By Marc Truyols, Regional Director of Sales EMEA at Hotelmize
Organizations in the travel and hospitality sectors often run market analyses to learn what their target audience needs and wants are. One of the key initiatives is demographic segmentation and trying to discover how each of the segments behaves.
Gen Z travelers make one of the most significant demographic segments today. Discovering and understanding their behavioral patterns is key if you want to sell your services to them. Businesses in the travel and hospitality sectors often disregard this big group of travelers, thinking it is less opportune. However, for 43% of Gen Z travelers, traveling remains a top priority.
Let’s take a closer look at Gen Z travelers, discover their key behaviors and what makes them different from Millennials.
Gen Z Definition
Thanks to generational cohorts, researchers are able to analyze changes in behavior. This information is essential for businesses across verticals as it helps them better understand new customers. So, what is the definition of Gen Z?
Gen Z is defined as anyone born from 1997 onward. The oldest among this new generation is just turning 24. Most people in this cohort are in their teens, if not younger. It is the largest and most ethnically diverse generation in the US. Gen Z grew up with the internet and social media. Due to being so closely intertwined with technology resulted in this gen being stereotyped as tech-addicted.
The latest research indicates that Gen Z will make the largest share of the U.S. consumer population. With a population of 82 million people, Gen Z even surpasses Millennials by 2 million.
How do they travel?
How do people in the Gen Z cohort travel? Are there any unique behavioral patterns you should know about? Generally speaking, Gen Z travel behavior shows three distinct characteristics.
- Gen Z is fond of OTAs. A quick reminder – OTA stands for online travel agency. OTAs make an online booking channel. They often have unique offers such as loyalty programs and dynamic packages. It appears that Gen Z favors OTAs above any other available online booking channel such as travel agent websites, metasearch, and direct websites. Gen Z uses OTAs to book cars, air transportation, and hotels.
- Gen Z uses a travel subscription.Young travelers are more open to receiving new and engaging offers through direct channels such as email and messaging. Not only do they welcome the direct offers but seriously consider their value and act on them to organize new trips.
- Finally, while the worldwide pandemic affected travelers and their plans worldwide, Gen Z appears to be more resilient to the challenges pandemic caused.For instance, people in other cohorts choose isolated lodging, less crowded destinations, and local destinations.
Meanwhile, young travelers still had an interest in international travel. In fact, 40% of Gen Z travelers travelled abroad in 2020. That’s the highest share of all generational cohorts.
Finally, for 43% of Gen Z, traveling is one of the top priorities.
Gen Z vs. Millennials: The Key Differences
Are there any key differences in how Gen Z and Millennials travel? Yes, there are some noteworthy ones.
While Gen Z encompasses people born after 1997, Millennials are a group of people born between 1981 and 1996 (ages 25 and 40 in 2021).
Let’s see who travels more, Gen Z or Millennials? Research by AARP Travel and Expedia has shown that Millennials travel more than any other generation and US Millennials travel 35 days per year while Gen Z youngsters travel 29 days per year. Still, Gen Z travels more than Generation X and Baby Boomers and is right behind the Millennials. Considering that most of the people in the Gen Z cohort are still financially dependent on their parents, this trend is quite logical.
Millennials and Gen Z also don’t share the same plans when it comes to international travel. Over half, more precisely, 51% of Gen Z travelers are planning international trips while 37% of them have plans for domestic vacations. Almost half of the Millennials don’t plan to go abroad. 35% of them plan international trips. The difference when it comes to international trips is substantial between Millennials and Gen Z.
Gen Z is also more flexible than Millennials when it comes to COVID safety regulations when traveling.
Millennials do love to travel, but they are more interested in business trips than Gen Z travelers. They value the opportunity to explore unique places after they are finished with the day’s tasks. The combination of business and pleasure is not something Gen Z is interested in.
Unlike Millennials who want to mix business and pleasure, the Gen Z generation is more interested in enjoying their abroad vacation in a unique way. Due to that fact they list some very exotic destinations as their preferences. For instance, they’d like to cruise volcanic islands in the Cyclades, enjoy a desert safari in Dubai, or a bioluminescent tour of the bay in San Juan.
Lastly, we have budgeting as one remaining key difference. Both Millennials and Gen Z agree that budgeting is the most restricting factor when planning a trip. When it comes to hiring a third party to plan a trip and stay for them, Millennials were more willing to do so than Gen Z generation.
Millennials and Gen Z generations don’t value vacations in the same way. For instance, 48% of Millennials say that having a unique experience is a must-have for a vacation to be considered a favorite. At the same time, only 38% of Gen Z travelers think that a unique experience is the essential element of a great vacation.
Millennials and Gen Z don’t plan on spending the same amount of cash for the excursions and amenities available at the destination. When on vacation, 20% of Millennials have plans to spend anywhere between $50 and $100 on bonus experiences every day. At the same time, 15% of Gen Z share the same plans.
Both Millennials and Gen Z do exhibit a couple of same behavior patterns when it comes to traveling. However, there are more than a few key differences you should be aware of. Gen Z is more flexible when considering COVID safety regulations, doesn’t let the pandemic affect their plans to travel abroad, is more interested in exotic destinations, but has more limiting budgets than Millennials.