Edrian Pamintuan

From Baby Boomers to Millennials: The Changing Mindset of the Luxury Traveler

When you picture a luxury vacation, what comes to mind? Perhaps you envision indulgent finishes, gourmet meals, or airline pampering. These are all important, but they aren't the only elements of luxury travel. After all: how we define luxury is evolving, so it only stands to reason that upscale vacations will shift as well.

At the center of all this change lies a new generation of luxury tourists: Millennials. As their income and spending power increases, these young travelers are excited to take advantage of experiences that were denied during the Great Recession, the ensuing recovery, and, of course, the pandemic. These events have given them wildly different expectations from their Baby Boomer and Gen X predecessors.

Millennials' unique approach to travel and leisure could prompt some significant challenges in the luxury market, but opportunities also abound. We've highlighted several of these below, as well as general trends to keep in mind as Millennials embrace luxury travel.

Millennials Enter the Luxury Travel Market

Millennials have long prioritized travel. Already in 2013, a survey from Expedia revealed that travelers under the age of 30 took nearly nine business and leisure trips every year.

While COVID temporarily brought this to a halt, travel has clearly rebounded for Millennials. They aren't just traveling more — they're making a greater effort to turn their trips into life-changing excursions. This was evidenced in a 2022 Amex Trendex survey, which revealed that 67 percent of Millennials wanted to book once-in-a-lifetime vacations that year.

While Millennials' commitment to travel is clearly an enduring trend, all signs suggest that a significant subset of this generation is ready to embrace luxury. This is an important form of indulgence, with Amex data suggesting that well over half of Millennial travelers would rather take a major vacation than buy a new car.

Average spending per trip is certainly on the rise, and not simply due to inflation. Rather, Millennials are willing to spend more on details that make their trips feel exclusive, memorable, and comfortable. A 2021 Tripadvisor and Accenture report on The Future of Travel found that 37 percent of high-income Millennials were willing to spend over $5,000 on luxury vacations.

Luxury Becomes More Casual

Asked to describe previous versions of travel luxury, many Millennials would use terms such as 'stuffy' or 'uptight.' While they're certainly interested in capturing the most evocative Instagram aesthetic possible, these young travelers view different finishes, menus, and experiences as aspirational than their Boomer counterparts. They're eager to embrace luxury, but preferably with a more lighthearted feel than the upscale options of yesteryear.

Van life epitomizes this trend. At one time, traveling for months on end wouldn't have seemed aspirational, but influencer culture has made it the goal of many Millennial travelers. It's not the specific vehicle or the locations that give van life its luxurious perception, but rather, the sheer freedom that van-based travelers seem to embody. Millennials working 9-to-5 jobs crave this sense of adventure, even if they ultimately find it in a more conventional hotel or rental.

Travel as Self-Care

Millennials believe that everybody should be able to enjoy eye-opening experiences in exciting new locations. Traveling is no longer strictly limited to the wealthy, nor are luxury experiences in general. Rather, these represent carefully planned opportunities for boosting wellness and general mental health.

That's not to say that these aren't priorities for Baby Boomer or Gen X travelers, but Millennials are often far more strategic in how they build travel into overarching self-care efforts. In the aforementioned Tripadvisor study, over two-thirds of respondents shared their intention to spend more time and money on self-care, with nearly half citing relaxation as the main reason for traveling.

FOMO Prompts Action

Spurred by social media, Millennials have often felt a strong fear of missing out. Coined FOMO, this phenomenon has heavily played into everything Millennials do — how they socialize, how they interact online, and especially how they travel. While they certainly derive personal benefits from traveling, they are often initially prompted by an inner critic that notices other Millennials enjoying more and better experiences.

For years, luxury brands have leveraged the concept of FOMO to build urgency into Millennials' travel plans. Gorgeous ads or sponsored social media posts show young users where they could be and what they could experience. This common phenomenon has helped to fuel the YOLO (you only live once) economy, which has influenced not only how Millennials work, but also, how they approach travel.

Millennials Discover Luxury Airlines

Affordable airfare has given many Millennials a taste for jetsetting, opening the possibility to those who may have previously been forced to travel by car. As their incomes grow, however, Millennials have a lot less patience for the cramped seating and other sacrifices made while flying basic economy.

These days, a significant subset of Millennial travelers believe that an enjoyable flight sets the tone for a great vacation — so they're more than willing to invest in first-class. Often, they take this a step further by booking flights with airlines that cater primarily to luxury travelers. Many are willing to pay thousands per flight to skip the hassles of budget travel while also being heavily pampered. This means gourmet dining, fine wine, and spacious seats.

The Importance of Sustainability

Millennials are well aware of their carbon footprint and eager to do what they can to preserve the environment. Many are all too familiar with the devastation that over-tourism has caused prized natural attractions — and they realize that, by always flying to their favorite destinations, they may contribute substantially to greenhouse gas emissions.

Luxury travel has sometimes been at the center of this problem, but it also promises to provide the solution. For example: alternate modes of transit are becoming more luxurious, so Millennials need no longer rely on planes alone. Exciting opportunities include the following:

  • Bigger and better road trips. The classic road trip takes a step up with help from today's trendiest and most luxurious vehicles. Eco-conscious Millennials are thrilled to travel via upscale hybrid or electric vehicles. A growing network of charging stations makes this a lot more convenient. Those who are unable to purchase Teslas and other high-class models can always rent for a few days and travel the country in style.
  • The return of luxury trains. Long ago, trains were often the epitome of luxury. It's still possible to enjoy a classy experience today, but availability is definitely more limited than it was during the height of America's railroad era. That's starting to change, however, with modern luxury train experiences allowing Millennial tourists to see the country from a unique vantage point.
  • Luxury cycling tours. Active Millennials love to pair travel with workouts. Some have even replaced traditional modes of transportation with their trusty bikes. Many business leaders see an exciting opportunity to cater to a niche market: passionate cyclists who want a taste of the finer life after they've put in their daily miles. Luxury cycling tours help these travelers access the best hotels and restaurants, where they can recharge as they prepare for yet another day of bike-based sightseeing.

Further Changes Are in Store: The Impending Rise of Gen Z

As we discuss the shift in the luxury travel industry, it's important to also acknowledge the certainty that Gen Z will bring about further changes. Currently, this up-and-coming generation (children and young adults between the ages of 11 and 26 years old) makes up a decidedly small portion of the luxury travel market.

That is about to change, however, with travelers in their 20s already showing an increased desire for luxury experiences at home and abroad.

Trends to look for in the next few years include:

  • Increased prominence of the metaverse within the travel sector. Non-fungible tokens (NFTs) go far beyond artwork these days. They're quickly making waves in every area of the luxury market imaginable — including the hospitality industry. These have already been used heavily to combine the best of virtual meetings with business travel, but are now about to enter the marketing picture.
  • Gen Z tourists are wary of social media trends. While social media has played a huge role in the travel habits of Millennials, the opposite may actually be true of Gen Z. Some are happy to get tips via TikTok, but insights from Destination Analysts suggest that they apply far more scrutiny to travel content than older vacationers. Luxury travel brands will need to work even harder to gain their trust.

Exciting opportunities lie ahead for the luxury travel market, which has become a lot more dynamic in a few short years. Brands that embrace the Millennial and Gen Z mindset will enjoy an influx of young travelers, which could translate to a lifetime of consumer loyalty.

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