Rise of the Millennials in Luxury Travel

For years, luxury travel marketers have advised top suppliers and distributors to target the massive baby-boomer market, those born 1946-1964. This generation was portrayed as the present and future for the travel business, especially luxury travel.

The thought was (and still is) that baby boomers had growing disposable income as their kids left home and they had they had more time to travel. Little did anyone know that the kids never really would leave home and baby boomers would be saddled with caring for their own parents as they aged as well.

Nevertheless, at nearly every travel conference I've attended over the past 10 plus years, baby boomers were the "holy grail" for luxury travel marketers. And to be honest, they have become the major source of business for most high-end travel suppliers and will continue to be so for the near future.

But now here comes a new group, the millennial generation, those born 1981-2000 (also known as Generation Y), which is suddenly the hot thing for travel marketers. They have much more disposable income than their own parents did at the same age, they've traveled more (often with their parents) and had more unique travel experiences than any generation before them.

I began thinking about this new millennial market for luxury travel when I wrote a column that will appear in the program for ILTM-Americas, the third annual luxury travel event that will take place Sept. 22-25 in Mayakoba on Mexico’s Riviera Maya.

This will be the third time I attend this conference of some the top worldwide luxury suppliers and top luxury buyers (travel agents) from the Americas. And ILTM-Americas, as well as the larger ILTM that takes place in Cannes, France, every December, have been laser-focused on identifying the next generation of luxury consumers, as well as the next generation of suppliers and travel agents who will serve them.

Needless to say, millennials are all the rage today. According to MMGY Global's 2014 Portrait of the American Traveler, millennials will be the driving force behind the continued recovery of the U.S. travel industry. They also are expected to spend incrementally more on travel services than any other age group over the next 12 months. Even more important, 24 percent of millennial travelers are planning to take more overnight leisure trips in the next 12 months. They also spend significantly more on leisure travel services than previous generations. 

There's even better news in all this for travel agents. In a survey sponsored by the American Society of Travel Agents released earlier this year, MMGY Global found nearly 60 percent of millennials who used travel agents believed that their vacations were better than those organized without their assistance.

PHOTO: Today's millennials often have extensive foreign travel experience with their parents. (Photo by James Shillinglaw)

Now what does all this mean for the luxury travel segment? The answer is only good news. Many millennials have experienced travel on the high end as they were growing up. They have stayed at the top hotels and resorts, sailed on premium or luxury cruise ships, and taken high-end or independent tours of top destinations. In other words, they are used to experiencing travel in its highest forms and they don't necessarily want to go backpacking.

A certain segment of the millennial market also has significant income, given the growth of social media, Internet and other startup businesses that have brought newfound wealth to these individuals. They also have much more buying power because they have family money from their parents.

Millennials represent the wealthiest, most well-educated and well-traveled generation ever. So it stands to reason that their travel tastes will focus on the highest and most exotic forms of travel today. They certainly don't like "stuffy" luxury (although they may have acquired a taste for luxury accommodations when going on trips with their parents). They do enjoy great, but unobtrusive service, but more than every previous generation they seek unique experiences, cultural immersion and one-of-a-kind trips.

And yes, they want all that while having full access to the Internet and social media (for free!) as they let their friends and family know all about their travels.

So welcome the millennials! They are the new emerging force in travel—even in luxury travel. On the other hand, don’t forget about the baby boomers. They still have a lot of traveling to do, too—and they certainly have the income to support it. And after all this, I just realized I haven’t even discussed Generation X (those now born 1965-1980). They have money to burn on luxury travel products, too!

Meanwhile, between the emerging millennial market and the baby boomers, we are entering what may become another golden age for luxury travel!