The coronavirus pandemic has had the travel industry on its knees since its unwelcome appearance late last year and despite declining cases in some regions of the world, we still do not see light at the end of the travel restriction tunnel.
Covid-19 has dealt the 'largest blow to tourism ever' according to the United Nations World Tourism Organisation (UNWTO) and its crippling effects have been felt worldwide. So, amidst the dark clouds, is there a road to local travel recovery? I believe so, and leading us on it is a group of people that always leave me in awe – the Asian millennial.
millennials or Gen Y refer to people born between 1981-1996. This generation represents the last living adult generation to-date. A generation that is curious, open-minded, mobile and often at the heart of almost every shifting paradigm, whether economically or socially. Taking a look closer to home, the average Asian millennial was raised by baby boomers and grew up during an economic boom. That means they had the best education money could buy, grew up as global citizens, are well connected and are dubbed the first demographic of 'mobile-first' citizens.
So much has been written about millennials over the past few years and they seem to be at the epicentre of every major dialogue, change, evolution and conversation. It's got many wondering why this group of youngsters is getting so much attention and why the world's largest brands always seem to be vying for their business and brand loyalty. Some of you are probably also embarrassed to admit that you don't quite understand the millennials, who they are, what they want and why they're so important. Allow me to shed some light.
Why are millennials such an important demographic?
Asian millennials have been crowned with the title of being the largest spenders in history. Many of them opt to live at home with their parents, are educated and, as a result, have more disposable income to spend on experiences. They are also the first generation to grow up with mobile technologies and are pioneers in the world of social media. This exposure to social media sparks their interest in exploring the world for its natural wonders, cultures and experiences. Couple that wanderlust with spending power and you've got a generation that consciously sets aside significant travel budgets each year. In 2018, they spent a total of $200 billion on travel alone.
Aside from having monetary power, millennials also hold a large chunk of market share and comprise of over 60% of the Asian region in 2020, with a combined population of 1 billion people – 400 million in China, 400 million in India, and 80 million in Indonesia, compared to 120 million in the rest of Asia with a combined disposable income of $6 trillion. Collectively, they have immense purchasing power and this is why so many new emerging brands are catering primarily to this demographic and competing for their market share.
What millennials want
millennials are known to be curious, open-minded and more mobile than any other generation. They hold the common belief that life is too short, place a huge emphasis on life's experiences and making the most of the time that they have on Earth to see as much of the world as they possibly can. Travel and adventure ranks at the top of their list of life's priorities compared to other generations. It is what makes them who they are: people who are constantly looking to grow and be exposed to new places, immersing themselves in new cultures, building life's experiences by creating meaningful memories and taking the road to self-discovery through travelling. They seek adventure, often delving headfirst into the unknown and are firm believers in fuss-free travelling. They are inspired by pictures, videos and reviews shared by their peers on social media and use that as a map to plot their next adventures.
How they are going to save the world (or the travel industry)?
Despite Covid-19's setbacks, it is this group of globe-trotting wanderers that continue to save money for their experiences rather than acquiring material possessions (which has given the rise to shared economy brands such as Uber and Airbnb.) They aren't stingy by any means. They're just more selective about where they spend their money and experts believe that once travel restrictions ease-up, it is the millennials who will gladly fill the potholes of financial strain on the global travel industry road.
In the meantime, while travel remains out-of-reach anytime soon, the wanderlust generation will not be able to quell the travel-bug within them and will begin seeking adventures locally. The United Nations World Tourism Organisation (UNWTO) predicts that domestic travel will be the first to recover on the way to normalisation. It is therefore in the best interest of the domestic travel industry to seize the opportunity to reinvent itself and capture the interest of the millennial market through digital strategies and specifically curated experiences.
This is especially true for Thailand, where every direction of the compass points to different cultures, dialects, cuisines and natural wonders. The Thai hospitality industry must collectively tap into the spending power of these savvy, young and experience-seeking millennials and open their eyes to the fact that they need not go beyond the borders of Thailand to fuel their wanderlust, it is right here at home where their greatest adventures await them!
About the author: Rohit Sachdev is Chief Executive Officer and Founder of Soho Hospitality, an interior design, F&B consulting and digital marketing agency with a restaurant development arm compromising five brands: Above Eleven, Charcoal, Havana Social, Cantina Italian Kitchen and Soho Pizza. For more information please contact info@sohohospitality.com.
