Travel is Plateauing for Everyone but Millennials

(Source: Travel Pulse)

Following a record-breaking year for leisure travel in 2016, vacation spending during the year ahead will be flat, according to MMGY Global’s just released Portrait of American Travelers survey.

A bright spot in the slowdown, however, is that Millennial families will travel more and spend more than all other generations, the survey found.

“The last year was the best year we’ve ever seen; this year will not be a negative but it won’t be positive either,” said Steve Cohen, MMGY Global’s vice president of insights and research.

Cohen spoke during the launch of the firm’s 2017 Portrait of American Travelers study, now in its 27th year. The study, which measures over 2,000 variables, is based on responses from nearly 3,000 U.S. adults who took at least one overnight trip a minimum of 75 miles from home in the past year.

According to the survey, the U.S.’s estimated 60 million traveling households will spend up to $5 billion less on leisure travel this year—a less than 1 percent dip from 2016’s eight-year high.

Travelers reported spending an average of $4,833 on vacations during the past 12 months. That’s the second highest amount reported in the last eight years, however, it represents a 4 percent drop from 2016.

For the first time since 2013, travelers said they planned to spend an average of $4,815 on vacations in the next year, which is less than they did during the previous year. This means that across the approximately 60 million traveling households, up to $9.2 billion less will be spent on leisure travel.

Asking whether “it’s all doom and gloom” though, Cohen said there are always opportunities for travel marketers, namely Millennial families.

Millennials—which MMGY defines as 18 to 37-year-olds—now account for the largest generational population in the U.S. And as the only generation to report spending more on future travel, they are the key to the future health of the industry, according to the report.

Yet, Cohen said, “We don’t advocate going after Millennials [in general]. There are too many of them; to craft a message for that group is extremely hard to do.”

Instead, the industry should focus on Millennial families, said Cohen.

This group, made up of married or unmarried couples who live together with children aged 17 or under, represents 16 percent of all American travelers, according to the study.

Millennial families took a combined 36.9 million vacations and spent $50.4 billion on leisure travel during the past 12 months.

While U.S. travelers only intend to travel 6 percent more this year, Millennial families plan to travel 35 percent more, the study found. And Millennial families intend to spend 38 percent more than Millennial couples on vacation and 88 percent more than Millennial singles.

In terms of where they travel, 26 percent of Millennial families vacation in international destinations compared to less than 20 percent of Millennial couples or singles.

Among the study’s other findings:

—Compared to last year, a substantially greater share of American travelers’ vacations are to domestic, rather than international, destinations. Domestic vacations now make up 85 percent of total vacations, up seven points from last year.

—Search engine results are the most considered source throughout the different stages of travel planning, while Google is now the top travel site.