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Generation Z makes up a quarter of the population, they have abandoned Facebook and have an eight second attention span. Sally White ponders the likely impact of travel’s next big thing.

Young people Social Networking at Cafe

In a timely January heads-up call on the speed of change in online travel Allied Market Research reminds us that young travellers are getting younger. Not millennials, but Generation Z (Gen Z) are increasingly going to be the disruptors of the status quo now. The wise are already sussing them out.

Gen Z’s were born late 1990s to the 2010s and they outnumber millennials. Already Lucie Greene, worldwide director of the Innovation Group at J. Walter Thompson, has been quoted calling them “millennials on steroids”.

The young millennials are not to be sniffed at, of course. Overall the 22 to 31-year-old millennials, it says, are worth around $200 billion. Yet, expanding on the Gen Z theme, the Digital Tourism Think Tank (DTTT) points out that they currently form a quarter of the population and by 2020 will account for 40% of all consumers. The DTTT’s comment that “they will represent a big share of the market” seems an understatement!

‘Be prepared’ is DTTT’s message – they are very different to millennials.

“Gen Z is a multi-tasking and a multiple screen generation (TV, iPhone, laptop, desktop, iPad etc) with a really short attention span of eight seconds. That is something that marketers should carefully consider when creating content for that generation.”

“Gen Z also approach social media in a different way compared with the previous generation. They give high value to privacy and prefer apps like Snapchat and Whisper. Even more interesting is the fact that 25% of this generation abandoned Facebook in 2014. This is because Gen Z spend most of their time looking for content on social media instead of social networking. Also, apps like Youtube and Instagram are the most preferred ones.”

“We are in front of a generation that doesn’t only share things, but creates things. Gen Z can be defined as ‘curators’, they want to contribute to the conversation and be part of it.”

Connectivity is a basic for Gen Z – at every stage of a trip.” It’s clear now that Snapchat is here to stay. But few travel brands seem to have understood why or what to do with it,” says DTTT.

Low-fare airline Wow Air targeted Gen Z with a campaign encouraging consumers to show off their Snapchat skills for the chance to be a content creator and travel the world! Marriott Hotels is one of the first hospitality brands with a presence on Snapchat. W Hotels, from Starwood, became the first hotel brand to launch Snapchat sponsored Geofilters, notes DTTT. They can now be used at all W Hotels and the brand help promote activities, perks and experiences.

Another observer of Gen Z, the Huffington Post, reports that: “Gen Z will be more conservative with their money, though not fearful of splurging on trips that enhance their views of the world…”

Digging further it notes that: “Gen Zs watch two times as many videos on mobile than other generations, and 70% spend a hefty two-plus hours on YouTube per day, says Upfront Analytics. It’s not surprising that streaming video will account for more than two-thirds of all consumer Internet traffic by 2017 (Source: Cisco). As travel companies respond to this trend, we’ll have a lot of inspiring videos of exotic destinations to look forward to, folks.” Otherwise, compared to millennials, analysts find them more cautious, more money conscious and more face-to-face – 53% of Gen Z preferring personal communications over instant messaging or email.

Focus on rail

Another focus of the Allied’s research is rail. Though admittedly less of a shock to the system than this demographic upheaval, with change happening slowly, there have been some recently interesting moves. One of the biggest signals, come in a major move from Expedia, which has launched a rail ticketing service in Europe to mark its presence in rail services.

According to the Financial Times, Expedia reckons the train market to be worth $130 billion. Though nothing here is easy – Expedia must crack a complex technological task. It has had to set up IT programmes to produce a search engine that can analyse rail schedules and systems across multiple train operators and countries. Expedia needs to be able to offer comprehensive options for rail travel in the way millions of consumers have come to expect when booking airfares.

Dara Khosrowshahi, chief executive of Expedia, was quoted by the FT as saying it was investing a “considerable amount” in its new rail business because it is a “major market with few global competitors, which we think translate into a material opportunity”. He added: “We see [rail] as a growing segment, one of the fastest-growing travel sectors in Europe. It is gaining importance all around the world and for us it is an additional way in which we get more touch points with our customers.”

That leaves India from Allied Market Research’s heads-up list. Its forecast is a stunning growth rate of 18.5% CAGR in the period 2016-22. The Indian tourism and hospitality industry has emerged as one of the key drivers of growth among the country’s services sector.Expansion of the e-visa scheme is expected to double the tourist inflow. Looking at sectors, India is projected to be the fastest growing nation in the wellness tourism sector in the next five years, clocking over 20% gains annually through 2017, according to a study conducted by SRI International.

However, standby for a new star – travel location! Believing that online travel growth paths are clear is a snare and delusion!

Image credit: YouthLogix

Source: EyeforTravel January 2017