Sujata Bhatia Europe and Asia vice-president at American Express Business Insights
In the face of continued economic uncertainty and faltering consumer confidence it’s not surprising that many people are reviewing their spending priorities.
At a time like this, it might seem that travel is an area where people would seek to reduce their discretionary spending.
But, in the midst of this rather gloomy outlook, there is a group of people who are showing no signs of putting away their passports and staying at home.
Gen Y is an enthusiastic group when it comes to travel. These young consumers, between the ages of 18 to 29, are a small but growing segment in the travel industry, who are making different choices to their parents when travelling.
According to our spending data, Gen Y is embracing travel in a way their older counterparts – Gen X, Baby Boomers and Seniors – are not.
When we looked at travel spending in Europe, the US, Australia and India we found an overall 8% rise in the number of Gen Y travellers in the first half of 2011 compared to the same period last year.
This was on top of a 13% rise in 2010 compared to 2009. Growth in traveller numbers from other generations was almost flat over the same period.
Not only are they travelling more than their parents, they are also spending more. In fact, Gen Y is the only generation to have shrugged off the gloom and today is spending as much on travel as they were before the global financial crisis hit the travel industry in 2007.
In Europe we’ve seen some of the strongest growth by this age group. In 2011, Gen Y’s year-on-year spending for the first half was up by 20%.
There were 7% more Gen Y travellers in Europe in the first half of 2011 when compared to the same period last year. Spend per traveller also increased by 13%.
Looking beyond Europe, in the US spending has been strongest. Year-on-year, the number of Gen Y travellers has increased by 8% and average spend per traveller has increased by 7% in the first half of 2011.
In India the number of travellers increased by 2%, whilst spend per traveller remained flat. Australia saw a fall of 4% in the number of Gen Y travellers, but spending per traveller increased 13%.
It is not just their spending power that makes Gen Y worth serious consideration. They are also looking beyond the traditional holiday destinations for different experiences.
Traditional tourist activities (such as visiting landmarks) are low on the agenda, with this age group preferring to search for cultural experiences they can share, such as festivals.
Their desire to stay in constant contact with their friends and families means that high quality internet access is high on their priority list when booking accommodation.
With their huge appetite for travel which appears resistant to economic pressures, Gen Y is a market that the travel industry would do well to keep an eye on.