Next Generation Traveler Profiles

An analysis of the types of travelers that will dominate the industry and shape the major tourism trends in the coming years

TT0106MI

September 2018

1 Table of Contents

Overview 3 • Next generation travelers and the future of tourism 4 • Next Generation Travelers 5 Insight into Next Generation Travelers 6 • The Chinese Millennial 7 • Emerging Aspirationals 10 • The ‘Moral Compass’ Travelers 12 • The Hobbyist 14 • The Luxury Adventurer 16 • The ‘Family Pack’ 18 • The Bleisurist 20 • The Digital Nomad 22 How to attract NextGen travelers? 24 • How to Attract the Next Generation of Travelers? 25 Appendix 27 • References 28 • Terminology and Definitions 30 • About the Author 31 • GlobalData at a Glance 32

2 Overview

3 Next generation travelers and the future of tourism

The tourist industry must adapt to the changing expectations of the ‘NextGen’ travelers Key issues for the future of travel and tourism Travel and tourism is an integral sector of the world economy, generating millions of jobs and contributing to overall socio-economic prosperity. In 2016, the industry remained one of the fastest-growing, outperforming the average growth rate of the global economy for the sixth consecutive year[1].

Tourism’s rapid growth presents enormous opportunities for local economies and societies. However, there are several issues that are rapidly altering the Security and nature of the industry, urging players to change and adapt to the new geopolitical environment. In particular, rapid globalization, geopolitical movements, turbulence climate change, demographic changes, and accelerating digitization are among the key issues that the industry is faced with. Aside from having major implications on business, geopolitics, and the global economy, these trends are fundamentally transforming the preferences of consumers, who are becoming increasingly demanding and are fueling rapid changes in the industry.

The needs of different traveler groups are highly varied Digitization Globalization As the number of international tourists is set to rise rapidly, it is fundamental for businesses to understand the changing needs of consumers. From tech savvy millennials and sport adventurists to bleisurists and digital nomads, the profiles of travelers, and hence their needs, vary vastly. It is therefore essential for companies to gain a thorough insight into the different types of travelers, in order to best tailor their products and services to cater to each.

This report identifies eight types of travelers that will dominate the industry Demographic and shape the major tourism trends in the coming years. The eight ‘NextGen’ Climate Change traveler categories identified are the Chinese Millenial, the aspirational Changes middle class in emerging nations, the ‘Moral Compass’ traveler, the Hobbyist, the Digital Nomad, the Bleisurists, the ‘Family Pack’, and the Luxury Adventurer.

4 Next Generation Travelers

‘The Moral Compass’ The Chinese Millennial Emerging Aspirationals The Hobbyist Traveler

The Luxury Adventurer ‘The Family Pack’ The Bleisurist The Digital Nomad

Source: Shutterstock

5 Insight into Next Generation Travelers

6 The Chinese Millennial

Chinese Millennials are the driving force of the largest

outbound tourist market Xinyi Zhou, 23, Chinese China is considered the most lucrative outbound travel market globally; in Marketing Student 2017, the Chinese made 136.5 million outbound trips and this number is Xinyi is studying Marketing and expected to reach 190.8 million trips by 2022. The country’s tourist boom Communications at Peking is mainly led by younger adults, widely known as millennials, as this University. Next year she is going demographic undertakes the most trips. For example, in 2017, people to Berlin where she will spend her aged between 15 and 34 comprised 51.6% of the total Chinese year abroad. She is already holidaymakers. This is contrary to many Western markets, where older planning to visit several demographics dominate the total number of holidaymakers, mainly destinations in Europe, taking because of fewer money and time constraints. As double-digit growth of advantage of the Schenghen Visa international departures from China is set to continue, businesses must which grants her access to 26 redirect their focus on China’s 400 million millennials. countries in Europe. While

traveling, she enjoys visiting Chinese Millennials are a privileged generation heritage sites and shopping, but Young adults in China are considered to have a number of key most importantly visiting as many advantages, both in comparison to older demographics in China and to restaurants as possible to explore their counterparts across the globe. The key factors behind the positive different European cuisines. Source: Shutterstock landscape in which Chinese Millennials grew up are the rapid industrialization, which led to growing household income and better educational opportunities, as well as the one-child policy that the As a result, a whole generation grew up with underlying advantages. This government introduced in 1979[1]. includes receiving high-quality education without having to borrow, meaning they are unburdened by student loans (unlike many millennials People now aged 19–35 were all born during the period of economic in other countries). It also includes not having to buy a house, given that reforms and the opening up of the Chinese economy. This meant that many Chinese parents tend to buy properties for their children. Chinese millennials — particularly those living in bigger cities — did not have to Millennials are, therefore, free to spend substantially more than many endure economic hardships, as was the case with many of their other people their age around the world, making them the most lucrative predecessors. consumers globally.

The one-child policy has given rise to the 4-2-1 family structure, with every family consisting of two pairs of grandparents, the parents, and the child. This meant that the child in each family was instantly the center of attention and received emotional and financial support from six adults.

