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.

Screen Shot 2013-10-10 at 10.58.18 AM

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.

The Executive Summary is available here, and the organization’s full report, which breaks these themes down at the micro level, can be purchased here.

NB: Backpacker beach image courtesy Shutterstock.

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Nick Vivion

About the Writer :: Nick Vivion

Nick is the Editorial Director for tnooz, where he oversees the editorial and commercial content as well as emerging businesses like tnoozLIVE. Prior to this role, Nick has multi-hyphenated his way through a variety of passions: restaurateur, photographer, filmmaker, corporate communicator, Lyft driver, Airbnb host, journalist, and event organizer. Outside of work, Nick enjoys exploring the emerging world of crypto -- and the actual world with his dogs Rick and Loki.



  1. Steve Sherlock

    I am not a backpacker as far as age group goes – plus I wheel backpack (aka suitcase around) – though I have been travelling around South America for five month – like a backpacker.

    The trend over hear mirrors your comments Nick, with regards to party hostels (such as Loki etc) – although perhaps an even bigger segment of backpackers stay in ´hotel like´ hostels, with private rooms and bathroom, TV and in room wifi. These private room hostels are often as cheap ($10-$15 per night) as a staying in a 6 bed dorm.

    The transport trend over here for an increasing number of backpackers is to use luxury bus lines, equipped with 160 and 180 degree flat beds (quasi business class), in seat entertainment screens and wifi – costing around $30-$60 for up to an 15 hour over night trip.

    Many of the private room hostels are aggregated well by the likes of and however the bus inventory is an opportunity still to be captured. I think its a difficult task though given the fragmentation in the market – however I am aware of startups trying their hand at aggregating bus seats.

    Another point to add – even though stats quoted that the youth market makes up 20% of arrivals – I am pretty sure they´d make up a greater % of total nights and perhaps over all spend given the length of stay. Most young backpackers I meeting in South American are traveling for 2-6 months.

  2. Baljeet Sangwan

    Actually, there’s a growing segment of 18-26 age group, pure party hounds, with a USD 100 daily cap, hitting the “party hostels” such as the Pink Palace in Greece, Grandio Party Hostel in Budapest and Stumble Inn in southern Portugal to live it up. Thus, party hostels are emerging as destinations unto themselves, with booze cruises and 24/7 bars, while penny-pinching to stretch the dollar (or euro) remains cool, as more and more of the young lot discover the “party-till-you-drop” environment in global destinations.

    (Btw, why is the text editor on this new iteration of Tnooz so doggone unfriendly, making corrections and editing within the comments an ordeal?)

  3. Kuan Sng

    Good piece and flashpacker is a fitting segment encapsulation though at $1,000/week, doesn’t quite categorize as budget I don’t think, The connected budget traveler will take to M-commerce for air tickets if it does indeed provide the best price/value offering. For many off-the-beaten-path destinations, the best prices are still sourced via the connected travel agent on non-Kayak indexed airlines.

  4. michael frenkel

    NIck, thanks for a great piece.

    We see the impact of this market also on the “bricks and sticks” side, where hostels are now a legitimate, and growing, asset class, attracting the attention of investors around the world. Their influence on all aspect of the industry can only continue to grow as well.

    Til next time – Michael


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