Millennials have now surpassed Boomers as the largest segment of the US population, creating a new category of “travelers on the go.” This group craves experiences that take them into the unknown. These habits are a new form of counterbalancing over-tourism, and new destinations will be considered.
Well, millennial, goodbye, boomer? While we were working on the next installment of Tiger King, one of the biggest transitions of the pandemic happened right under our noses.. It’s official in early 2020: millennials have overtaken baby boomers as America’s largest generation.
There are now 72 million millennials in the United States and nearly 1.8 billion worldwide, or a quarter of the world’s population. You can imagine this guy in your office, but in reality, the average millennial, born after 1981 and before 1996, is now 34 years old.
Mid-career millennials are nearing the peak of their purchasing power. Boston Consulting Group estimates that this generation will increase spending per capita by 10 percent over the next five years. Gen Z spending per capita will increase by more than 70 percent over the same period, while Gen X spending and boom times will decline.
It’s a well-established trend that millennials prefer experiences over things. But the less well-understood result is not just any experience. In a world where travel is more common than ever, millennials want to be seen as someone who goes beyond following the crowd and experiencing unique experiences. According to Skift Research, 70 percent of American millennials and Gen Zers seek out travel experiences that family and friends haven’t heard of. In China, this figure reaches 90 percent.
There was already a strong ferment here: part of the growing wealth combined with the desire for a unique trip. The plague has a cherry on top. Remote work has created unprecedented flexibility and made the digital nomad’s dream come true. Stir well and get a “go-anywhere traveler” and you’ve got a mid-career pilot with the discriminating ability, the wealth, and the time to go almost anywhere. just anywhere. This group craves experiences that take them off the beaten track and into off-the-beaten-path destinations.
Businesses and destinations are already working to capitalize on this new trend. Perhaps most crudely, Selina, the hostel has become a co-living apartment brand. Celina calls itself “the largest lifestyle and experiential hotel business built on the desires of millennial and Gen Z brands.”
Selina has opened or plans to open 163 properties in 25 different countries to fulfill these travelers’ nomadic dreams. In addition to traditional daily room rates, the company offers monthly packages that allow guests to stay at three different Selina properties within the same area for 30 days. Basic plan upgrades allow for more flexibility. The average subscription cost is about $1,000 per month, and Selina has sold over 5,400 subscriptions since the program launched in September 2020.
Sam Hazari, Selina’s senior vice president and head of corporate development, said its businesses are “helping to fill a consumer gap.” This is an important distinction: a long-term subscription member does not spend more per day than a regular guest, and in fact spends less. But Hazari told Skift that their free time is three to four days, while Colive subscribers stay an average of 55 days. In other words, Selina is discounting room rates to increase property utilization.
Skift Research estimates that there are 3.7 million Americans who could theoretically choose to become digital nomads. If even a small portion of this population becomes nomadic, although not all will, the impact will be enormous. Skift Research estimates that digital nomads in the U.S. can generate $972 million in annual travel spending.
With so many dollars at stake, it’s no wonder the destinations are interested. According to Skift, dozens of destinations target incentives such as exemptions from relocation fees and local income taxes. Indonesia, home to the nomadic supercenter of Bali, plans to introduce special five-year visas, while Italy has invested more than $1 billion in infrastructure in small towns to attract nomadic travelers.
Digital nomads will remain a market, but will create an aura of passion around the idea of living and working in places not yet open to mass tourism and therefore not Instagrammed.
Digital nomads are at the forefront of travelers everywhere, but millennials and Gen Z travelers are right behind them. This generation wants unique experiences and the social merit that comes from being a pioneer in one’s social group. Areas and businesses that can tap into this megatrend are well positioned to succeed.