7 The Chinese Millennial

A tech-dependent generation China: Which factors help you decide where to go on holiday? – Social Chinese people are among the most tech savvy globally. However, Media (e.g. Instagram, Facebook) Chinese Millennials are more than that — they are technologically dependent. As digital natives, they have grown up with the internet, which has, in turn, shaped their expectations and habits. Millennials 34%

According to GlobalData’s consumer survey Q4-2017, 86.8% of Chinese Millennials say that technology has made their life simpler. Technology is Total 27% embedded in the everyday life of this demographic, which has grown accustomed to the convenience it provides and which now demands this Source: GlobalData, Consumer Survey Q3-2018 level of convenience when traveling abroad, too. High internet and Millennials, China: How often do you share the following on social smartphone penetration, coupled with frequent use of social media and media? – Several times per week other apps domestically – including smart and convenient payment options – means that Chinese visitors value countries and businesses that allow them to stay connected and carry out key tasks via their phones. A picture of food/drinks you 36.3% From managing their trip and activities through one smartphone app and consume paying using their mobile wallet – such as Alipay or WeChat Pay – to using apps that allow them to explore a city by providing them with real-time A picture of yourself 33.1% information and tips, companies willing to tap into this segment must ensure that they intensify their efforts to meet the ever-growing digital needs of this generation. Source: GlobalData, Consumer Survey Q4-2017 Millennials, China: ‘Technology has made my life simpler’ Chinese Millennials spend a substantial part of their day 2.9% 10.1% on social media Agree Social media in particular plays an important role in the everyday lives of millennials, from socializing and shopping to staying informed about their interests and sharing content. When it comes to travel, social media is an Disagree increasingly influential channel shaping the travel choices of millennials. This was highlighted by GlobalData’s consumer survey Q3-2018, in which Neither agree/nor 34% of millennials said they choose their holiday destination with the disagree 86.8% help of social media. Photos, articles, and, most importantly, short videos are increasingly becoming the most effective way to reach this cohort. Source: GlobalData, Consumer Survey Q4-2017

8 The Chinese Millennial

Shopping remains important, though interest in experiences is growing Millennials, China: Which of the following do you find most exciting?

Chinese consumers love shopping, an activity that has traditionally been a

priority for tourists traveling overseas. This is mainly motivated by price,

quality, and variety differentials between China and other countries,

particularly in the West. However, the cliché of Chinese people traveling 53.5% 46.5% and shopping is rapidly changing and we are currently witnessing Chinese

Millennials driving the quest for more experiential activities.

Well-educated and open-minded millennials seek to Trying new products Trying new experiences explore different parts of the world According to GlobalData’s consumer survey Q3-2018, 53.5% of Chinese Source: GlobalData, Consumer Survey Q3-2016 Millennials find trying new products most exciting, while 46.5% prefer trying new experiences. While material goods are still more appealing for the majority of the Chinese Millennial population, there has been a shift in consumer perceptions in recent years from ‘things’ to ‘experiences’.

Young people in China are well-educated and more open-minded and affluent than their parents, with many living abroad as part of their studies. As a result, this demographic is more likely to visit a destination and be willing to experience its culture and explore its traditions, cuisine, and local way of life. China’s decision to open up to the world from the 1990s onwards was another important factor in ensuring that Chinese Millennials were much more exposed to different cultures and ways of life when compared to their predecessors.

The growing curiosity of this demographic is highlighted in GlobalData’s consumer survey Q4-2016, according to which, Europe is the most desired holiday destination, with 38.3% of Chinese Millennials arguing that their next holiday destination is likely to be in Europe. This is mainly because of the high status and variety that Europe has to offer as a destination. Source: Shutterstock 9 Emerging Aspirationals

Rising disposable incomes and a growing middle class

boost demand for travel in emerging economies Aryan Sen, 35, Indian

Within the last 10 years, GDP per capita in many emerging markets such Data Director

as Brazil, Russia, India, China, and South Africa have experienced rapid Aryan lives with his wife and two

growth. GlobalData expects GDP per capita in these economies to children in Mumbai, where he

continue rising, with a growing number of consumers entering the middle works as a Data Director for a

class. For instance, in China, GDP per capita has more than tripled — from tech company. He leads a very

US$2,697 in 2007 to US$8,814 in 2017 — while more than a third of the busy life given his responsibilities

Chinese population is forecast to belong in the middle class by 2030. As both as a director and as a father.

disposable incomes rise, spending on travel and capital goods will During the summer months, he

increase substantially across these markets. likes to take a long break where

he can relax and spend quality

time with his wife and children. Travel is the new status symbol This year, Aryan and his family are Consumers in emerging markets are confident about their country's planning to spend two weeks at a economic prospects and are willing to trade up on a broad variety of luxury resort in Thailand, with a goods, as well as increase their discretionary spending, including on [2] variety of activities on offer for traveling . both adults and children. Source: Shutterstock

More specifically, a key trend across consumers in these economies is the ballooning appetite for travel. Besides enjoying the perks of traveling, such as relaxing, exploring a new culture, and meeting new people, Emerging Affluent: Are you saving to fund a holiday? middle class and upper middle class citizens widely view travel as a status symbol. This means that, while abroad, they tend to share content on Indonesia 69% social media to celebrate and ‘show off’ their personal prosperity. Turkey 65% Traveling abroad is part of an aspirational lifestyle According to GlobalData’s WealthInsight, when asked about their reasons Singapore 64% for saving, emerging affluent nationals of Indonesia, Turkey, Singapore, Mexico, and India were the ones saving the most for holidays[3]. The fact Mexico 62% that these consumers still have to save specifically for a holiday means they cannot travel at the drop of a hat and still view international travel India 54% as part of an aspirational lifestyle. Source: WealthInsight 10 Emerging Aspirationals

Emerging Aspirationals fuel the demand for luxury travel When holidaymaking, these travelers are willing to indulge themselves with more luxurious experiences, whether this is fine dining, wellness Where is your next holiday likely to be? activities, or shopping for designer brands. Although they may not undertake luxury trips on a continuous basis, they are willing to spend more and enjoy exclusive experiences during special occasions, such as a honeymoon, an anniversary, or a family trip. They may choose to trade up across all elements of their trip, or be more selective and spend more in specific categories.

