Millenials and Baby Boomers Consumer bEHAVIOUR WITHIN THE LEISURE TRAVEL INDUSTRY

(Photo credit Deloitte, 2016)

The concept of generations aims to categorise a societal group, across a number of years, which share the same values, historical experiences and ‘persona’.

(Photo credit Vivion, 2016)

Millenials were born between 1977 and 1995 (Howe and Strauss, 1995)

(Photo credit, Vivion 2016)

Baby Boomers were born between 1946 and 1964 (Howe and Strauss, 1995)

Use the below link to find out more about Millenials.

The focus of the following discussions will be related to similarities and differences in consumer behaviour in Millenials and Baby Boomers, within the leisure industry.

(Photo credit Deloitte, 2016)

The leisure industry encompasses many activities, services and products; and Millenials are thought to be ‘changing the face’ of the leisure industry (Clark, 2016). Millenials are also spending more on business leisure creating a new industry deemed as ‘bleisure’. Business flights are expected to see an increase by 50% by 2020 (Barton et al., 2013), but this report will focus on travel as leisure only. As Baby Boomers are nearing retirement age, they are also a key generation within the travel and leisure industry (Vivion, 2016). Both Millenials and Baby Boomers regard travel highly, and prioritise leisure travel (Deloitte, 2016; Vivion, 2016). However, they also possess different attributes resulting in opposing behaviours. Millenials make up the largest generation category 92 million, as opposed to 77m Baby Boomers (Goldman Sachs, 2017). A Millenial’s attitude is much different to that of Baby Boomer, as they are more focused on teamwork, achievement, and good conduct (Howe & Strauss, 2009). Millenials are also thought to be more educated, with the accessibility of and necessity of degree level qualifications being more prominent.

(Photo credit Deloitte, 2016)

'A more confident consumer' (Deloitte, 2016)

Consumer behaviour is the study of a person’s behaviour pre and post purchase, and the actions throughout these processes, which determine how they satisfy their needs (Schiffman & Wisenblit, 2014). There is no doubt that the surge in technology has been a prominent factor of Millenials consumer behaviour; particularly within the travel industry where it is becoming less of a luxury and more of a necessity in satisfying consumers needs. Digital reliance, in addition to economical indicators, has brought about a rise in the leisure consumer (Deloitte, 2016).

(Photo credit, Google.com, 2016

There have been various potential threats to the travel industry sector; unemployment rates, geopolitical issues, terrorism, and some high profile disasters, such as the tsunami in Thailand, 2004. However, even with the presence of such threats, the leisure travel industry remains robust, and has grown by 5.6% to become the second largest segment within the diverse leisure sector (Deloitte, 2016). Millenials have become essential to the leisure, and business travel industry; with a proposed total of $1.4 trillion spent on travel by Millenials, per year by 2020 (Clarke, 2016). Leisure travel has become more accessible to Millenials, through Online Travel Agents (OTA’s), travel apps, aggregator sites, metasearch providers and through their lifestyle choices; living with parents, delaying marriage, and having no commitments to a mortgage. In Q1 of 2016, Millenials were reported as the biggest age group spending on short breaks, and holidays (4 or more nights), whereas Baby Boomers were the smallest spending group in both categories. The limitation to this data is that Millenials outweigh Baby Boomers by 15 million (Goldman Sachs, 2017), and therefore dominate spending in most leisure categories. However, other reasons for them dominating the travel leisure sector are due to their attitude and high regard for leisure travel.

A decision in any scenario is only present when there is more than one option, and there is a perceived need. This is explained by need recognition, where desired and actual needs are recognised (Bruner et al., 1988). Baby Boomers were not exposed to the sophisticated marketing strategies that Millenials are. Therefore there is an increased level of desired need recognition within Millenials, which could be reason for the increased levels of leisure travel amongst this generation.

Consumer decision-making Model (Solomon et al. 2016)

Once a consumer recognises there needs to be a decision made, they experience a process involving an input, a process phase and an output (Schiffman and Wisenblit, 2014). The marketing mix, communication sources and socio-cultural factors influence the input process. Socio cultural influences are a key part of the disparity between Millenials and Baby Boomers consumer behaviour, as they have different values and media influences. The process phase of the Consumer Decision Making Model also presents aspects, which are inconsistent between Millenials and Baby Boomers. In particular, research shows there is a large discrepancy with how Millenials search pre-purchase.

