The broad consumer shift toward experiences has been well known and well documented over the past half-decade.
In the most recent research from Arival and Phocuswright, a forthcoming consumer study of more than 8,000 travelers worldwide, 58% of Gen Z and millennial travelers say they are prioritizing their spending on experiences over things. For affluent travelers (household income of $150,000 or greater), that preference jumps to 68%.
But what does this mean for the broader travel industry?
From tickets to tours (& experiences)
The experiences trend is fueling a strong resurgence in tours and activities (note Viator’s 179% growth in gross bookings for Q3 2022 versus the same period in 2019). It is also driving – in part – a notable shift toward small group and private guided experiences vs. the purchase of individual attraction tickets.
Activity importance drives advance booking
Historically, travelers book most tours and activities either in destination or closer to departure, but after they have organized their transportation and accommodation.
However, we found that the booking window is highly correlated to the perceived importance of a specific tour or activity to a traveler and their trip. Travelers that place a higher priority on a specific experience are more likely to book it in advance.
Performing arts and sporting events tend to be booked furthest in advance, while tours and museum tickets are much more likely to be booked much closer to the day of the experience. This correlates directly to the perceived importance of the experience to the traveler.
Someone who follows a musical artist or sports team will organize a trip around that event, while a traveler on a leisure trip may book a tour or decide to visit a museum at the last minute.
Gen Z, millennials have different priorities
Younger travelers, however, appear to be taking a different approach to trip planning and both how and when they book. Why? The shift is because of experiences.
Travelers 55 and older (older Gen-X and Boomers) are planning their tours and activities according to historical norms. Most are booking experiences either in destination or before departure but after arranging the other components (see next slide).
Younger travelers, 18 to 54 (but primarily Gen-Z and millennials), are showing a dramatic shift in when they book experiences. More than seven in 10 say they are planning their tours and activities at the same time as or before they book transportation and accommodation.
Experiences will drive the future of trip planning
This shift is nothing short of remarkable and has significant implications for destination marketers, accommodation providers, travel agencies, OTAs and just about any organization involved in travel inspiration, planning and booking.
Younger travelers are putting experiences front and center. Things to do will increasingly be central to the destination decision and overall trip-planning. Travel brands and destinations that lead with experiences will be best positioned to win over the traveler of today – and especially tomorrow.
About the author...
Douglas Quinby is CEO of Arival
Arival and Phocuswright have partnered on a major global study of the travel experiences sector, The Outlook for Experiences: 2019-2025, covering tours, activities, attractions and events.