Generation Z waits on the horizon, the next biggest generation...
The global pandemic basically placed travel on pause for roughly two years. While there have been ups and downs, it’s safe to say that travel has not yet returned to the levels originally expected for 2020. Even pre-pandemic, there were discussions on how Generation Z would change the travel industry. And they’ve now had two additional years to think about how they travel, where they want to travel, and plan accordingly. Gen Z’s pent up travel demand, like a volcano on the verge of erupting, will change the industry for sure, and you’ll want to make sure you change your tour business along with it.
Why Accommodate Gen Z now?
Gen Z will be the largest generation in the United States by 2034. If they follow that trend in other countries, Gen Z will likely be the largest global generation within the next 15-20 years. Even though they are not yet the largest generation, they already have immense buying power. Gen Z is estimated to spend more than $140 Billion in the US alone and they have not yet reached their prime working years, which are due to start this year and go into the 2030s. With so much buying power already, you can only expect that to increase as more Gen Zers enter the workforce.
How does Gen Z want to travel?
First and foremost, Gen Z is always looking for their next unique experience. A typical, run-of-the-mill tour is just not going to cut it with this generation. They’re looking for experiences unlike anything else. If you’re offering tours in exotic locations or focusing on exotic foods and cultures, you’re going to have an easier time meeting this need than others. For operators in saturated markets, however, offering tailored or bespoke tours is going to be a fantastic way to meet this primary need. If you can’t offer a completely customized experience, you could instead offer some unique upsells and allow them to choose which addition would make the tour a unique experience for them.
According to Phocuswire, 3 in 4 Gen Zers are looking for tour companies that value diversity and inclusion, and authenticity is very important here. Any company can talk about inclusion, but Gen Z will know the difference between true inclusivity and false promises. What does authentic, inclusive tourism look like?
- Your tours are accessible. Any impairment of any kind should not stop a person from enjoying the amazing experience of travel. Make sure to have an accessible website as well so they can book the tour without any trouble.
- Encourage LGBTQ+ inclusion and diversity among all destination stakeholders, and make sure to include transgender and non-binary communities in that inclusion. The inclusion cannot stop at just your company. Choose your partners wisely and Gen Z will reward you.
- Include your local community! Especially when your tours relate to culture or food, it’s important to have the local story told by locals. Creating an authentic local experience is also a great way to stand out from the competition and hit Gen Z’s primary need for uniqueness. Local inclusion is also important to the Millennial market, so this one should not be news to you!
Gen Z are outspoken defenders of the historically downtrodden. Join the movement or you can expect them to avoid your business.
Sustainability holds great importance with the Millennial market, but it’s even more important with Gen Z. Phocuswire also points out that Gen Z seeks out travel businesses that prioritize environmentally sustainable practices. Sustainable tourism should not be a new concept for you, but if it is you’re well behind the curve, and you’ll severely underserve the Gen Z market if you don’t catch up. Sustainabletourism.net explains that sustainable tourism consists mainly of refocusing and adapting. Hopefully, you’ll have taken some of the free time given by the pandemic and put some thought into how your tours affect the environment and community around them, but if you haven’t now is the time to do so. Again, Gen Z will call your bluff on empty promises so when you’re thinking about how to approach sustainability for your business, do so from an authentic place of mind rather than thinking how it will make more money. Chase authenticity in sustainable practices and Gen Z will follow.
Gen Z travels for longer stretches of time. Trends in workations and trip-stacking are evidence that Gen Z enjoys longer vacations. Working during the day allows them to stay longer and spread out their experiences into the nights – with less travel time cutting into the trip as it would a weekend getaway. As the pandemic made full-remote jobs more popular, you can expect workations to be a trend that sticks around. Offering tour options that cater to workationers are a great way to meet growing Gen Z demand. Trip-stacking, or booking multiple trips back to back, signal that when not working, they’re open to spend more time away from the office. If you offer multi-day options, consider lengthening them or making it easier for them to be stacked with other tours you offer. Gen Z doesn’t feel fulfilled with short stays or tours when they travel. They’re going to want to spend more time getting a deeper feel and attachment to wherever they travel.
Offering active or extreme tour options are another way to tap into Gen Z demand potential. When they arrive at their destination, they do not want to be idle. Gen Z seeks out active experiences that engage their body as much, if not more, than their mind. Travel Market Report states that 64% of Gen Z exercises on a regular basis, and they don’t compromise that lifestyle when on vacation. Offer tour options of varying levels of physicality and don’t be afraid to throw some adrenaline-pumping options in there either. Booking.com found that 56% of Gen Zers want an adventure experience while traveling, such as paragliding or bungee jumping, and 52% plan on visiting or trekking to an extreme location. Gen Z, however, will not definitively spell the death of leisure travel. Let them find leisure on their own time, and when they’re with you don’t refrain from testing their limits.
