Millennials are under-indexing on airline and hotel apps, while dramatically over-indexing in their usage of branded OTA apps.
This finding challenges certain beliefs that the millennial is now booking directly more often and not bothering with an intermediary.
The data comes from a mobile analysis of 1,500 Android panelists featured in two new reports (paywall) from Strategy Analytics - one focusing exclusively on airlines (free with email) and the other on the overall mobile mix within travel.
As far as share, those aged 25 and younger actually under-indexed 6% less for airlines and nearly 8% for hotels.
Meanwhile, they over-indexed 2% on the OTA side of things.
On the airline front, the comparison between only airline apps and the total panel's usage highlights the significance of the spread between the demographics.
The above graphic shows both the index of app downloads and actual app usage; The dark blue represents those demographics that have downloaded an airline app (Delta, American, JetBlue, Southwest, United, US Air, Alaska Air) and the light blue represents usage.
Overall trends for airline apps show that:
- Males are overrepresented in both usage and downloads.
- Married panelists are downloading and using apps the most.
- The higher the income, the more likely it is that the consumer has downloaded, and used, an airline app.
- African-American users are underrepresented as far as downloads, yet over-index on actual usage.
According to Joshua Martin, Travel Analytics Research Service Director, there are some important challenges for hotels and airlines if these numbers hold true over the longer term.
Namely that the brands will lose out not just on commissions paid but also on the direct investments being made to entice the next generation of travelers:
As new technology such as Apple Pay makes booking travel on mobile devices easier – new threats to established players emerge.
If younger travelers become loyal to their OTA in lieu of an airline or hotel it makes securing regular and repeat customers difficult. While hotels and airlines are performing well with those 36+ as a new generation comes of age the companies must keep innovating to remain unique.
The continued focus on new technology and features are an important first step to achieving this goal.
Even so, the explanation for the OTA vs hotel vs airline app usage is a financial one: in general younger consumers make less money than older consumers.
This price sensitivity pushes the next generation of traveler to the OTA interface in order to find the best price among many options. This also gives OTAs a chance to earn loyalty and trust as the consumer ages into peak earning years.
Nonetheless, hotels seeking to woo these consumers should consider how they can still compete with the inventory and pricing diversity offered by OTAs on mobile.
By understanding their core users, while also indexing their consumer mix, branded travel app managers can begin to customize outreach and product for targeted demographics with the aim of improving engagement - and ultimately conversion.
NB: Luggage smartphone image courtesy Shutterstock.