Given the large size of the demographic showing an interest in luxury experiences, businesses must leverage marketing communication and advertising to attract not only those who have traditionally been undertaking luxury holidays, but also the growing number of people who have recently joined the middle class and are willing to indulge themselves in selective opulent activities.

Europe is the most desirable destination for Emerging Aspirationals Europe is the top destination for most consumers from emerging nations. According to GlobalData’s consumer survey Q4-2016, 33.6% of consumers from six emerging nations —Brazil, China, India, Indonesia, Russia, and South Africa — said that Europe was likely to be their next holiday destination. Asia-Pacific came in second, while North America Europe Asia-Pacific North America ranked third.

Europe is a highly desirable destination for emerging nation consumers, which associate the region with historical heritage, culture, luxury, and 33.6% 12.9% 10.3% modernity — all signs of status. A trip to the continent is perceived as increasing the prestige of travelers, with many, particularly the Chinese, trying to visit as many European countries as possible, even though time may be limited. Source: GlobalData Consumer Survey Q4-2016

11 ‘The moral compass’ travelers

The rise of conscious consumption

Growing awareness of environmental, economic, and social issues has Lucas Oliveira, 34, Brazil given rise to the trend of conscious consumption, which sees people strive Art curator to make more informed choices. From food and beauty products to Lucas lives with his partner in Sao clothes and traveling, consumers are willing to support businesses that Paolo, where he works in a offer more ethical and sustainable products and services. modern art museum. Lucas enjoys

traveling abroad with his friends Conscious consumption and sustainable travelers to explore new cultures and is The trend of conscious consumption has given rise to a new type of fascinated by nature adventures. tourist, which is characterized by environmental and cultural sensitivity[4]. Being highly eco-conscious, he Such tourists are more likely to see eco-tourism holidays as a serious plans his holidays in advance in option when choosing their next destination and are more likely to order to ensure that his time is support businesses and brands that are committed to social values and made up of unique and authentic respect the environment[11]. experiences, and that his trip benefits locals. He loves staying at As well as aiming to minimize their ecological footprint, these tourists also small, independent farm houses highly respect and value local cultures, and are therefore more likely to or being hosted by local people. support local businesses, rather than bigger and more popular chains. Source: Shutterstock They are also more likely to want to spend time and undertake authentic activities with locals. How likely are you to book any of the following holidays in the Millennials are the most interested in eco traveling coming year? By generation, global 26% 24% Though sustainability is an important factor for many age groups, eco- 22% friendly travelers tend to be young adults. According to GlobalData’s 20% consumer survey 2017-Q4, millennials and Generation X are more likely to 16% 15% book an eco holiday in the coming year than baby boomers and the silent 9% generation. The millennial generation is willing to pay more for sustainable 5% offerings, even though they tend to earn less than Generation X and baby boomers. These results align with general trends that show millennials to be the most eco-conscious consumers, driving the growth in sustainable Millennials Generation X Boomers Silent practices across an array of industries. Eco Cultural generation

Source: GlobalData Consumer Survey Q4-2017

12 ‘The moral compass’ travelers

Eco travelers are more interested in alternative Sustainable travelers lead a more responsible lifestyle accommodation types This type of traveler makes sustainable choices not only when traveling, Sustainable travelers tend to choose their holiday accommodation with but also in their everyday lives. Many have adopted a more sustainable particular care. They are more likely to prefer smaller, independent lifestyle, which is characterized by making more informed choices when it hotels to bigger chains, as well as more unique accommodation. For comes to their diets. For instance, many are vegetarian or vegan, while example, many enjoy camping, glamping, organic farm houses, and even others opt for organic or local products. GlobalData’s consumer survey tree houses. Given that traditional accommodation providers such as Q4-2017 showed that consumers who are likely to book an eco holiday in hotels and hostels do not typically offer such unique stays, sustainable the coming year are also 10% more likely than average to be vegan for travelers are highly interested in booking alternative accommodation environmental issues. Similarly, another survey showed that consumers types through peer-to-peer platforms as these offer a much bigger who buy organic food and drinks or organic beauty and grooming selection of accommodation types. GlobalData’s consumer survey Q4- products tend to be more interested in eco-tourism. Globally, 48% of 2016 showed that consumers who are likely to book an eco holiday are respondents who buy organic food and drinks are also likely to book an 13% more likely than average to consider booking peer-to-peer eco-tourism holiday. Contrarily, only 17% of those who do not buy accommodation. organic food and drinks are likely to do so.

Countries most interested in eco-tourism Besides Airbnb and HomeAway — the key players in peer-to-peer accommodation — a growing number of home-sharing platforms with a sustainability focus are also entering the market. For instance, Ecobnb is a Indonesia 39.0% home-sharing platform that allows visitors to book and stay in one of Colombia 31.3% thousands of environmentally friendly properties, ranging from [5] China 28.8% treehouses to city apartments with low or zero CO2 emissions . Brazil 25.1% Travelers from emerging countries show the greatest Peru 24.5% interest in eco holidays Source: GlobalData Consumer Survey Q4-2017 According to GlobalData’s consumer survey Q4-2016, the countries that are most interested in eco-tourism are Indonesia, Colombia, China, Brazil, Home-sharing platforms provide an array of unique accommodation and Peru. This finding may be explained by the fact that countries such as that is highly appealing to eco travelers China are among the most polluted in the world, with citizens suffering greatly from environmental issues. This suggests that travellers from these countries may be more willing to travel for eco purposes, as they Consumers who are likely to book an eco holiday, are 13% more attempt to reconnect with nature and enjoy a cleaner environment. likely to consider booking peer-to-peer accommodation such as Airbnb