This should come as no surprise, but Gen Z are absolutely digital natives. They’ve grown up with technology at the forefront with social media and mobile phones playing immense roles in their lives.
You can expect Gen Z to prioritize different social media platforms than other generations, specifically Snapchat and YouTube. Instagram still holds great importance to Gen Z, but Snapchat and YouTube are not in the top platforms for any other generations, and you can’t disregard the fact that TikTok continuously rises in popularity. Phocuswire even thinks that TikTok may be a vital key to the recovery of tourism as a whole. The different platforms will require different strategies. You’ll have a tough time using the popular user generated content tactic on Snapchat and YouTube, for example. Influencer marketing, however, will hold greater power among Gen Zers and there are already huge influencer communities on all of Gen Z’s preferred platforms. Snapchat, according to Skift Research, will be the best among Gen Zers for travel accounts and influencers. Simply put, Gen Z refers to their social media idols for advice and direction on where to go and what to do when they get there. Looping back to local experiences, using local influencers is a fantastic way to hit two birds with one stone. Another power coupling will be using influencers to emphasize the unique experiences you offer.
Millennials had a mobile-first approach as well, so it should not be news that your booking experiences need to be optimized for mobile! Gen Z will go from social media on their phone – to booking on their phone. If they can’t land on the site and get all the way to a receipt from their phone, you can expect to miss out on Gen Z demand. Not having digital payment methods in general will severely affect your ability to connect to Gen Z, and while it’s still young cryptocurrencies may be a large differentiation between digital payments between generations as well. Consider creating landing pages for each social media platform and make sure to make those your bio links. For someone coming from Instagram, for example, they’re likely going to be more interested in seeing your stunning photos, but someone coming from YouTube may be more open to seeing longer-form video content. Make sure to emphasize testimonials on the pages as well, with an emphasis on any testimonial praising your company for its inclusion and sustainable practices. For visitors who find your website first, make sure that social media is integrated into the mobile site especially, so they can easily go from the site and decide to go with your company based on social media content.
OTAs and Gen Z
Unfortunately, Gen Z tends to be more fond of OTAs than other generations. Phocuswire explains that their stronger affinity toward OTAs in general comes from Gen Z’s price-sensitivity and brand-agnosticism. They’re less likely to invest directly in a brand no matter what, and while this is beneficial for the way OTAs are set up it can actually work better for small operators looking to move ahead of larger competitors that can afford to offer tours at lower prices. Interestingly enough, HubSpot points out that one of Gen Z’s top spending habits is on small businesses, so all hope is not lost. The task at hand will be getting the push for supporting small businesses to extend further into the travel industry. Inclusion ties back in here as well, as an authentic portrayal of a community of small operations helping each other out can be extremely successful, especially in the shadow of a global pandemic where Gen Z grew up watching and largely believing that selfish companies will doom this world. Maybe some OTA controversy can end up in favor of small operators in this case as well. If you do list your tours on OTAs, however, you can also try to use that platform to try and push people directly to your site to book. This generational relationship is certainly still not fully defined, so it will be interesting to see how OTAs and Gen Z develop together over the coming years.
One of HubSpot’s additional findings on Gen Z spending habits was the propensity for discounted goods and services. We know that Gen Z wants unique experiences, but they are still going to look for value in those experiences. Keep this in mind when pricing your experiences, as Gen Z will spend the time searching for the most value. Considering their lack of preference in brands you won’t be able to upcharge for your brand alone, no matter how established it is. Email marketing will still be a strong tactic with Gen Z due to their willingness to open emails that promise discounts on experiences they’re planning to purchase. HubSpot even mentions that a good portion of Gen Z will specifically wait until something goes on a discount to buy it. Use the promise of discounts to get Gen Z to sign up to a newsletter on your site, and deliver on that promise to experience Gen Z’s buying power. Relating back to the importance of value with Gen Z, discounting the price can directly affect their viewpoint on the value of your tours in comparison to competitors. A unique, personalized experience with a discount tag is sure to catch any Gen Z traveler’s attention. While offering tour discounts are not ideal to any business, think of it this way: you’re more likely to get a higher volume of Gen Z bookings at a lower profit margin, but if you don’t offer discount options you may largely miss out on the next biggest generation.
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