Hotel & Travel Trends

Move Over Boomers, Y Has Come of Age

-- Hotels, 4/27/2009 2:33:00 PM

For years, the travel industry has been inundated with the message, "the boomers are coming, the boomers are coming." Painted as a marketer's dream, the importance of today's biggest and wealthiest generation has been placed front and center by demographers and analysts across industries. Companies hoping to tap into their sensationalized spending power have long been setting their focus—and marketing dollars—on the "graying wave." New and impactful research from PhoCusWright's Consumer Travel Report shows that this strategy and this segment may not live up to expectations.

Bailing Boomers
The report reveals that trailing-edge baby boomers (45-54 years old) actually spent the least of any age group per household on travel. They are also the most likely to reduce their travel spending in 2009, with 27% planning reductions in travel frequency and spending. Stuck in a middle-aged slump, trailing edge boomers with children in college, devalued homes and ravaged investment portfolios have been among the hardest hit by recent economic struggles. While boomers still represent a critically important consumer group, the permanence of their risk-taking and resulting financial scars will change the way this generation spends money for a long time, if not forever. Marketers should seriously rethink boomers' status as the golden target group, at least for the near term.

What recession?
On the other side of the spectrum, 18-24 and 25-34 year olds are more likely to increase their travel spending in 2009. In particular, 32% of 25-34 year olds (the group that spent the most on travel in 2008) plan on spending more in 2009. This group includes some of both Generation X and Generation Y, but generally exhibits traits associated with Gen Y. So why is Gen Y spending more? Beyond their cultural branding as being free-spending or experiential, they are less likely to be burdened by high-fixed expenses or to have suffered significant investment loss. They also have plenty of time to save up for retirement, so they are not afraid to reach into their wallets. And fortunately for the industry, travel is high on their to-do list.



It is also important to point out that while these two generational cohorts are showing significant intentions to change their travel spend in 2009, there is a substantial portion of travelers who intend to make no changes. A strong correlation exists between age and propensity to make no changes to travel plans. This suggests that as travelers grow older, some settle into a comfortable level of spend and fluctuations become less common.

Travel Marketers Take Note
As the U.S.travel industry suffers through a predicted 11% decline this year1 and revenue managers lose their resolve to hold rates, age-specific targeting may help improve marketing effectiveness. Young travelers are scanning online travel agencies and metasearch engines in their quest to see the world. Boomers will appreciate quick, affordable, "off the beaten path" (think quaint, not exotic) getaways that allow them to unplug from their stressful everyday lives. The right age-driven spin might be just the trick to cutting through the din of deals in the marketplace this year.

Source: Hotel Mag