educational trips and entertainment can all be combined with accommodation to build up a series of dynamic products that will appeal to a wide range of visitors. 

Social media promotions go a long way, especially when combined with different sectors

As we’ve already seen, social media is particularly powerful in an evocative travel sector such as food tourism. Expanding an already extensive reach can be done by simply scheduling tours that cover more than one base. Why not combine food with culture, appealing to a larger audience that wouldn’t necessarily choose to do one excursion exclusively.  Reaching beyond the die-hard foodie type is vital if you want to see real growth.

Engage and inspire with quality imagery

Pictures say a thousand words, but they can also taste good. Your food tour business will live and die by how appealing your products are to browsing customers. Promotional campaigns have to be immersive and inspiring, with bold and professional photography. This kind of content is a sure way to encourage organic engagement.

The Importance of User Generated Content

Why do it yourself, when you can build a community?

Why do it yourself, when you can build a community?

In an online world where marketing bombards us from every angle, it’s getting more and more easy to simply switch off and ignore the expensive messages that businesses are intent on driving our way. Pop-ups, email newsletters, social media posts, video adverts… All of these methods can be avoided, deleted, fast-forwarded or completely disregarded. The internet is a more competitive battleground for attention than ever, so marketing needs to be smarter. Read more