13 The Hobbyist

Sporting holidays are increasing in popularity A growing number of people globally are traveling abroad to undertake Maria Patrinelli, 32, Italy their favorite sport or hobby. Some of the most popular forms of sporting Restaurant Manager holidays among hobbyists include golfing, skiing, hiking, biking, mountain Maria lives in Florence where she climbing, and water sports such as scuba diving and surfing. works as a restaurant manager. She has a passion for cycling and Sporting holidays most commonly require particular physical or natural tends to travel abroad to features (such as mountains or waves), which mean these activities are participate in cycling competitions offered in specific locations[6]. Tourist accommodation and services in the or train with other people who area cater almost entirely to the needs of these specific hobbyists. Prime share the same love. examples include ski or golf resorts. She usually undertakes short weekend getaways, but when she Hobbyists are mostly millennials has the chance she opts for longer GlobalData’s consumer survey Q4-2017 showed that 24% globally are breaks during which she cycles likely to book an adventure/sports holiday in the coming year. According long distances in the countryside to the same survey, millennials — with 34% — are the age group most of European countries such as likely to go on an adventure or sport holiday. This compares to 23% of France, Germany, and Generation X, 12% of Baby Boomers, and 6% of the silent generation. Source: Shutterstock Switzerland. Males are also more likely to undertake an adventure and sport holiday, with 28% agreeing, compared to 20% of female respondents. How likely are you to book an adventure/sports holiday in the The high interest of younger age groups in sports tourism is very positive coming year? By generation, global for the future of the industry, though the high cost of undertaking 34% adventure and sports holidays could price out younger consumers who typically earn less than other demographics. This is particularly true for 23% more specific sports. 12% Therefore, industry players must intensify their efforts to target 6% millennials by developing a strong online presence, including on social media, which is a highly influential channel for this generation. Millennials Generation X Baby Boomers Silent generation Source: GlobalData Consumer Survey Q4-2017

14 The Hobbyist

Health-conscious consumers are driving the boom in sports Do you use digital tools to monitor/manage exercise/fitness? tourism In recent years, consumers have become more aware not only about the Consumers who are likely to book an environment, but also about health issues, with a growing number adventure/sports holiday in the coming year are 18% monitoring their diet and exercising. According to GlobalData’s consumer survey Q4-2017, 35% globally are exercising several times per week. As a more likely than average to be using digital tools result, exercise has grown in popularity around the world more and more such as smartphones and wearable devices to track people want to incorporate their favorite sports and activities into a their exercise/fitness holiday. Moreover, GlobalData’s consumer survey Q1-2017 showed that 51% globally are concerned about stress, resulting in more and more people turning to sports and physical activities as a means to destress. The Hobbyists are more likely to have a more active lifestyle Therefore, the desire to go on a holiday that allows people to participate in their hobbies and destress is becoming increasingly popular and activity holidays are a good way to achieve this. Consumers who exercise daily are 12% more likely than average to book an adventure/sports holiday in Sports are a way of life for the Hobbyists the coming year People who exercise for fun and enjoyment and also for socializing are substantially more likely to book an adventure/sports holiday. These findings point out the integral role of exercising for the lives of the What are your motivations for exercising? Hobbyists and underline the fact that sports is not just viewed as a means to keep healthy but is instead a way of life. Consumers who exercise to socialize are 16% more The Hobbyists tend to follow a healthier diet likely than average to book an adventure/sports Besides exercising, a healthy and balanced diet plays a central role for the holiday in the coming year Hobbyists, given that healthy eating is key in supporting an active lifestyle. GlobalData’s consumer survey Q4-2017 showed that consumers who are likely to book an adventure/sports holiday in the coming year are 14% more likely than average to snack on fruits and 7% more likely than average to Consumers who exercise for fun and enjoyment are snack on nuts and seeds. As well as carefully choosing their snacks, 11% more likely than average to book an Hobbyists also tend to make responsible choices with their meals. adventure/sports holiday in the coming year Therefore, tourism firms willing to tap into this cohort must tailor their offerings in order to combine sporting activities with the delivery of exciting but healthy dishes to create a unique value proposition for consumers. Source: GlobalData, Consumer Survey Q4-2017

15 The Luxury Adventurer

Unconstrained by time and money Luxury Adventurer are seeking to explore the world Amanda Jones, 62, US Another key group of next generation travelers are the Luxury Retiree Adventurers. In contrast to the Hobbyists, who travel abroad Amanda retired two years ago predominantly for undertaking sports or adventure activities, Luxury from her position as director of a Adventurers are willing to experiment with more unique and niche multinational energy company. physical or cultural activities, without these being the key reason for She has three children who are visiting a destination. working abroad, while her husband is still working. Amanda Luxury Adventurers tend consist of Baby Boomers, predominantly from used to travel with her husband Western countries. When this cohort was younger, traveling was but since she retired she has expensive and therefore not as accessible as it is now for millennials. started undertaking longer breaks Being in a stage of their lives where they are not limited by time and by herself. Given that she is no money, this generation of travelers is willing to travel and experiment longer constrained by work and with new activities while exploring the world. Travelers from this child responsibilities, she is generation had fewer globetrotting opportunities when they were seeking to explore new places while relaxing and enjoying younger, so they seek travel adventures – though adventure for them is Source: Shutterstock mostly perceived as exploring different cultures and trying unique unique culinary experiences. activities in new settings, in significant contrast to the Hobbyists. Such activities can range from hiking in the wild mountains of Asia and snorkelling in the Caribbean to safaris in Africa and culinary tours in How likely are you to book a wellness/medical holiday in the Europe. coming year? By income, global

