A recent report from Expedia highlighted the fact that Generation Z travelers, who are just now entering the workforce, are more budget-conscious but highly prioritize travel.
GLOBAL REPORT—While the hotel industry, and the broader travel industry that includes hotels, has spent a significant portion of the past decade obsessing over how to best reach millennials, their successors—referred to as Generation Z—are primed to come into prominence in the next few years.
A recent report from Expedia Group Media Solutions* titled “How Younger Generations are Shaping the Future of Travel,” outlined in a recent webinar, highlighted the fact that Generation Z has up to $143 billion in buying power, takes roughly 2.8 trips per year and will be the largest cohort by 2020. The oldest representatives of the group are just now entering the early portion of their professional lives.
Here are some highlights from what Expedia had to say about reaching these budding travelers.
1. They start with the budget
More so than millennials, travelers in Generation Z are budget-oriented, and begin any planning by establishing just how much they have to spend.
“When Gen Z starts out, they start thinking about planning that budget; that’s top of mind and a big consideration more so than for most generations before them,” said Lisa Lindberg, VP of product management for Expedia Group Media Solutions.
A total of 82% of Generation Z begin travel planning by laying out their budget, compared to 77% of millennials.
In part, this is because they are still young and have comparatively less money to spend, but when they do travel, they want to pinch pennies to extend trips, Lindberg said. Average duration for trips booked by this generation is eight to 10 days, according to the Expedia report.
When Gen Z travels, hotels factor in at 22.5% of their total spend, compared to 25.6% for millennials.
2. Open to inspiration and influence
Because they are constantly connected to their smartphones and social media, Generation Z is constantly on the lookout for new travel ideas, Lindberg said.
She described the cohort as “destination indecisive,” meaning they are more willing to be wooed than previous generations into choosing a location.
This is something destinations can take advantage of, Lindberg said, noting the generation is often swayed by chances to visit unique attractions, or have compelling food and shopping.
The window for influencing them seems to be shorter than other generations, she noted, because once they make a decision, they tend to book quickly.
3. Deals are important
Because Generation Z members want to see their dollars go as far as possible, they often are looking for deals. She said this ultimately results in an interplay between wanting to be efficient with their spending while also having the best experiences possible.
“In the beginning when somebody is thinking about planning … this is where the head comes in,” she said. “It’s about ‘can I get a deal? What’s the best booking deal I can find?’ Then it gravitates to being about the heart: ‘What appeals to me (in terms of) cultural activity or experience.’”
4. Bleisure seems to be a priority, so far
While relatively few Gen Zers have been given the opportunity to travel for business up to this point, those who do seem keen to extend work trips for leisure purposes, according to the Expedia research.
Lindberg noted 66% of survey respondents said they’d want to extend work trips.
“The most interesting trend is Gen Z will extend a trip as many as five days,” she said. “And a business trip that’s five days, they will extend about 3.2 days. That’s higher on the index than millennials, likely because millennials have more commitments and Gen Z is still just starting out.”
She noted another interesting trend with the generation is they will extend business trips to travel to a different, but nearby destination, which creates another opportunity for destinations to woo them.
Lindberg cautioned, though, that so far the sample size on Gen Z bleisure travelers is very small, so it’s important to not extrapolate too much.
5. Reaching them on mobile is key
Lindberg described Gen Z as “highly addicted and heavy users of smartphones,” indexing even higher than millennials in that regard.
And smartphones factor in during every part of the travel journey, she noted, with 68% using them for inspiration, 46% for further research, and 79% using them during their travels for in-destination research. She noted that booking on mobile still lags a bit compared to desktop, at just 32%, but she said mobile bookings continue to trend upwards.
She said acknowledging this heavy phone use is key to reaching Gen Z.
“Use this medium and advertising to reach these travelers throughout the booking journey,” she said.
Lindberg said the generation is often swayed by compelling visuals and informative content on platforms like Instagram.
*Clarification, 7 December 2018: This story was changed to specify the research was done by Expedia Group Media Solutions.