According to the sixth annual Allianz Travel Insurance Vacation Confidence Index released recently by Allianz Global Assistance USA, more Americans will travel, but spend less, on summer vacations in 2015 as millennials plan to save money on travel.
Millennials are the fastest growing demographic in travel and really every other vertical in the world. Millennials are smart, technology savvy and don’t travel the same way that their parents did or even Generation X does. Technically, I’m a Gen Xer as I was born in 1978-missed it by 15 months! However, I definitely understand where millennials are coming from and what’s important to them. It’s about experiential travel and value for this burgeoning generation and I say that’s awesome!
This summer, Americans will spend $85.5 billion on summer travel, down 13.5% from $98.8 billion in 2014, despite a 0.5% increase in the number of Americans who are confident they will take a vacation this summer.
The survey, which tracks Americans’ confidence they’ll be able to take a summer vacation and reports how much they intend to spend while vacationing, shows that 2015 will be the year of value-seeking travelers. The average American taking a vacation this summer will spend an average $1621, down from $1895 in 2014. And more vacationers (19%) this year will travel on the cheap by spending less than $400 on their vacation, far more than in 2014 (13%).
The fall in summer vacation spending is being driven by young Americans aged between 18 and 34, the most confident of any age group in taking a summer vacation (50.5%). Almost 40% of millennials plan to spend less than $400 on summer travel; double all other age groups combined.
While it may sound unrealistic to many to take a weeks vacation over the summer while spending less than $400-it is possible although perhaps not ideal for all. There are so many home sharing groups and websites out there that it really is possible to travel that cheaply these days if you are just trying to save money and are willing to sacrifice on comfort and privacy. However, it’s not just millennials who are trying to save money this summer-in fact who isn’t?
“More travelers are looking to save money on their summer vacations this year, and the travel industry needs to respond with value-focused offerings,” said Mike Nelson, CEO at Allianz Global Assistance USA.
I agree with Mike wholeheartedly. The travel industry needs to start adjusting now to changing tastes and trends in the travel industry. The Internet has changed life and certainly the way we travel. Millennials are taking things to the next level and experiential value is the key. It will be interesting to see how the travel industry adjusts to millennials. I know I’ll be watching carefully.
The Vacation Confidence Index has been conducted each summer since 2010 by national polling firm Ipsos Public Affairs on behalf of Allianz Global Assistance USA. A vacation is defined as a trip of at least a week to a spot that is more than 100 miles from home.
Disclaimer: I have a working relationship Alliance Global Assistance USA. However, the opinions expressed in this post are mine based on the findings of the Vacation Confidence Index.
As a millennial, I can relate to the findings of this study and also agree with your assessment of how millennials like to travel. Experiential Value-I’ve never heard it proclaimed as that before but I love it. Thanks for sharing.
We are changing the world! It’s very exciting to be young and motivated these days!
But there’s a lot of millennials who are really lazy and have interest in anything. But I suppose that’s anything in life.
Millennials will go down as both the greatest generation and the worst generation.
I think another driver as to why millennials are spending less, is that they actually enjoy the planning and research and therefore aren’t booking with tour agencies. It’s not that they wouldn’t enjoy an nicely planned trip but they find a lot of value in the discovery. Agree, should be interesting to see how companies will adapt. Any tour agencies you can think of trying to focus more on millennials?