Select at random a sample of travellers from any airport and hazard a guess. Are you talking to a millennial? There is a good chance that yes, you are.
Select at random a sample of travellers from any airport and hazard
a guess. Are you talking to a millennial? There is a good chance that yes, you
are.
Millennials, widely defined as those born between the years of 1982
and 2004, are truly unlike any other generation. This is the generation of
kingmakers – more affluent, savvier with technology and more socially connected
than any other generation past.
Right now, Asia is home to approximately 60% of the world’s
millennials, a group poised to reach the peak of its spending power over the
next decade.
Even before they reach the prime of their earning power, Asian
Millennial Travellers (AMTs) are already spending an estimated US$210 billion
on international travel. By the time AMTs come of age, spending on
international travel is expected to increase by 1.6 times to US$340 billion by
2020.
The digital natives
Millennials are known as digital natives for good reason: having
grown up in the era of the digital revolution, they feel at ease on various
online platforms, messaging apps and social networking sites. At times,
simultaneously.
Navigating large volumes of information comes naturally to millennials.
The habit of gathering information from as wide a range of sources as possible
is writ large in their travel DNA. Both traditional and online sources matter, including
review sites, printed guidebooks, magazines, travel blogs and video commentary.
When travelling, millennials make informed choices, typically gleaned
through research and communication.
Tapping into the
Asian Millennial Travel Market
More than anything, AMTs crave control and autonomy over their
travel experience. Regimented travel and fixed schedules are anathema to this
generation of individualistic travellers.
A study commissioned by the Singapore Tourism Board, ‘Capturing the Asian Millennial Traveller’,
found as many as 64% of AMTs opting for free and easy or wholly independent
travel arrangements on their last leisure trip, with only 22% using a package
tour. And these are almost always in instances where they have no other
alternative – “some places, you can only go with a tour company”, the report
states, quoting a respondent who had recently travelled to North Korea.
Due to the multiplicity of opportunities available to them, AMTs are
fluid in their preferences, unlike their brand-loyal predecessors. Choices are
often informed and motivated by their own experience and that of their peers.
The study states that while brand awareness of travel service
providers appears to be high in Asia, airlines and hotels often fail to attract
loyal customers, as their traditional value propositions are out of sync with
AMT priorities.
The gap is apparent: while these brands offer familiarity and
reliability, AMTs prioritise price, convenience and social approval.
China, India,
Indonesia and Singapore
AMTs are not an entirely homogenous group, however. The study also
found pronounced differences within the region when it comes to spending habits
and motivations for hitting the road.
Chinese Millennial Travellers travel as a means to indulge and
escape from city life. They spend twice as much as the average AMT and are,
unsurprisingly, the largest spenders overall, splurging more than US$14,000 on
travel yearly.
In contrast, Indonesian Millennial Travellers are the most budget
conscious group of AMTs surveyed, spending 85% less than the Chinese, an
average of US$2,080 yearly. Spurred by cheap promotions, they tend to travel on
impulse and stick to the region.
Indian Millennial Travellers are drawn to iconic cities and
well-trodden destinations, viewing travel as a status symbol. Within AMTs, they
are most likely to travel with their families on full-fledged carriers to
long-haul destinations. These are the epicureans of Asia who claim their biggest
expenditure during trips is on food. Spending on average US$5,647 yearly, Indian
Millennial Travellers are the second highest spenders surveyed.
On the other hand, Singapore Millennial Travellers value
experiential travel. They seek unique and rare encounters, often investing a significant
amount of time to plan elaborate itineraries drawn from both traditional and
online sources. They spend an average of US$5,555 yearly and are the most
independent travellers surveyed, preferring free and independent travel to
structured itineraries.
Tapping into a
US$340 billion market
AMTs are so different from their predecessors that travel operators
must adopt a distinctly different approach from anything they have been
accustomed to in the past.
While there isn’t a one-size-fits-all approach, the report urges
learning from adjacent industries to understand and adapt to AMT preferences. These
include facilitating customised travel, building trust through consumer-led
marketing, creating loyalty programmes that meet the needs of the millennial
generation and developing a unique and differentiated offering that resonates
with their target segment.
As the balance of global economic power tips in Asia’s favour, a
burgeoning and young middle class will continue to fuel growth in the travel
market. With US$340 billion at stake, AMTs are the new traveller the industry
cannot afford to ignore.