Industry Update
Opinion Article16 July 2020

Recovery Is When Gen Zers and Millennials Travel for Business

By Linchi Kwok, Associate Professor at The Collins College of Hospitality Management

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Gen Z and Millennials are key to travel industry's recovery - That was the headline of a Travel Pulse report, which quoted a GlobalData survey. The survey suggests that younger and wealthier travelers would be the first to resume international leisure travel when the COVID-19 restrictions are lifted. Both generations belong to the younger group of travelers, with the oldest Millennials just turning 39 this year.

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That assumption is probably right, but Gen Zers and the Millennials have their concerns too. For example,

Gen Z - "A worried generation"

Gen Zers are those who were born after 1996 or 2000, depending on where the line is drawn. Even using the cutoff line of 2000/2001, Gen Zers make up 32% of the world population, above the Millennials at 31.5%.

Gen Zers have never lived without terrorism since the 911 Attack. They grew up from the Great Recession. As a result, they are less likely to take risks than previous generations. Some even called Gen Zers "a worried generation."

During COVID-19, Gen Zers may feel more inclined to stay in a safer environment, such as hotels offering high cleanliness standards. They may also prefer "glamping" over camping, a new trend where travelers immerse themselves in nature but with luxury amenities.

According to another recent survey, Gen Zers showed more concerns about their health and well-being than other generations. The top "life moments" of Gen Zers (ages 18 - 23 in the survey) are:

  • Travel somewhere new (23.8%)
  • Buy a house (23.8%)
  • Earn a diploma, degree, or certification (23.8%)
  • Spend more time with friends (23%)
  • Reach a health goal (22.2%)
  • Have a child/children (22.2%)

Meanwhile, Millennials, Gen Xers, and Baby Boomers all take having a child/children as their top life moment, at 36%, 42.6%, and 40.6%, respectively.

The above evidence leads to that conclusion that Gen Zers indeed want to travel, but they are also more cautious about safety. It is hence not surprising to see some Gen Zers traveling with gears like N95 masks and hand sanitizers. Likely, they will choose luxury or chain hotels with enhanced cleaning standards for post-pandemic trips.

The Millennials

Pew Research Center released the results of a survey about Americans' attitudes toward foreign countries among four generations a few days ago. The opinions of Millennials (born 1981 to 1996), Generation X (1965 - 1980), Baby Boomers (1946 - 1964), and Silent Generation (1928 - 1945) reveal that:

  • Millennials remain most positive towards China and Russia, although the percentage of those who have a favorable view of China and Russia dropped dramatically since 2005 across all four generations.
  • The percentage of Millennials who have a favorable view of international organizations is significantly higher than the other three generations. For example, 70% Millennials vs. 60% Gen Xers and 57% Boomers have a favorable view of the United Nations.
  • Older generations are more likely to say the U.S. is exceptional, although the percentage of those who say the U.S. stands above all other countries in the world had dropped across all generations, where Boomers dropped 2% only to 37%, Gen Xer dropped from 39% in 2011 to 26% in 2019.
  • Most Americans still see the U.S. the world's leading economy, in which 51% Millennials, 61% Boomers, 63% Silent Generation, and 66% Gen Xers said so.

Overall, Millennials feel more positive (or less negative) about China, Russia, and international organizations. So, when the travel restrictions are lifted, younger Americans might not feel as reluctant to visit an international destination for leisure purposes as the older generations would do.

A recovery that needs a boost from domestic business travels

Gen Zers and Millennials make up more than 63% of the world population. The oldest group in these two generations is turning 40 in 2021. It is almost certain that travel recovery must rely on younger and wealthier travelers.

According to the STR weekly hotel performance data ended on July 4, however, hotels were still doing better on weekends than on weekdays. Luxury hotels were running at a much lower occupancy than the economy hotels. Moreover, luxury and upper-upscale hotels were losing market shares to the economy hotels.

When the U.S. continued to report record-high new confirmed coronavirus cases, travel activities for sure will slow down again. Some states even re-imposed lockdown amid the spike of new infections.

The U.S. Travel Association reported that direct spending on business travel in 2019 reached $334.2 billion and supported 2.5 million jobs in the sector. That's about 42% of the direct spending on leisure travel ($752.4 billion) and one-fourth of the jobs created by leisure travel (6.5 million).

Unfortunately, few people are traveling for business these days, and the outlook for business travel is not bright either. Until people are traveling again for business, there is no real recovery for the travel and hospitality industry.

Do you think Gen Zers or the Millennials will become the first group to travel when the pandemic is over? If so, will they travel more for leisure or business purposes?

Linchi Kwok

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