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Recently, Skift launched a new free Trends Report, “The State of Student Travel” in partnership with Student Universe. Below is an extract from it, a great guest column from Student Universe CEO Atle Skalleberg on the lessons the company has learned working in the online travel space focused on student travel. Get the full report, for free, here.
At StudentUniverse we have focused on student and youth travel for more than a decade. This college educated, tech-savvy segment represents one of the fastest growing markets of the travel industry. It is a resilient consumer group that spends more time together than most other social or professional groups, with meaningful buying power. It is big too: Generation Y is now estimated to be the largest consumer group in U.S. history.
Student travel plays a central role in the worldwide travel economy. Study abroad programs fuel global connections, local economies and create a globalized workforce. Students often stay longer than the average tourist and are more likely to return in the future. With the age range for youth and student travel changing from its historical 18-25 to 16-30, the market is getting an increasing amount of attention.
The youth and student travel industry matters. It is not a just a set of specialized travel providers catering to small pockets of early-stage consumers. It is a $200B+ annual feeder team that supplies the big leagues with next-gen business and leisure travelers. The future of the travel ecosystem is built on the education of our youth. All of us will benefit from fueling the global interest and empowering more people to travel.
So what have we learned after more than a decade catering to student/youth travelers and what are some of the key trends as we look to the future?
- Digital will be it. All of it. Students are already tech-dependent and early adopters. We have seen this in their adoption of mobile commerce and the sharing economy. Millennials will continue to lead the travel market away from offline and traditional sales channels, setting trends for other segments and shaping corporate project plans. Current offline experiences like specialty travel stores, in-market activities, dining and accommodations will also be ruled by digital experiences.
- Young people age too. We are already seeing growing investments from key players in the market. Emerging airlines, destinations and hotel chains challenged with an aging customer-base, like nations dealing with aging populations, are investing heavily in millennials – the future business and family travelers.
- Travel patterns and destinations will change. A decade ago most North American spring break bookings were to a handful of domestic and international destinations. Now students travel to all corners of the world. The future of student travel is truly global and travel patterns will resemble what has already become the norm in more liberal and isolated markets such as Australia and Scandinavia. What’s considered adventurous today will soon be common. BRIC will no longer need an acronym. North America and Europe will be challenged by Asia as the premier education travel destinations. The Middle East will move from an emerging hub to the world’s most common connection point.
- Experiences will be more important than landmarks. Students will travel for authentic and unique experiences that can help them accelerate personally and professionally. In a globalized economy employers will want to see global immersion. Over the past decade volunteer, adventure and educational travel has grown exponentially – this is a trend that will only accelerate.
- Young populations will come online. Many nations, such as Japan, are challenged with aging populations. Other nations, like Vietnam and Thailand, have massive groups of young people – and they are about to come online like never before. Online, as in skipping their desktops and going straight to their smartphones and online as in traveling the world. Low cost carriers, deregulation, growing middle classes and a digital revolution will make what seemed only a dream possible: To travel the world.
- Big brands will die because of young brats. Although that may seem like a bit of a tabloid statement, it’s not. This is nothing new, many brands have failed to keep up with consumer demands as generations shifted. It’s a cycle of life really – only this time it’s fueled by technology and an increasingly impatient, yet well-educated audience. Users want seamless tech services and they are only loyal to something worth being loyal to. They are tech dependent and they’ll expect their favorite services to work everywhere. They will want a global experience. Why can’t I use Uber in your city? Why does it cost so much to use my phone abroad? A plane without wifi? Why does a hotel room cost more than an apartment? Why don’t you have a student discount? Apple has one. Where can I study abroad, mom?
- Student debt will become a hot topic in travel too. More than 40 million Americans hold student debt. Since the dot-com-bubble days, the average student debt has more than quadrupled. Needless to say, salaries have not. As the total cost of college continues to increase debt will follow. According to several consumer expenditure studies, student loan payments are now greater than many other spending categories, such as entertainment and apparel. College, when financed correctly, is certainly a phenomenal investment in future earnings. That said, too many students will graduate with a level of debt that will impact their discretionary spending patterns and therefore the travel industry. Such debt levels will also continue to impact parents.