Luxury Adventurers have very high expectations and High earners 20% require luxury across all elements of their trip Luxury Adventurers are willing to try new and more adventurous Middle earners 17% experiences, but at the same time demand a high standard across all elements that make up their trip. Therefore, whereas the Luxury Adventurer and the Moral Compass Traveler may opt for the same hiking Low earners 14% tour, the former — unlike the latter — will also demand luxury transportation, accommodation, and fine dining experiences. Source: GlobalData Consumer Survey Q4-2017

16 The Luxury Adventurer

Luxury Adventurers are unsurprisingly dominated by high Countries with the highest number of female HNWIs earners, given the underlining cost of this holiday type (high-net-worth individuals) Holidays which combine adventure with luxury elements are comparatively expensive, so high earners are much more likely to book Philippines 20% this type of vacation than other demographics. However, middle earners are also likely to undertake such trips on special occasions such as Hong Kong 18% honeymoons, wedding anniversaries, or birthdays. According to GlobalData’s consumer survey Q4-2017, high earners are 6% more likely Turkey 17% to book a wellness/medical holiday in the coming year than the average, primarily because of the high cost of this holiday type. Singapore 17%

UK 15% Females account for a high share of Luxury Adventurers In recent years, the number of wealthy and financially independent Mexico 14% women has risen dramatically, giving rise to the trend of solo female travelers or even groups of female friends traveling together. This cohort Norway 14% is particularly interested in traveling to explore the world and often view a trip abroad as a way to treat themselves. The combination of culture Indonesia 13% with health and wellness elements — such as historic and culinary tours — together with spa, meditation, and physical activities in natural France 12% environments is becoming particularly lucrative within this cohort. Malaysia 12%

Asia dominates in terms of number of female HNWIs Source: WealthInsight HNWIs and UHNWIs (high-net-worth individuals and ultra-high-net-worth individuals) are segments of particular importance among Luxury High-earning women are fueling the demand for luxury adventures Adventurers. The countries with the highest share of female HNWIs are the Philippines, Hong Kong, Turkey, Singapore, and the UK. As the data suggests, the top 10 countries in terms of share of female HNWIs is High-earning female baby boomers, are 6% more dominated by nations in Asia. This is due to the rapid rise in the number likely to book a wellness/medical holiday in the of female entrepreneurs in the region during the past decade. The strong forecast growth in the number of wealthy females globally presents coming year renewed opportunities for the industry, which must specifically cater for their needs. Source: GlobalData Consumer Survey Q4-2017

17 The ‘Family Pack’

Family travel dominates global flows Lungelo Naidoo, 45, South Africa According to GlobalData, family travel is the most popular type of travel, Film Director comprising 30.8% of global flows in 2017 and outnumbering couple, Lungelo is a single parent with group, and solo travel. Though family travel dominates flows around the two children. His daughter is 10 world, it is particularly prominent in Arabic countries, accounting for as years old and his son eight years much as 73% of international departures in the case of Saudi Arabia. old. Lungelo is a film director and

his work schedule is busy and Sun and beach holidays remain the most popular among highly unpredictable. However, he young families loves organizing a long holiday According to GlobalData’s consumer survey Q4-2017, the most popular every year in Europe or Asia- type of holiday among parents with a child aged 0–13 years globally are Pacific. He prefers booking all- sun and beach holidays, followed by adventure/sports and visiting friends inclusive packages in child-friendly and relatives (VFR). Sun and beach breaks have traditionally been the hotels that feature an array of most popular type of holiday among parents with young children and are activities for both parents and considered an ‘institution’ for people across many countries. children. This allows him to relax, while his son and daughter try Hectic lifestyles in big cities boost the demand for family various sports and art activities adventures in the nature Source: Shutterstock with other children. Adventure and sports holidays are also popular among this cohort, with 40% of parents globally arguing that they are likely to book this sort of Global, parents with a child aged 0–13 years: What type of holiday break in the coming year. The demand for adventure breaks in natural are you likely to book in the coming year? surroundings is growing, as families with hectic lifestyles in urban areas seek to destress and want their children to appreciate and learn about Sun and beach 57% nature. Most importantly, though, adventure holidays keep children busy and tire them out, allowing parents to relax. Adventure/sports 40% VFR 34% The growing number of expats globally fuels VFR travel City break 32% VFR travel is being fueled by intensifying globalization and the fact that a Cultural 30% growing number of people around the world are living and working far from home, whether it is in urban areas within their own country or Wellness/medical 30% abroad. This has seen it become the third most popular choice among parents with young children. Source: GlobalData Consumer Survey Q4-2017

18 The ‘Family Pack’

The ‘Family Pack’ is diversifying Family travel dominates global outbound flows As global travel flows grow rapidly — due to rising incomes and the LCC

revolution which renders traveling more accessible — family travel is 400 diversifying from the traditional long summer break for parents and their 300 young children to multi-generational trips, mother-daughter trips, and millennials joining older family members to spend quality time together Millions 200 and make up for lost family time because of tight work schedules or distance apart. 100 0

