Interesting article i read this morning and a very important reminder to businesses which want to remain relevant, vibrant, and thrive to the next generation.
They’re not millennials: Targeting Generation Z
They’re already buying their own travel, and, perhaps even more importantly today, they are heavily influencing their families’ travel decisions, oftentimes planning entire vacations bankrolled by mom and dad.
Marketers are increasingly looking to reach Gen Z, which by some calculations is now the largest generation in the U.S., or very close to it.
Lynn Kaniper, president of marketing agency Dana Communications, said, “I do feel like they exert influence on their families and their travel decisions, and I do think that is why it’s so important for us to be considering them and not saying, ‘These guys are too young,’ or, ‘They’re not really who we’re going after.’ They do influence.”
Defining a generation
First of all, Gen Zers are decidedly not millennials.
“Gen Z is already around 22 years old,” said Jason Dorsey, co-founder of the Center for Generational Kinetics, which studies millennials and Gen Z. “They’re 21 to 22, and that’s shocking to most people, because they still think of 20-, 21-, 22-year-olds as millennials, and they’re not. This generation is just wholly different, totally different from millennials.”
Sources vary on the birth years assigned to generations, but most agree Gen Zers were born starting around 1996. That’s the marker used by Expedia and the Center for Generational Kinetics in a study released earlier this year. That study defined millennials as those born from 1977-1995; Generation X, 1965-1976; baby boomers, 1946-1964; and traditionalists, 1945 and earlier.
Dorsey, as well as other researchers, defines a generation less by years and more by the events that shaped members in their formative years.
For example, many view 9/11 as the event that defined millennials.
Gen Zers’ parents were largely generation Xers, who had different parenting styles than millennials’ baby boomer parents.
Boomers wanted their children’s lives to be easier than theirs had been, and they were successful, leading to what many view as millennials’ sense of entitlement, Dorsey said. Generation X parents wanted their children to be less reliant and more self-sufficient.
“The key driver,” Dorsey said, “is, as Generation Z was coming of age, they were given the aftershocks of the Great Recession. They didn’t personally go through it because they were too young, but their parents were right smack in the middle of it. As a result, their parents told them, ‘You need to work hard. You’ve got to control your spending. Times can be uncertain.'”
The result, Dorsey said, was a generation that is more conservative about spending. For example, the “millennial mindset” around college was to get into the best possible college and pay for it with loans, leaving many with high student debt upon graduation. Gen Z, though, is more interested in getting a degree from a less expensive college or university and graduating with as little debt as possible.
In many ways, Gen Z more closely mirrors baby boomers than millennials.
Jonah Stillman agreed that Gen Z’s defining event was growing up in the midst of the Great Recession. Stillman, 17, is himself a member of Gen Z. He and his father founded the company GenZGuru, and he researches his generational peers and frequently speaks on the topic.
“We’re much more competitive, self-motivated and self-focused,” he said of his peer group.
Gen Z is also defined by its use of technology. Other generations are what Stillman calls “digital pioneers,” in that they still remember a time before technology like smartphones was so pervasive. But for Gen Z, technology isn’t just second nature, it’s an integral part of who they are.
Abhijit Pal, head of research at Expedia Inc., said he believes one of Gen Z’s defining moments was the introduction of the iPhone.
“I see them as growing up with technology and internet,” Pal said. “They’re very savvy with technology adoption. They’ve always been connected. As the millennial generation was defined by 9/11, I think Gen Z’s defining moment is the iPhone.”
Gen Z has also enjoyed the best job market since the one that younger Gen Xers and older millennials enjoyed during the tech bubble of the mid-to-late ’90s, Pal said.
Dana Communications, which works with travel and hospitality brands, has been researching Gen Z and communicating its importance to clients for some time, Kaniper said. To her, Gen Z’s members are entrepreneurial individuals. They like content in “snackable bites,” and they value authenticity.
“They would rather have a real person in a marketing or advertising campaign than a celebrity,” Kaniper said. “They connect with that more. It means more to them.”
The kind of travel they want
Gen Zers might be young and without huge incomes, but that isn’t stopping them from traveling.
“They do want to spend money on travel, but they are trying to be more fiscally responsible with it,” Dorsey said. “It’s great they want to travel, but they want to get as much for their money as they can, and that’s important.”
Gen Zers also rely on online searching to find the destinations they want to visit, Dorsey said. That online use is not limited to organic search and OTAs; they are also interested in reading ratings and reviews online. A top priority is more local, Instagrammable experiences.
Wendy Olson Killion, global senior director of Expedia Media Solutions, agreed that Gen Z wants to travel.
“They have discretionary money to spend on travel,” Killion said. “Whether they’re getting it from their own means or from someone else, they’re making the decisions, and they have that discretionary budget.”
Social media plays a big role in influencing where they want to go, she said. They are also the most likely of all generations to travel internationally.
According to Pal of Expedia Inc., Gen Z is embracing the sharing economy, and they are more likely to book things like alternative accommodations. They are also brand agnostic and can be influenced by coupons. Like most travelers today, they value experiences over material goods (Expedia’s study found that 74% of Americans feel that way across generations).
Julia Douglas, president of Chicago-based Jet Set World Travel, also cited Gen Z’s desire for authentic, local experiences.
“They really want to live like a local, not have the traditional touring guided experience,” Douglas said. “They want to do something with a local host and get their hands dirty and connect with people they don’t know.”
A generation of influencers
While the older echelons of Gen Z are at an age where they can book their own travel, the cost is often financed by their parents. However, they and their younger counterparts are heavily influencing their families’ travel decisions.
“It’s amazing how influential they are, and also how crucial it is to appease them in the planning process,” Douglas said. “They almost become the primary point of contact even though they don’t have the wallet.”
