If you saw growth in travel spending plateau this past summer, you’re not alone. Our 2018 Vacation Confidence Index predicted flat growth for summer vacation spending in 2018. However, summer spend was still expected to top $100 billion for the second year in a row.
The biggest trend we’ve seen is a shift to more domestic vacations and fewer international trips, likely driven by the increased safety risks of traveling abroad. For this reason, Americans are looking for advisors to suggest popular and exciting domestic destinations with major attractions in cities that have a lot to offer
Millennial Families Traveling More Than Ever
The hot spot in today’s consumer travel market comes from not just Millennials but Millennial families, who now make up half of their generation. In 2017 these families spent an average of $5,300 on vacations, which added $50 billion to the leisure travel market. Surprisingly, Millennials with kids are traveling and spending significantly more. In contrast, spending by those without kids—couples and singles—has and may continue to decrease. Millennial families say they’ll spend nearly 40 percent more than couples on vacation and nearly 90 percent more than singles in the next year.1
So think about that young couple you helped book their honeymoon at an all-inclusive Mexico resort a couple years ago. You might want to pitch them on the idea of a week-long beach vacation with their toddler to Fort Lauderdale.
As Millennial families juggle work demands, young children, and family life, unexpected events can easily arise that disrupt their travel plans. An annual study by MMGY called “Portrait of American Travelers” shows that Millennials are the generation most likely to protect their trips today, with a slight increase expected in the year ahead.2 And as you might expect, Baby Boomers are the next biggest demographic that buys trip protection.
How do you position travel protection to a Millennial or Millennial parent? Like the majority of travelers, they’re concerned about having to cancel their trip, particularly due to an illness or to take care of a sick family member, so Trip Cancellation benefits are important. Younger travelers also are concerned with what might happen during their vacation, such as flight delays and baggage loss or delays.3
As the Millennial family demographic grows, travel agencies and advisors should be thinking about how they can optimize their marketing efforts to reach this crucial, growing segment.
1. Portrait of American Travelers, MMGY Global, 2017
2. Portrait of American Travelers, MMGY Global, 2017
3. Allianz proprietary research, July 2018