Multi-generational trips are on the rise

2010 2017 2011 2012 2013 2014 2015 2016 2018 2019 2020 2021 2022 Multi-generational travel — which sees family members of all ages, 2009 including parents, children, and grandparents, travel together — is Source: GlobalData growing in popularity. This type of trip allows family members to reconnect and create new memories together. The ability to share costs Parents of young children are more likely to show higher interest for and childcare responsibilities is another key factor that attracts families to active holidays in the nature, but also for rejuvenation trips such vacations. Parents with young children aged between 0 and 13 While trips in which members from three generations travel together are years are 14% more likely than average to book an becoming increasingly common, niche variants within family travel include mother-daughter, father-daughter, and even grandmother-granddaughter adventure/sports holiday and 12% more likely to getaways. Given the high diversification taking place within family travel, book a wellness/medical holiday in the coming year resorts, cruises, and tour operators aiming to target this segment must ensure that they provide a variety of activities that match the preferences Source: GlobalData Consumer Survey Q4-2017 of the whole family. Global, parents: Which factors help you decide where to go on

holiday? Affordability remains the key factor when choosing a destination Affordability 59% According to GlobalData’s consumer survey Q3-2018, 59% of parents globally said that affordability is a key factor when choosing a holiday Reccomended by friends/ family 51% destination. Global household incomes and discretionary spending on traveling is rising, but cost remains a key consideration of parents planning Accessibility 48% a holiday, especially as they have to pay for the whole family. Source: GlobalData Consumer Survey Q3-2018

19 The Bleisurist

Bleisure travel is fueled by millennials who combine business trips with short leisure breaks Nicole King, 29, Australia Bleisure — the combination of a business and a leisure trip — is booming NGO Officer around the world. GlobalData’s Changing Trends in Business Travel Nicole is working for an Booking in 2017–2018 showed that 43% of those going on a business trip environmental NGO in Australia. try to spend a few days at their destination, with the figure reaching 56% Traveling, particularly in Asia- for business travelers aged 25–34. Pacific, is an integral part of her work. Given her love for nature The rise in the number of people traveling for work, as well as the fact and traveling, she is always trying that business travel is becoming a lifestyle — especially for Millennials — to extend her business trips by has prompted many to seek more from their business trips[7]. Bleisure staying at a destination for two to allows employees to make the most of their business opportunities, by four more days. She frequently enjoying time in a new destination after their work responsibilities are flies to New Zealand, the over. Bleisurists usually extend their trips for no more than three days, Philippines, Malaysia, and most often adding a Saturday night stay to their trip with the aim to relax Indonesia, so she has many or briefly explore a new city without paying travel costs[7]. Generation X friends who are willing to join her and Baby Boomers tend to bring family members with them on the trip, on her trips. while millennials bring their partner or friends. This travel type is Source: Shutterstock particularly popular among employees undertaking trans-Atlantic or trans-Pacific trips of more than a day to attend a conference or a meeting Global: When flying long-haul, I try to … of less than two days, especially because of the lengthy journey and high base cost of making the same journey out of their own pocket.

Companies offer flexible work travel perks The rise of bleisure is mainly attributed to the substantial drop in air fares over the past five years, the greater connectivity of society, and the fact that often, staying one more day — instead of flying on peak days such as Friday evening or Monday morning — could prove cost-effective for a company[17]. Companies are introducing travel extension options to employee benefit packages, making some jobs particularly attractive to younger workers who value travel experiences. These options also increase the employee’s sense of value and loyalty to the business, Source: GlobalData, Changing Trends in Business Travel Booking in making these benefits a win-win [8]. 2017–2018

20 The Bleisurist

International business travel, and hence bleisure, is Global: International Arrivals, for Business (000s) expected to grow steadily According to GlobalData, international departures for business purposes 250,000 are expected to reach 237.5 million by 2021, with key source markets 200,000 being China, the US, Germany, India, and the UK. The strong forecast for global business travel is positive news for the industry, but at the same 150,000 time, the demographic variety among business travelers leads to inevitable 100,000 variations in such travelers’ needs and expectations. 50,000 Bleisurists have varied needs and preferences 0 Bleisurists across generations have different requirements when traveling. For instance, Gen X Bleisurists are more likely to be travel with their family. Therefore, it is very important for businesses to offer engaging activities Source: GlobalData tailored to the needs of family members in order to keep them entertained during the time that a corporate guest attends business events. These activities may range from sightseeing and city tours to learning activities, while babysitting services that allow parents to have some free time for themselves are also particularly lucrative.

Contrarily, millennials traveling with partners or friends seek experiential business travel as they want to combine their work responsibilities with touristic activities at a low cost. Therefore, accommodation providers that offer preferential rates for tours, activities, and dining experiences are particularly attractive to this demographic.

Flexibility is key when it comes to bleisure trips Bleisurists are often faced with limited time at a destination, but at the same time they want to make the most of their stay. This means that these travelers often seek solutions that save time and allow them to become more independent. Options such as self check-in both at airports and hotels, skipping queues in airports, and last-minute cancellation rights give business travelers much valued flexibility and can drive brand loyalty. Source: Shutterstock

21 The Digital Nomad

Location-independent workers are expected to become increasingly important for tourism Felipe Sanchez, 27, Argentina

The rise of web-based working is bringing about a global revolution, as it Graphic Designer

allows people to work remotely and more flexibly, without compromising Felipe is Argentinian. After

on the quality of their work. For many, remote working simply means completing his studies, he worked

working from home. However, for a growing number of people, it means for three years as a graphic

working while traveling and exploring new parts of the world. designer for a consulting firm.