To accommodate Gen Z travelers, Douglas said, she involves them in the planning process. They are encouraged to participate, whether it’s during an in-person meeting or via video conferencing.
Terrie Hansen, Virtuoso’s senior vice president of marketing, said 88% of the consortium’s members said their Gen Z children have a large sway over family travel decisions.
“Their parents are still making and paying for the travel experiences, but they’re huge influencers,” she said.
Gen Z children of clients should not be ignored. For one thing, parents are often pleased when agents do something to surprise their children during the planning process or while in destination. For another, as those children age, they will be more likely to use an adviser like their parents did if they recall good experiences.
Instead, agents should include them in the planning process and do things for them they often already do for their parents, Hansen said.
For example, if a bottle of champagne is waiting for the parents upon arrival, have something waiting for the Gen Zer, too.
“Make them part of the process, both the planning and what happens during the trip,” Hansen said.
A Gen Z agency
As young as they might seem, members of Gen Z are also entering the workforce, including the agency channel.
Rob Karp is the founder and CEO of MilesAhead, an agency that has 12 employees and sold $7 million in travel last year. He is also 20 years old and a student at Cornell University.
Juggling his business and school “is definitely a challenge,” Karp said. But he maintained it’s a rewarding one.
“If you figure out how to do it the right way, it just adds such another flavor of excitement and another part to our lives,” he said.
Though he’s relatively young, Karp is no stranger to running a business. He founded MilesAhead the day before his 15th birthday. For a small fee, he would consult with people to help them use their frequent flyer miles and credit card points for free airline tickets, which, to this day, remains one of MilesAhead’s specialties.
“People loved it, and they started referring out to their friends,” Karp said. “The people who have miles are typically the people who spend money, so they all of a sudden said, ‘Well, if we’re going to trust the 15-year-old to book our flight, why don’t we trust the 15-year-old to book our hotels?’ And that’s how it started to organically grow.”
Today, 10 of Karp’s 12 employees are also Gen Zers, several of them fellow Cornell students, like director of marketing Grace McBride.
MilesAhead does have a number of clients who are older members of Gen Z. Many are also college students, perhaps looking to arrange trips during their time studying abroad, which is a huge market, according to Karp.
Even so, McBride said the “sweet spot” for MilesAhead is her generation’s parents.
Karp agreed: “We can connect with the parents, because the parents don’t really know what their kids want the same way their kids know it, or people their age know it. We’ve done these trips ourselves.”
When Karp’s Gen Z clients are paying for their own travel, he said they do tend to be price-conscious, but they are willing to pay for extras that enhance their travel experience.
“People have a willingness to pay to have these really — I don’t want to say ‘experiences’ — but they’re willing to go the extra mile on certain things, and they’ll compensate on other things,” he said. “I think that, yes, some people are obviously going to be more price conscious than others and they’re looking to get value, but if a Gen Zer sees value, they’re going to be willing to do it.”
Reaching Gen Z
Doyle said that focusing on digital and social channels is the best way to reach Gen Z, whether courting them as potential clients or as influencers in their families’ travel decisions. They live online, and that is where they will look for content that informs and inspires their travels.
Sarah Fazendin, an agent with Tafari Travel in Denver, said she uses specific online content to appeal to travelers, including members of Gen Z, who are likely to use the internet to research destinations.
“Everybody obviously goes to the internet to start researching travel first,” Fazendin said. “But particularly that generation, I think, has a trust in what they see on the internet and a certain authority that maybe older clients don’t.”
Fazendin posts keyword-optimized travel articles, tailored to attract the attention of people researching trips. For example, she said, she might post an article comparing one beach to another in Belize, or five great restaurants in Managua, Nicaragua.
A social media presence as a component of a marketing plan is also important.
“Make sure that you’re on the platforms we’re on,” Stillman said.
For Gen Z, that means Snapchat and Instagram. But Stillman did agree that Facebook’s targeted marketing capabilities have value that other social media sites don’t.
“More than a third of Generation Z travelers actually chose a destination specifically because they saw a posting about it on social media,” Pal said. “So that’s where they’re doing a lot of their research, and they’re falling in love with their bucket-list dream-travel destinations.”
When trying to attract that demographic, agents should focus their marketing messaging on the kind of experiential travel that Gen Z wants to do, according to Brian Hegarty, vice president of marketing for Travel Leaders Group.
For example, he said, focus on special events they could attend while traveling. Instead of posting about an all-inclusive deal on social media, look to post a picture of a more adventurous pursuit a traveler could undertake on a Caribbean vacation.
“You happen to be staying at the all-inclusive, but that might not be the primary driver of why you’re going on that trip,” Hegarty said. “The primary driver might be because you’re going to take surfing lessons.”
Those are the same kinds of things agents should highlight when they are working with clients who have Gen Z children, Hegarty said, and options and itineraries should be presented in dynamic ways.
It’s about selling the experience, he said, and social media is an important component of that.
“Gen Z grew up on social media,” he said. “They have a little bit of social ‘FOMO’ — a little bit of social fear of missing out — because they see all of their friends documenting their entire lives and posting everything on it. So social media has a much larger influence over travel plans with Gen Z than it did over previous travel generations.”
Dorsey said he believes agents will eventually start hiring Gen Z influencers to get their message across to their peers — “evangelists for their travel agencies,” he said — because members of Gen Z trust their generational peers.
He also believes the generation is an important one for agents to reach as they continue to influence family travel and mature into potential clients.
“Now is the time to be paying attention to Gen Z, but recognizing they’re still on the front end,” Dorsey said. “Anything you can do now to engage them or understand them really does give you a head start.”
