Global youth travel market booming, as backpacker dollars add up
The stereotype of the youth travel market is chock full of dreadlocks, penny-pinchers, and party hounds – typically derided as a particularly non-lucrative market. However, as the global dollars add up, the true power of the youth travel dollar is enormous.
A new report from the WYSE Travel Confederation, New Horizons III, is the third iteration of a youth-focused travel overview, outlining the size, reach, and impact of this growing segment. 37,000 responses were recorded from 137 countries, making this one of the most comprehensive collection
The report’s Foreword, written by Director General David Chapman, highlights the current state of the youth travel market:
“The value of Youth Travel in 2007 was estimated as $143 billion and at the end of 2012 according to the UNWTO, this had risen by 28% to $183 billion with young people accounting for nearly 20% of all international arrivals.”
With young travelers accounting for 1 in 5 international arrivals, there is clearly a significant market share already existing – allowing design-and-value focused hospitality brands to use this new math to thrive with updated, modern products.
Flashpacking, backpacking and technology
The trend towards design-conscious budget accommodation – from boutique hotels to design hostels – is also key to this sector’s growth. It’s much easier to travel these days, in the sense of the quality of accommodation. Rather than only ramshackle hostels, the young traveler these days can choose a variety of styles, across price points, that allows market segmentation even in the youth market.
This has also led to a new term, flashpacker, which refers to the more well-heeled youth traveler that generally totes a larger budget alongside the large backpack. The report quotes previous research that classifies flashpackers as those with a $1,000 per week budget, who also travel with technology. This research found that 75% of these flashpackers carried laptops, and thus preferred hostels with WiFi.
In Australia, however, traditional backpacking remains vibrant with an average stay of 71 nights in 2012. This is clearly a huge destination for long-term low-budget travelers, and a market that is showing increase even away from traditional backpacker routes like Australia/New Zealand.
Technology has become indispensable for all segments of these travelers, as the vast majority now books their travel and accommodations via the Internet. This is an enormous shift from the original report in 2002, when less than 10% regularly turned to the internet to book. Technology is also allowing mid-market destinations to directly
Mobile remains a small portion of these numbers, with 56% of surveyed travelers using broadband to book travel. However, this share is growing, especially as more travelers choose to carry smartphones and tablets over laptops as they travel.
Particularly revealing as far as technology, booking and the youth traveler is this graphic segmenting the medium of booking for air travel. In person at a travel agency and phone are still holding their own as popular mediums – likely due to the relative complexity of many longer-term itineraries. However, the growth in mobile penetration alongside better acceptance of travel apps, is bound to changes these numbers for this cohort.
Other factors in increased youth travel: security via smartphone and information
Travelers are also enjoying increased security, both in worldwide governance and due to technological advancements. The ubiquity of the smartphone means that travelers can stay connected to family easier, not to mention have access to all kinds of information at their fingertips. Perceived safety is increased as travelers maintain access to technology, as they can more quickly understand and navigate foreign landscapes
This sort of technology reduces the uncertainty for a certain segment of traveler, perhaps someone who was not the gung-ho adventurous type that would set off on an international trek before the Internet. The information age has thus led to a larger actual market, so while the competition for these youth travel dollars has increased across all segments of the industry, the overall market has grown.
NB: Backpacker beach image courtesy Shutterstock.
Nick Vivion was a senior reporter for Tnooz from August 2012 to July 2015.