Why Tour Operators & Curators share a Love-Hate Relationship with Millennial Travellers

Millennial travellers have often been called lazy and entitled with extremely demanding travel needs, but try as you might, this growing segment of travelers have been estimated by experts to take close to 320 million trips in 2020. Millennial’s travel needs and habits are very different from the yesteryear travelers as they are driving new trends by opting out of predictable fixed itineraries in favour of activities and new experiences. With their numbers and importance continuing to rise, the millennials are perceived today as the most sought-after demographic in terms of marketing.

In an honest to heart chat with three leading tour operators, Raadia Mukadam got together with Arun Raghu, Co-Founder, Travel.Earth, Sahil Wahid, Director, Revel Travel Links Pvt Ltd, and Bhawna Rao, Founder & Curator in Chief, Encompass, to understand why they share a love-hate relationship with this fast-growing segment of travelers and what is their game plan to woo the very fast-growing yet elusive segment of travelers. Excerpts.

What has been the growth of the millennial travel segment in the last five years and How much market share do you see them commanding in the next five years?

Arun Raghu: The millennial travel market has emerged to be one of the most distinct, compared to other consumer bases. According to Travel Professional news in 2017, 87% of millennials look to social media for their next travel experience. Social media has played a significant role in millennial travel trends. Over the last 5 years, the annual global travel has been increasing on a yearly basis. Below is the global outbound travel data with the market expense for the last five years.

YearVolume (In Million)Value (In Trillion)
20141.33$1.41
20151.39$1.35
20161.47$1.37
20171.56$1.45

Bhawna Rao: Millennials, the young breed of adults born between the 1980s and mid-90s are here to stay! The words that come to your mind when you think of millennials are often ‘technology-driven’, ‘innovators’, globally-connected, ‘seekers’, ‘influencers’ and  ‘social media junkies’. It is said that they are the ones who will drive the travel and tourism market as they are expected to reach their peak earning and spending in the coming decade, making them quite honestly the fastest growing tourism demographic.

Last five years has shown a significant growth in millennial travel as an increasing number of millennials are making travel a priority compared to the previous generations. Affluent millennials planning a luxury vacation are driven by authenticity and truthfulness. They are conscious travellers and cocientious travel, environmental sustainability and social responsibility are subjects close to their appeal and ethos. The truth is that younger travellers are more interested in experiencing a digital detox or getting a PADI certification in diving, compared to sipping cocktails in a resort in Maldives. When you experience something unique and different, they can be talked about, photographed, and shared on social media. Hence selling point for this generation is definitely going beyond cookie cutter packages.  

Sahil Wahid: The millennial segment of travel has seen immense growth in the past five years thanks to more access to information, higher disposable incomes and a YOLO attitude towards life (an attitude that embraces being truly grateful for what you have and also living each day like it was your last.  A majority of millennials today prioritize spending their money on an amazing travel experience they will never forget than to just save and invest the same as the previous generations might have done. By definition, the oldest millennials in the next 5 years would be around 40 years old while the youngest around 25, and hence I know it would constitute a very large market share. 

Why is it that travel agents or tour operators are said to have a love-hate relationship with this growing segment of travellers?

Sahil Wahid: I love this segment because it has huge potential since everyone is either living or trying to replicate the social media influencer lifestyle. If one can tap into this market correctly, it can be highly profitable. On the other hand, you tend to hate it because it is an overcrowded and competitive space with the travelers expecting all the frills and services but not wanting the associated costs that come with it. The consumers have a mind-set that sometimes discounts the effort and skillset it takes at the backend to plan and curate these detailed and unique travel experiences, which is naturally unnerving.

Bhawna Rao: I honestly love the millenials because there is a huge opportunity to pitch travel online to attract this segment as they are seeking authentic conscious and experiential travel, which is something I am also passionate about. Having said that, the present-day travel agent needs to be savvier both in terms of technology and the way they curate travel experiences in order to be truthful to their offerings. 

But the massive flip side to millennial travelers is that they opt for cheaper accommodation and are always looking for online deals and discounts which don’t work well with conventional luxury travel agents. According to Expedia’s Millennial Survey 201717, 62% of Indian millennial travelers prefer to make their travel bookings through an online travel agency (OTA), and 19% book through hotels or airline websites directly hence we are left with a very small portion of the pie. Millennial travelers are increasingly booking on Airbnb and prefer villa and home rentals recommended by friends and social media. Airbnb had grown more than 120% from the previous year which is a major setback to the travel industry too.

