A new report on current trends in the European travel industry reveals significant variation in demand among different demographics, with big differences in travel budgets, preferences, and behaviors. The report, conducted by global consultancy Simon-Kucher, includes a survey of over 5,400 mostly European travelers.
Most of the big divides in travel demand in 2024 are along generational lines, according to the Simon-Kucher study. While Baby Boomers are more likely to spend more on trips, Gen Z and Millennial consumers travel more often and on a tighter budget.
While Gen Z and Millennials increasingly have a preference for spontaneous and sustainable travel at a lower cost, older travelers are also fueling a rise in luxury and personalized travel experiences.
Source: Simon-Kucher
Across all demographics, leisure travel budget has grown by 9%, though that is mostly due to Baby Boomers, who reported having a 19% increase in their budgets. Gen Z travelers, on the other hand, only reported a 1% increase in their travel budgets.
For their part, Gen Z travelers go on trips more often, despite having lower budgets. They generally prefer experiences over costly possessions, and their tech-savvy approach helps them find budget-friendly options.
Source: Simon-Kucher
Travelers under the age of 25 also reported being more spontaneous, making last-minute bookings. Their approach to travel is more flexible and they typically do everything they can to maximize their adventures within their financial limitations.
Younger travelers are also more likely to look at reviews in order to inform their booking decisions. Part of the reason for that is because they tend to look for more personalized and authentic experiences, while also looking for responsible travel options that align with their values.
Another interesting difference between young and old travelers is that Gen Z and Millennials are over 80% more likely to go on solo trips. Hostels, for example, offer shared bedrooms and a unique social atmosphere common among young, budget travelers who often look to meet people along the way.
Source: Simon-Kucher
“The travel industry is experiencing significant changes, influenced by diverse traveler preferences and evolving economic conditions” said Ana Morillo, senior director at Simon-Kucher and lead author of the study.
“Our research reveals that travelers are becoming increasingly discerning, and seek value and unique experiences. The demand for sustainable and spontaneous travel, along with a rising interest in luxury, is reshaping the industry landscape. Companies that adapt to these emerging trends will exceed traveler expectations, fostering loyalty and achieving incremental growth in this competitive market.”
The travel industry is currently doing rather well. The economic chaos and lockdowns brought on by Covid-19 brought international travel to a standstill, dealing a major blow to the tourism sector in Europe. But following a favorable 2023, European tourism is expected to return to pre-pandemic levels, at least in the regions that it has not already done so, according to the World Tourism Organization.
“Following the bust of the pandemic and the revenge travel boom that followed, our study reveals that we are now entering a ‘boom and bust’ age within the travel industry, with some players experiencing a boom and some experiencing softer market dynamics,” said Dimitris Hiotis, senior partner at Simon-Kucher.