However, feeling exhausted by

This new trend is expected to bring great benefits for the tourism industry, the hectic lifestyle in Buenos

creating new market opportunities for businesses, while it is also seen as a Aires, he decided to start working

solution to key issues faced by employees in overly busy and overcrowded freelance. At the moment he is

urban areas. based in Thailand, were he enjoys

the exotic landscape and unique

What drives digital nomadism? nightlife, but most importantly the low cost of living. He is Key factors behind the growth in Digital Nomads are the rise of web-based planning to visit Cambodia, working, the affordability of international travel, the popularity of Vietnam, and Laos within the next freelance jobs, and the sharing economy. These four factors are two months. transforming the global economy and are offering modern-day employees Source: Shutterstock unparalleled flexibility. Businesses are introducing digital nomad-friendly The majority of Digital Nomads are millennials, a generation highly accustomed to technology and one that fully capitalizes on the offerings opportunities it generates. Millennials, who are increasingly turning away Recognizing the great potential of this demographic, businesses are from ‘things’ towards ‘experiences’, find remote working particularly already introducing offerings that meet the exact needs of Digital Nomads. appealing, as it allows them to work and make money but at the same From co-working spaces such as WeWork and co-living services such as time explore new cultures and meet new people. Roam to flexible peer-to-peer accommodation such as AirBnb, there are numerous new opportunities for hospitality businesses wanting to target What do Digital Nomads want? this next generation of travelers. This group of travelers usually seeks single rooms in city centers with an excellent internet connection that allows them to work without disruption. However, experiences, activities, and a sense of shared community are also key as living life to the fullest is as important to them as working. 22 The Digital Nomad

Social media influencers and travel bloggers are a special Best cities to live and work remotely group of travelers among the Digital Nomad category

In recent years, social media influencers, bloggers, and vloggers have

become an increasingly influential cohort within the Digital Nomad

category, shaping trends across industries. This could not be more true Budapest

than in the travel and tourism industry. Many people around the world Berlin have quit their jobs to embark upon a never-ending travel adventure.

These people share their experiences and offer travel tips, and are often Bangkok sponsored by businesses — both touristic and non-touristic — to advertise

their products and services. Lisbon

Digital Nomads embrace the gig economy and digital Prague platforms when it comes to planning a holiday Ubud Given that the majority of Digital Nomads are millennials, this generation of travelers is much more likely to book and plan their trips online, and Barcelona prefers sharing economy businesses such as AirBnb, Home Away, and Uber as these platforms make their lives more affordable and convenient. Digital Ho Chi Minh Nomads also show high demand for unique and experiential activities. Something that would be very well received by this demographic is any Chiang Mai form of app that helps users to manage their itinerary and track their spending — with or without connection. This is because Digital Nomads are Canggu

constantly on the move, often in different countries, and as a result they Source: Nomad List value convenient apps that save them time and frustration, by allowing them to remain organised even without internet access. and the nightlife. The geographical proximity to other countries and availability of cheap flights are also huge bonuses for Digital Nomads, who Asia is a particularly lucrative destination seek to explore as many new places as possible. Asian and European cities dominate Nomad List’s ranking of the best cities to live and work remotely, which is based on factors such as cost, internet quality, and activities and experiences. Key reasons behind these locations’ popularity among this cohoart are the relatively low cost of living, the reliable internet infrastructure, and the quality of experiences, activities,

23 How to attract NextGen travelers?

24 How to Attract the Next Generation of Travelers?

The Chinese Millennial The ‘moral compass’ traveler

. Tourism oprganizations must invest in marketing campaigns to . Businesses must offer deals that combine transformative travel raise awareness of their region by capitalizing on the unparalleled with social and environmental activities, while ensuring minimal influence that the internet and social media — Chinese social ecological impact on the destination. media in particular — have on the everyday lives of millennials. . Invest in growing source markets that are interested in eco-tourism, . Investment in digital solutions will be key in ensuring the particularly emerging countries, as well as focusing on millennials. satisfaction of tech-savvy Chinese Millenials. This includes providing high-quality WiFi to allow them to stay connected and . Invest in ‘quirky’ accommodation such as farmhouses, glamping communicate with friends and relatives when far away from sites, and zero-emission properties, and offer dining options with a home, and developing digital platforms and apps that allow focus on organically grown or ethically sourced products. Chinese visitors to find information about a destination, check in, amend their booking, and receive live information about their . Smaller-scale hospitality businesses should promote the flights. authenticity of their region by emphasizing their cultural, gastronomical, and historical traditions.

The Hobbyist Emerging Aspirationals . Destinations must create content tailored to different types of . Businesses must intensify and tailor their marketing campaigns to tourists, from sport enthusiasts to art lovers, as well as develop a attract the rapidly growing Emerging Aspirational category of strong online presence with travel tips and resources for the travelers. To do so, they must introduce attractive deals, keeping different types of activities on offer. To do so, they must focus on in mind that cost is a fundamental factor for this cohort, especially their region’s natural assets or invest to expand into areas in which as they tend to travel with their family. However, instead of purely they have a competitive advantage. focusing on typical tourist experiences such as sightseeing, companies should also include more bespoke experiences such as . Given the high influence of video content as a means of marketing, gourmet dining. tourism companies should create storytelling videos if they are to attract Hobbyists.

25 How to Attract the Next Generation of Travelers?

The Luxury Adventurer The Bleisurist . Upscale tourism is changing, with travelers’ preferences shifting from material opulence to exclusive experiences, meaning tourism . Accommodation providers must introduce options that allow firms must introduce offerings that combine unique, even once in visitors to extend their business trips, while offering activities and a lifetime, experiences with excellent accommodation and dining. preferential rates for family and friends.

. Capitalize on the growing high-earning female population by . Businesses must partner with TMCs, but also with transportation developing offerings that combine activities such as spa retreats, companies, aiming to develop lucrative loyalty programs. yoga, meditation, and cultural and culinary attractions to allow them to unwind. . Additional perks such as discounts on tours, attractions, and dining are another way to ensure that business travelers extend their . The tourism sector must intensify its efforts to effectively target stays. young luxury travelers by adopting technological advances, and most importantly invest in mobile applications and video content.

. Target special occasion luxury travelers who are willing to spend more and enjoy exclusive experiences during a honeymoon, an anniversary, a family trip, or a celebration.