Arun Raghu: Millennials are more inclined towards authentic traveling. They prefer to immerse themselves in the local culture in a meaningful and intimate way, which is why they don’t prefer to set itineraries or plans that are provided by travel agents and tour operators. They also prefer using online book facilities for most of their travel purchases. Their dependency on travel operators is not as much anymore. However, the spending power of millennial travelers has significantly increased. Travel and tour operators want to tap into their market for this very reason.

Many millennial travellers feel that they can do away with travel agents and tour operators. What are the challenges you have faced converting this segment?

Arun Raghu: 97% of the millennials read about their vacations online and do the bookings online too. Gone are the days where travel operators were contacted for doing the bookings. According to 65% of millennials, the actual fun is in planning the vacation than living it. 

Sahil Wahid: I understand that a lot of people might feel that they can do away and with the typical travel agent format, as everything is available at the click of a button. The challenge is to show consumers the value they get from using a travel consultant like us, be it from a monetary perspective or for ease of booking. Also in times of an emergency or crisis, a good travel consultant is there for you and will help you sort out/change plans if needed whereas it’s tougher to get in touch with someone who is just sitting at a call center at the other end of the world.

How important are curated experiential packages in today’s very dynamic travel scenario?

Bhawna Rao: Millenial Travellers are seeking new and authentic local experiences, which goes beyond just sightseeing.  Driven by social media content, travelers are craving unique and eye-catching Instagrammable moments. Local festivals and events in breathtaking locations and the creation of the ‘one-of-a-kind’ moments will have strong resonance in this market and hence curating travel packages will be of significant importance. One more trend in this market is ‘curated celebration travel’ such as milestone birthdays and anniversaries, which is expected to grow at a rapid pace and become stronger and more innovative in the way it is done.  

Sahil Wahid: Going forward it won’t just be important, but the standard! Travel is not just about visiting a new place but also its food, culture, music, people, etc. I see huge potential in this type of travel as people want more than just going to a new city or country and ticking things off of a bucket list. The new curated tours we design explore various interests be it cultural, culinary, fashion or adventure and most importantly travelling with incredible like-minded people in small groups makes it intimate, niche and a lot of fun.

Arun Raghu: Curated travel experiences do hold significance. There are consumers in India who still prefer traveling with a set plan organized by a tour operator. However, owing to social media and the internet, a large number of travelers prefer experiencing a place on their own inspired by the content they consume on social media. The dynamic travel scenario is an interesting new addition to the way people travel but it has not completely replaced curated travel experiences. While millennials prefer spontaneous travel, older generations rely on curated travel experiences by tour and travel operators. 

Despite travel technology at their fingertips, what value do tour operators add that draws this segment to them?

Sahil Wahid: A true travel consultant spends years honing their skills through research and actual travel – undergoing extensive training, meeting new suppliers, building relations with hotels, operators, and other service providers. It might seem easy to book a holiday; however, we bring a lot more to the table when it comes to delivering the experience. Let’s say,  one might be able to book a hotel or service for the cheapest price online but depending on our relationship with a hotel or service provider we are able to throw in value adds, upgrades, and ensure a superior experience.

Bhawna Rao:  I’m glad you asked this question because I believe there are definite pointers to sweeten the deal or hold an allure to this elusive segment. Here are a few tips the fraternity could use to capture a larger segment of millennial travelers.

  • I think tour operators should focus on curated, unique, novel, and authentic cultural experiences and unexplored destinations.
  • We could introduce loyalty programs or subscription models that can lure the millennials by providing discounts and other benefits to their travel.
  • We should also adopt long-term strategic plans for affluent millennial travelers as they are capable of driving high-value bookings and get influencers and celebrities to endorse your offerings.
  • We need to focus on social media and online promotions using Instagram and Facebook.
  • We could activate travel with offline promotional events and campaigns
  • Work on your brand building and brand recall by being socially active is very important in this day and age as there is zero loyalty.
  • Improve your online presence by being more tech-savvy. Build apps which are user friendly and convenient to use

This new generation of travelers we call millennial travelers are here to stay, and elusive and demanding as they might be, they will not be able to do away with travel and tour operators and curators. Because just when you think the game is over, the travel fraternity pulls out a wild card that turns the table.

By Raadia Mukadam

https://tourismindia.org/every-interaction-is-a-moment-of-truth-to-attain-service-excellence/

https://www.youtube.com/watch?v=uGFDyN8dZSU&list=PLcjK_FEaQfQOOM31isNPsSYK_xgcibT8g&index=9

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