Skift Take

When predicting current and future trends, everyone in the travel industry has their eyes on Gen Z travelers, and, boy, are they demanding.

While the millennial traveler is the most reliable, stable target audience in the travel industry today, it won’t be long before everyone turns to the Gen Z traveler, who will lead the next generation of what’s new in the travel space. In fact, many are already turning to these younger generations, in hopes to prepare for the expectations to come.

Gen Z travelers across the globe have a sense of financial confidence for travel that is frozen in time, while their ethical and moral expectations for travel experiences have continued to rise, and their digital connectivity has intensified the desire to be a trendsetter, according to a new report by YouGov. 

“The way we start to travel is the way we form different experiences,” said Eva Stewart, YouGov’s global sector head of travel and tourism. “And the pandemic has haunted that experience. They’re not willing to compromise on what they got used to when they travel with their parents, perhaps the luxurious experiences staying at nicer places, but the point is that it’s very difficult to trade down. Gen Zs will try to do everything they can to kind of retain a similar level of travel experience as they are used to.”

The Gen Z sector presents an interesting subset of travelers. Those who come from mid-to-high income backgrounds, whose earliest travel experiences were with their families, had first impressions of traveling within experiential and financial parameters that were a lot wider than the reality of traveling as a young adult, with friends, partners, or alone. Their most formative years of travel were then influenced by a factor that none of the older sectors had to experience — a global lockdown. Now, those Gen Z travelers remain somewhat stuck in their past, in expectations that were set in their younger years, without having yet experienced the reality of what independent travel will look like. 

Therefore, whether it’s due to pent-up travel desire or high expectations left untouched, Gen Zs are most eager to spend more on travel compared to those over 25, leading the way amongst age sectors in spending more on travel this year. Overall, 21 percent of global adults intend to spend more on travel products and services in the next 12 months, while the Gen Z response rate was recorded at 26 percent with millennials following closely behind at 25 percent.

“Because they got accustomed to traveling with their families, it’s unsurprising that higher-income-Gen Z’s recent experiences have been with the luxury brands,” said Stewart. “However, the majority will still be looking at that mid-tier or value-for-money types of accomodations — it’s not to say that the entire generation is price sensitive, but four-out-of-ten will still find it prohibitive to manage the cost of travel versus their desire.”

While only some Gen Zs will attempt to retain what they’ve already experienced financially, most are asking for more in other areas. Nearly half of Gen Zs seek authentic experiences that are representative of local culture compared to their older counterparts, and despite being committed to budgeting options, they are still willing to financially support the local communities within their budgets. In fact, just over a third of global Gen Zs said they prioritize spending money on local businesses and produce when traveling, which is equally on par with global over-25-year-olds, who have more financial freedom. 

This idea of giving back translates to choice of activity as well. Gen Zs are also more likely to be interested in traveling with a purpose, such as volunteering and eco-tourism, which is again, fueled by the desire to do something meaningful and give back to the community. YouGov’s Global Travel Profiles showed that Gen Z travelers in particular have a passion for understanding more about other cultures and building “real life experiences” during their travels, such as connecting with the local heritage and people. They also have higher expectations for unique adventurous experiences such as remote destinations away from crowds or mental and physical challenges in unfamiliar places.

In addition to experiences that give back, Gen Z travelers, who grew up with heightened awareness of climate change and global crises, are also looking for newer experiences that are in tune with their environment, like eco-friendly accommodation options. Thirty-eight percent of Gen Zs across the world would consider staying in a green accommodation on their next holiday, compared to the 33 percent response rate of those over 25. In addition to accommodation options, over a third of Gen Zs are also open to search for sustainable travel offers, which is 6 percentage points above the over 25 cohort.

“The biggest difference is that younger generations are also willing to take action on it,” adds Stewart. “Concern levels vary amongst generations but Gen Zs actually want to do something. They are open to potentially paying a little bit more for greener flights, and are actively looking to stay in eco-friendly accommodation more than any other generation. The more that they learn about how they can be responsible, they form new habits that become good habits and easy to follow.”

The desire amongst Gen Z travelers to seek new experiences also leads to a stronger curiosity of growing concepts in marketing, such as cryptocurrency or the metaverse. In fact, Gen Z’s tendency to be more experimental could position the metaverse as a potentially exciting place to explore “dream” travel experiences. 

“It’s unsurprising that a lot of different brands are already investing in advertising themselves in the online space,” said Stewart, “but the metaverse will be an interesting place to market destinations, as Gen Zs wouldn’t mind exploring places online that they’ve never visited. For example, younger people are very curious about certain hotel brands and would be able to see what the design and experience is like in the areas which were typically reserved for the paying guests. It’s an aspirational type of travel in its own sense.”

Awareness levels of the metaverse is currently highest among US and UK consumers, and this is particularly true for Gen Z consumers. As brands are increasingly investing in the metaverse, this will enable travelers to aspire, explore, and plan for a destination in detail.

This ties back to Gen Z’s generally low and skeptical attitude towards typical travel advertising. Nowadays, advertising requires an additional point of reassurance, and although recommendations from family and friends is the most powerful tool of influence to go to a destination, reviews found on social media are critical in Gen Z’s final decision-making.

“That is where social media is at now, perhaps less of an inspiration and more to verify that what’s been advertised to them is accurate and will match their expectations once they arrive,” said Stewart. “Many Gen Zs might find a hotel online or through an (online travel agency) OTA, but they will then go and verify whether people who stayed in the hotel enjoyed their experience, looking for that verification on Tiktok or Instagram, rather than a travel review website.” 

Because Gen Z is the first generation to have 24/7 access to the internet and digital connectivity since birth, they see the physical and digital worlds as a seamless continuum of experiences. Despite 63 percent of global Gen Zs worrying about how long they spend on social media, they still acknowledge their deeper connection and reliance on social media, which in turn affects their expectations around the desire for seamless connectivity at home and whilst traveling.

In addition, as a hyperconnected generation, global Gen Zs are more likely to be aware of new and emerging events. Therefore, sharing their new social experiences and adventures with their peers is a high priority, especially if they feel like they’ve discovered things first, as they often desire to feel like they are ahead of the curve in knowing trends.

June 29, 2022
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Tags: accommodations, cryptocurrencies, destination marketing, financials, gen z, generation z, metaverse, social media, spending, sustainability, sustainable tourism, Travel Advertising