(Travel trends by generation AARP, 2014)

The growing presence of Online Travel Agents (OTAs) has created a shift in Millenials consumer behaviour within the leisure travel industry (Barton et al., 2013), and has also caused an emergence in metasearch providers, and aggregator sites to cater for the Millenials pre purchase search behaviours (Deloitte, 2016). 79% of Millenials use review websites, as opposed to 59% of Baby Boomers; 65% of Millenials use mobile apps for travel, where only 40% of Baby Boomers use apps; and 77% of Millenials use travel booking websites, against 50% of Baby Boomers (AARP, 2014). These statistics show a significant difference in the way Millenials and Baby Boomers behave in the process phase of decision-making.

Decision-making continuum (Solomon et al. 2016)

Millenials and Baby Boomers have different perspectives of decision-making: Millenials arguably take the rational perspective through their pre purchase search behaviours. Whereas Baby Boomers fit more so with experiential perspective where a decision is made with high involvement but not necessarily rational. This correlates with Solomon et al. (2016) types of consumer behaviour continuum, where Millenials sit within extensive problem solving, and Baby Boomers lie closer to limited problem solving behaviours (Solomon et al., 2016). One of the reasons presented for this involves the development of a strategy for online searching; consumers are limited in their information- processing capacity and therefore are not always successful in their online search (Schiffman and Wisenblit, 2015). Millenials are more adept with their online searching strategy due to the dominance of technology, and use of mobile apps, and are therefore more inclined to use these channels for leisure travel searching and booking. Also, Baby Boomers are 23% less likely to use a budget (AARP, 2014) indicating a more established criteria, and a loyalty to a particular travel brand and therefore lower necessity for searching the best deals.

Tri-componenent model (Schiffman and Wisenblit, 2014)

The formation of an attitude can occur through classical conditioning, instrumental conditioning or complex cognitive process and is proportional to ones belief and their weighted importance of each attribute. Reference groups and media pressures influence attitudes, like decision-making. The tri-component model acknowledges the relationship between conation, affect and cognition (Schiffman and Wisenblit, 2014), and forms the foundation for other attitude-focused models. The models most applicable to the attitudes of Millenials and Baby Boomers are the tri-componenet attitude model, and the attitude-to-the-ad model. Within the tri-componenet model, Millenials are more inclined to behave in accordance with the experiential hierarchy involving an emotional response, which links with the attitude-to-ad model; Millenials are more exposed to online digital media marketing, and the pressures associated with that. For example, Millenials are twice as likely to share travel photos (Barton et al., 2013) creating competition and pressure within peer groups and Millenial culture. Whereas Baby Boomers are more likely to behave in line with the low-involvement hierarchy which bases its attitudes on good or bad experiences. Baby Boomers are less likely to use OTAs and online channels for booking holidays, because of previous search failures.

Attitude-toward-the-ad Model (Schiffman and Wisenblit, 2014)

Travel lends itself to the multi-attribute models, as there are numerous variables; cost, destination, commute, brand, type, period, safety and risk, and appeal. Millenials have more exposure to online and digital marketing, and therefore their attitudes are more likely to be influenced by advertisements. The risk of cognitive dissonance is also increased with the high volume of variables present in leisure travel.

Both generational categories are key groups within the leisure travel sector, but it is clear that Millennials are changing the face of leisure travel, and gaining more power as the consumer. The increasing trend of group travel, and solo travellers within groups has affected the hostel market, and improved the provision and quality of hostels globally. Millenials now make up 70% of hostel guests, and 9/10 now offer private rooms (Clarke, 2016). Travelling has become more accessible, safer and more appealing, not least for social media pressures. There is also increased transparency with the emergence of aggregator sites, and online abilities to post reviews. Social and political factors have also influenced Millenials travel habits, as less Millenials are opting to buy houses, start families and commit to a job for life. Achievement is also a prominent characteristic of Millenials (Howe and Strauss, 2009) and many are choosing to boast about their travel experiences on social media platforms as a way of portraying this.

Credits:

Created with images by Hans - "backpacks travel bags"

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