Generation Z will replace millennials as the largest spenders on travel experiences. So how can travel companies build mobile apps that capture their attention, loyalty, and revenue?
Travel apps will have to cater to a new generation
Millennials are – famously – more interested in spending cash on experiences than physical objects, which is great news for travel companies.
But millennials are about to be surpassed by Generation Z, who will comprise 32% of the global population in 2019 – overtaking millennials at 31.5%. So what does this mean for companies in the travel sector?
It should go without saying that Gen Z – born between 1995 and 2005 – are digital natives who have grown up with the internet. They also prefer to spend money on experiences rather than physical objects, like millennials – born between 1980 and 1995.
But there is a range of differences when it comes to how they consume media and spend money – so travel companies should pay attention to delivering a great mobile experience that can make apps competitive and profitable.
Travel apps should offer great deals on-the-go
Research by Adobe shows that Gen Z views themselves as budget-conscious and adventure-seeking travelers – more than any other generation. They grew up during the post-2008 economic crisis and therefore they’re more price-conscious than millennials.
They’re also impulsive. They book trips at short notice and expect to make changes to their accommodation, transportation, and itinerary as they go along, via mobile. In part, this is driven by their desire for personalized and unique experiences. In fact, they’re 55% more likely than other generations to change their itinerary on the go – and 65% ‘always’ have their mobile on.
Interest in location-based notifications of discounts and activities:
- Gen Z 50%
- Overall 34%
‘Data-driven marketing is going to evolve because Gen Z sees travel as a “series of decisions” and they are willing to make those decisions throughout the trip’, according to Julie Hoffmann, Head of Travel and Hospitality Strategy, Adobe.
Travel companies that allow flexible changes to itineraries within their app and offer targeted short-notice deals are likely to capture more revenue from impulsive Gen Z travelers.
Traditional rewards aren’t appealing to Generation Z
Airline and hotel loyalty programs might be popular with older generations, but they don’t appeal to Gen Z – who lack the patience for earning rewards slowly.
Signed up to airline loyalty programs:
- 45% Baby boomers
- 15% Generation Z
Signed up to hotel loyalty programs:
- 60% Baby boomers
- 25% Generation Z
However, Gen Z are twice as likely to belong to niche loyalty programs. They seek authentic experiences and they’re keen to build more meaningful relationships with brands that they resonate with.
Developers will have to gain the loyalty of this group by providing them with relevant services, according to Hoffman.
Travel companies should leverage social media activity
Gen Z travelers use social media even more heavily than millennials – and it inspires their travel destination choices.
More than two in five (41.6%) Gen Z travelers have chosen a destination because they saw it on social media, according to Expedia. And nearly three-quarters (72%) visit YouTube daily – while only just over half (52%) of millennials do the same, according to Civic Science.
Gen Z also love to share photos and videos of their travel activities on social media:
- 66% share experiences while they’re traveling.
- 62% share via mobile after the trip.
‘They [Gen Z] have a propensity in wanting new services from travel companies to support the entire trip process and especially post-trip and being able to capture photo and video moments.’
– Julie Hoffmann, Head of Travel and Hospitality Strategy, Adobe
Travel apps that leverage social media to drive bookings, and enable users to share their experiences seem likely to enjoy increased engagement and bookings.
Travel apps should become all-in-one service providers
All-in-one travel apps are extremely popular with Gen Z travelers, with nearly nine out of 10 describing them as ‘helpful’ – which offers travel companies a huge opportunity to upsell extra services. Adobe also found a range of related features that interest Gen Z travelers.
What do travelers want their travel apps to do for them?
- 55% want their apps to help them budget for their trips.
- 46% want to use their app to book, track, and manage the full trip.
- 45% want their app to capture and organize their trips.
By enhancing a travel app with the ability to book every service that a trip might require, travel providers can deliver a great experience, lock-in their customers, and increase their revenue.
Unlike some other industries, travel apps continue to grow in terms of both downloads and monthly users. 82% of travelers questioned by TravelPort said they plan to download the same number or more travel apps than they did during the previous year.
Travel app users clearly have high expectations and a desire to book personalized, flexible trips at short notice, built around their social media activity. Travel providers that understand these desires and build app features to accommodate them will stand out in the marketplace.