What do Gen Z travelers want from online travel brands?

Travel brands eager to engage with young consumers have for years focused on one key segment: millennials.

Cut to 2021, and many of those consumers — now climbing in age between 25 and 40 — are balancing the costs of families and mortgages on top of extracurricular spending.

And while millennials still hold significant spending power, their young-adult status has been eclipsed by a new generation, one that doesn’t know a world without internet and will be critical to the travel industry’s recovery from the coronavirus pandemic.

To capture the attention — and dollars — of Generation Z, travel providers need to understand how the generation’s distinct preferences and attitudes influence their travel planning and spending habits.

The OTA effect

According to Expedia Group, nearly two-thirds of Gen Z travelers, defined as those born between 1997 and 2012, are planning “revenge travel” to make up for lost trips amid the Covid-19 crisis.

To plan their travel, Expedia Group finds that Gen Z consumers are turning to online travel sources, specifically online travel agencies, 31% more than they were prior to the pandemic.

“This very much aligns with Gen Z’s position as the first digitally native generation,” said Monya Mandich, vice president of Expedia Group Media Solutions Marketing.

“They are frequent mobile users and digital content consumers, so turning to online resources for trip inspiration and planning makes sense with their overall behaviors and preferences, and we expect this reliance on digital will continue in the years ahead.”

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Similarly, the Phocuswright Research report Gen Z Travelers: A Breed of Their Own revealed that when it comes to planning travel online, Gen Z travelers prefer OTAs for their dynamic packages and loyalty programs.

According to the report, more Gen Z travelers booked air, hotel and car via an OTA than any other online channel like direct websites, metasearch or retail travel agent websites. In fact, more than one in three Gen Z travelers booked a dynamic package in 2020, the highest occurrence of any generation.

Although Gen Z travelers are the least likely to be loyalty members overall (according to Phocuswright, 28% have no travel loyalty memberships), OTA loyalty enrollment is higher among the segment than nearly all other generations: 28% of Gen Z travelers are OTA loyalty members, trailing closely behind an OTA membership rate of 33% among millennials.

Gen Z travelers are also more likely to reach the upper echelons of status in OTA loyalty membership programs compared to their status tiers in frequent flier or hotel loyalty programs.

“Our research has long shown that younger travelers have a stronger affinity to OTAs in general for planning and booking, since they tend to be more price-sensitive and brand-agnostic. Thus in line with that, they would use the OTAs more to book multiple trips than a single supplier brand,” said Phocuswright research director Alice Jong.

Beyond OTAs, Phocuswright found that Gen Z travelers are more open to other intermediary options such as booking via Google or travel subscriptions.

Though their use of Google Travel’s booking function is still low compared to other channels, nearly one in 10 Gen Z travelers reserved a hotel room in 2020 through Google’s booking function.

Meanwhile, 46% of Gen Z travelers — who are accustomed to subscription services like Amazon Prime and Netflix — say they are likely to spend up to $100 annually to join a travel subscription service.

The Gen Z future

Not only do Gen Z travelers have unique planning and booking habits, but they also have distinct travel priorities and preferences.

According to Expedia Group, themes like inclusion and diversity, as well as a growing awareness of sustainability, are an increasingly important part of the travel conversation with younger consumers.

A recent survey from the online travel giant found that three in four Gen Z Americans are looking for the company they book travel through to value diversity and inclusion; Gen Z travelers also want to see the locals in the destination they’re visiting value these ideals.

“Showcasing a commitment to inclusivity and sustainability comes down to authenticity and consistency, because consumer expectations in this space are growing, and especially important to younger travelers,” Mandich said. “As younger consumers increasingly value inclusion and the industry continues to serve a more diverse customer base, destinations and travel brands must be part of that conversation.”

• Related: Virtuoso data: Younger travelers ready to get back on the road

On the sustainability front, a recent Expedia Group Travel Outlook found that Gen Z travelers are leading the charge in sustainable travel (67%) and are much more likely than other generations to consider sustainable travel options at least some of the time and are seeking out travel businesses that prioritize environmentally sustainable practices.

Safety and having unique experiences also top of mind among Gen Z travelers: According to a recent survey from GetYourGuide, 57% of Gen Z travelers said safety is their top concern surrounding travel plans.

Meanwhile, 38% of Gen Z consumers cited unique experiences as having the greatest impact on their favorite vacations. However, they are not budgeting as much for that element of their trip compared to other generations, with just 15% of Gen Z travelers saying they are budgeting $51 to $100 per person for each day of experiences on a trip.

Ultimately, over the past year, Gen Z travelers have “received heightened attention for their massive influence and growing buying power,” Mandich said.

“As we think about the future of the travel industry, we have to expand our viewpoints and offerings to reach travelers of all ages and backgrounds, because younger generations are the travelers of today and tomorrow.”

Source: PhocusWire

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