The ‘Family Pack’ The Digital Nomad . Tour operators targeting this segment must ensure that they provide a variety of activities that match the preferences of the . Introduce flexible and affordable accommodation offerings with whole family. excellent internet connectivity that allow Digital Nomads to work effectively without disruption.

. Given that cost is a key consideration of families traveling . Businesses must also take advantage of Digital Nomads' unique together, businesses must ensure that they provide customers needs by setting up convenient offerings such as freelance with a high level of service and activities at reasonable prices. networks in specific cities or regions. Offering access to major

events and activities in these destinations is another way of . A significant share of millennials are starting to become parents, so attracting this demographic. businesses must introduce experiential holiday packs that allow parents to spend quality time together with their children.

26 Appendix

27 References

Primary sources GlobalData Q3 2016 Global Consumer Survey GlobalData Q4 2016 Global Consumer Survey GlobalData Q1 2017 Global Consumer Survey GlobalData Q4 2017 Global Consumer Survey GlobalData, Changing Trends in Business Travel Booking in 2017–2018 GlobalData Q3 2018 Global Consumer Survey

Secondary sources [1] Forbes (2017) ‘The Real Reason Chinese Millennials Are Super Consumers’ https://www.forbes.com/sites/helenwang/2017/03/27/the-real- reason-chinese-millennials-are-super-consumers/#4b34d7ee4053 March 2017 [2] The World Bank (2018) ‘Global Economy to Expand by 3.1 percent in 2018, Slower Growth Seen Ahead’ http://www.worldbank.org/en/news/press-release/2018/06/05/global-economy-to-expand-by-3-1-percent-in-2018-slower-growth-seen-ahead June 2018 [3] WealthInsight (2016) ‘Opportunities in luxury tourism: Trends in UHNWI demographics and leisure interests’ https://www.prnewswire.com/news-releases/opportunities-in-luxury-tourism-trends-in-uhnwi-demographics-and-leisure-interests- 300250521.html March 2016 [4] Center for Responsible Travel (2016) “The case for responsible travel: Trends and Statistics 2016” [5] Ecobnb (Accessed on the 26th of September 2017) “Ecobnb is the community of sustainable tourism” https://ecobnb.com/blog/sustainable- ecotourism-italy/ [6] GlobalData (2018) ‘Exploring Sports Tourism - Insight into sporting holidays, sport events, and what the future holds for the industry’ https://www.globaldata.com/store/report/tt0108mi--exploring-sports-tourism-insight-into-sporting-holidays-sport-events-and-what-the-future- holds-for-the-industry/ January 2018 [7] Jetlux (2017) “Bleisure Travel 2017: How Business Travelers Are Using The Latest Travel Trend” https://jetluxhotels.com/bleisure-travel-2017- how-business-travelers-are-using-the-latest-travel-trend/ March 2017 [8] The Telegraph (2016) “The rise of bleisure trips” https://www.telegraph.co.uk/connect/small-business/business-travel/rise-of-bleisure-trips/ December 2016

28 Terminology and Definitions

TERMINOLOGY DEFINITION

Baby Boomer Baby boomer is a term referring to a person who was born between 1946 and 1965. Emerging Affluent Emerging affluent are consumers with US$25,000 to US$50,000 in on-shore liquid assets. FSCs FSCs refers to full service carriers. HNWIs HNWIs are individuals with more than US$1 million in on-shore liquid assets. LCCs LCCs refers to low-cost carriers. Mass Affluent Mass affluent are consumers with US$50,000 to US$1 million in on-shore liquid assets. Millennial Millennial is a term referring to a person who was born between 1981 and 1991. UHNWIs Ultra-high-net-worth individuals (UHNWI) are people with investable assets of at least US$30 million, excluding personal assets and property such as a primary residence, collectibles, and consumer durables. VFR VFR travel is a form of travel involving a visit whereby either (or both) the purpose of the trip or the type of accommodation involves visiting friends and relatives.

29 About the Author

Konstantina Boutsioukou

Associate Analyst

Konstantina.boutsioukou@globaldata. com

Konstantina Boutsioukou is an Associate Analyst for Travel and Tourism. Konstantina joined GlobalData after completing a double MA in Economics and International Relations from the University College London and the Higher School of Economics in Moscow.

Konstantina previously worked in the Cities division of GlobalData before moving into the Travel and Tourism team. In the Cities team, she analyzed macroeconomic and demographic data for metropolitan areas and produced insight and analysis on urban development trends and their impact on societies and the global economy.

30 GlobalData at a Glance

4,000 of the world’s largest companies make more timely and better business decisions thanks to our unique data, expert analysis, and Innovative Solutions, all in One Platform

We empower clients to decode GlobalData provides a range of ways Our Value uncertainties Our that clients can access our data & Proposition they face by providing: Solutions insights to meet their individual • Unique data business needs: • Expert analysis • Intelligence Center • Innovative solutions • Consulting Services • One platform • Reports

Our services cover six primary • Market Insights Our Industry industries: Our ‒ Competitive Intelligence Coverage • Consumer Expertise ‒ Consumer Insights • Retail • Innovation & New Product • Technology Development • Healthcare • Strategy & Planning • Financial Services • Technology Management • Professional Services • Marketing Communications • Channel and Sales Management Our clients:

31 Ask the Analyst If you have any questions regarding our research or would like more information on our service offering, please contact us.

[email protected]

+44 (0) 207 936 6400

32 Disclaimer

All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, GlobalData.

The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that GlobalData delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such, GlobalData can accept no liability whatsoever for actions taken based on any information that may subsequently prove to be incorrect.

GlobalData Plc | Registered Office: John Carpenter House, John Carpenter Street, London, EC4Y 0AN, UK Registered in England No. 03925319

33