If you're a young travel company that wants to grow, riding the demographic rise of millennials can be the smartest path — with a fresh approach.
Millennials — and people with a millennial mindset — are fueling the growth of travel startups and other young companies that target them.
Marketing to millennials, defined as being born approximately between 1981 and 1996, is often more cost-effective than targeting baby boomers and members of Generation X — even though the older groups typically have more disposable income. The cost of reaching older audiences is higher because there’s more competition, as established travel companies pour money into attracting those groups through buying ads on Google or TV.
A look at travel startups such as AvantStay, Explora Project, Luxury Travel Hackers, SnapTravel, TripScout, and Turo shows that startups can achieve growth by appealing instead to millennials. The trick is to offer distinctive features and functionality appealing to their changing preferences and needs and then growing through word of mouth on social media.
“We don’t fight for keywords to rank first for searches on ‘adventure travel,'” said Stanislas Gruau, the CEO of Explora Project, an adventure tour company based in Annecy, France.
“Google is for the old generation,” Gruau said. “Who is typing ‘adventure travel’ on Google to find something cool? Seriously: no one.”
Millennials are both much discussed and much ignored by the largest travel companies, despite their being the largest demographic flying before the pandemic, said Alexander Grous, an academics associate at LSE Enterprise at the London School of Economics. They made up one in four flyers in 2018.
Many millennials turn to social media first for inspiration and help in planning trips. Many appear to follow travel influencers on social media to keep current on destinations and vacation options.
In response, Luxury Travel Hackers (LTH) works with social media influencers. It helps them share their travel experiences by creating videos and other content that millennials share on Instagram, Facebook, TikTok, and YouTube. This format is a more engaging way for some younger consumers to learn about vacations that will appeal to their interests and budget.
Many millennials embrace group travel, but some find it cumbersome to book group travel on the best-known global travel brands. So AvantStay, which offers bookings at vacation rentals, targets millennials by making it easy to split the payment costs of all parts of the stay — a common pain point for millennial trip organizers.
The focus has paid off. AvantStay, a short-term and vacation rental brand focused on helping people plan, book, and enjoy group trips, has seen significant growth. In the past year, AvantStay has gone from 50 employees to about 250, with hiring for another 100 underway.
Another company to watch is SnapTravel, which offers hotel deals over messaging services such as WhatsApp and Facebook Messenger. Co-founder and CEO Hussein Fazal said his company is reimagining hotel booking as something done “entirely via conversations with brands” over SMS, iMessage, RCS, Viber, Slack, WhatsApp, Messenger, and Alexa.
Millennials have a reputation for being more willing to try something new than older generations. That’s benefited Turo, a peer-to-peer car-sharing marketplace.
Just as millennials helped drive Airbnb’s early growth by being early to rent out spare rooms to strangers, millennials are also the largest group renting out their cars during spare hours on Turo. To cater to millennial preferences around environmental issues, the San Francisco startup said in April that it had begun to offset an estimated 100 percent of its global carbon emissions by buying carbon offsets.
Embracing rather than overlooking millennials has worked for Turo, which raised $280 million in its recent Series E round, and it plans to go public this year, a spokesperson said. The company’s rapid rise underscores how many millennials are looking beyond the traditional ways of renting cars. The company’s European rival, Virtuo, has benefited similarly by focusing on millennials.
Tripscout, a travel startup, pioneered the science of “search engine optimization for Instagram.” Many millennials use the image-sharing service more for travel discovery than Google. Tripscout garnered more than 200 million views per month on social media in 2020. It recently surpassed more than 1 million users of its mobile app, said co-founder and CEO Konrad Waliszewski.
Many millennials crave experiential travel, and that interest makes some of them curious about multi-day adventure tours. Yet the multi-day tour business remains mostly offline, with many manual processes handled by agents. Aiming to digitize the booking process for multiday tours is Tourlane, backed by top-tier venture firm Sequoia. One of Tourlane’s innovations has been to bring real-time pricing online. Another has been to help travelers visualize trips and make drag-and-drop adjustments to itineraries. Rival TourRadar has been making similar efforts.
Focusing on millennials can be a good business strategy. More than one-third of millennials save so they can travel, compared with just 10 percent of baby boomers, according to a pre-pandemic survey for The Wall Street Journal conducted by MarketCast.
Photo credit: Guests who have rented a car via peer-to-peer car rental marketplace Turo, which aims to go public soon. Turo