“Those young people would be able to afford houses if they would just spend less on travel and eating out!” Those words have, in different forms, been uttered by many members of the older generations about young people’s spending habits.
In its latest “Future of Consumer” report released on April 3, financial consulting firm Deloitte confirmed that younger generations are spending an increasing amount of money on travel — for reasons that have to do with everything from the growingly unaffordable entry point for owning real estate to changing statistics around marriage and family formation.
Related: Spontaneous solo travel is increasingly a generational thing
“Compared to older generations, millennials and Gen Z are delaying marriage, home ownership and parenthood,” write the authors of the report while adding that “Americans who give up on homeownership” can redirect those savings to “experiences including travel.” “These shifts on household formations can have significant impacts on travel.”
Younger generations already make up a significant percentage of people taking leisure trips.
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Baby boomers will eventually become too old to travel (Gen Z will step in)
The exact numbers of people who travel are predicted to increase dramatically as millennials and Gen Z grow wealth while baby boomers age out of opportunities to go on long trips. According to Deloitte’s calculations, the former two groups made up around 30% of Americans taking trips in 2023 while that number is predicted to rise to more than 50% by 2030.
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“Baby boomers, representing a big share of both population and wealth, have long been an attractive consumer democratic, and will likely account for a big share in their travel retirement but they are beginning to age out of frequent travel,” the report reads.
Other tendencies in the travel space identified by Deloitte include a greater focus on sustainability — both from younger consumers that want to know what impact their trip will have on the environment and airlines and travel companies that want to appear sustainable to their customers.
‘We’re calling it the climate headwinds’
“We’re calling it the climate headwinds,” Matt Usdin, a Deloitte principal who heads its hospitality department, told TheStreet in an interview. “Over the last few years, the industry really became committed to sustainability. We’re expecting to see a tremendous amount more investment and innovation needed in the coming years as suppliers face pressures from individual travelers, corporate travelers and increasing global regulation.”
Globally, countries such as India and China are seeing some of the fastest-growing tourism demand both due to their large population size and a growing middle class that is gaining new opportunity for leisure travel.
In the near future, this will drive demand both for tourism within those countries, to nearby Southeast Asia destinations such as Thailand and Vietnam and global metropolises such as London, Paris and New York.
While Chinese tourists made up 6% of international tourists in 2010, that number has risen to 12% by 2019 and continues to increase. This, in turn, has caused hotels and travel companies to both market and tailor their services to travelers from China and India — the latter’s outbound travel is also expected to grow at a CAGR rate of 7.4% between 2023 and 2033.
