Get ready airlines, hotels, and travel companies: the Millennials are coming. Try to set aside what you've heard about Millennials in the United States struggling to find jobs and pinching pennies. Because in the next five to 10 years there's at least one sector where they will be the dominant demographic in terms of spending: travel.
According to a new report from The Boston Consulting Group, Millennial spending will have a major impact on the travel and tourism industry. One example: Millennials will account for nearly 50 percent of spending on business flights by 2020. Here's a look at how that statistic will change over time by demographic:
“In as few as five years, Millennials will enter their peak earning, spending, and traveling years and surpass the baby boomers in business flight spending,” said Christine Barton, the lead author of the report.
But what does this mean for the travel and tourism industry? Better understanding how Millennials travel and tailoring services to accommodate them. Business-traveling Millennials, for example, are less likely than non-Millennials to use airline loyalty programs. This means that rethinking the loyalty programs and promotion should be a priority to meet their needs. And for leisure-traveling Millennials travel apps for smartphone are more essential than they are for non-Millennials. Offering free-WiFi on flights, then, might not be a bad thing to consider. But in order to capitalize on the increased travel spending of Millennials in the future, it's best for companies to act sooner than later.
“The window of opportunity for businesses to understand the unique travel approach of this generation and gain its mind share is closing rapidly. Companies will be more successful if they determine an effective Millennial strategy now," Barton said.
Read the report: "Traveling with Millennials"