Since publishing one of our most read articles in 2017 on who buys more travel insurance, Millennials or Boomers, our industry has seen a significant shift in travel habits. Increased awareness of the risks of global travel disruptions like terrorism and natural disasters has made a big impact. Another key driver is the maturing of influential generational segments.
Let’s explore some of the major emerging travel trends and then see how these factors impact which travelers are most often protecting their trips.
One big trend is a shift to more domestic travel and fewer international trips, likely driven by the increased safety risks of traveling abroad. While Canada saw a 70 percent increase in American travelers in 2016, today travelers are planning more trips to U.S. destinations.1
Therefore U.S. destinations are experiencing increased competition, as more travelers are choosing to visit new places based on their major attractions. This has given rise to the increased popularity of road trips driven by the Boomer generation, leading to a new segment MMGY calls “Retired-on-Tires.” Like Boomers, Millennials are choosing to take more domestic trips, with a 9 percent jump in 2017.2
As Americans seek convenience in travel, another trend is a skyrocketing demand for river cruising. Millennials have joined Boomers in contributing to the rising interest in cruising.
For 2018, MMGY estimates travel spending will see flat growth. Our 2018 Vacation Confidence Index conducted by the research firm Ipsos mirrors their findings, yet summer vacation spending was expected to top $100 billion for the second consecutive year.3 Looking closer at the spending plateau by demographics, MMGY’s report shockingly reveals that travel spend is expected to decrease among all generations except Millennials with kids.
Millennial families, which comprise 15 percent of American travelers, are in fact the only demographic to report increased future travel spending in 2018, up eight percent. Meanwhile Gen Xers (ages 39-53) and Boomers (54-72) plan to spend three percent less this year. The often overlooked Mature generation (over 73) expects to spend an average of $5,644 on vacations this year—14 percent more than Millennials (18-38)—even though Matures’ average spending will drop by 11 percent.4 Our 2018 Vacation Confidence Index reveals which generations are most likely to spend more than their vacation budget.
Millennial families now make up half of the Millennial generation, with singles and couples each comprising about a quarter. Millennial families spent an average of $5,295 on vacations in 2017, which contributed $50 billion to the leisure travel market. Surprisingly, Millennials with kids are traveling and spending significantly more, as spending by couples and singles has and will likely continue to drop, according to MMGY’s study. In 2018 Millennial families say they’ll spend nearly 40 percent more than couples on vacation and 88 percent more than singles.5
Now let’s see who is leading the trend as demand for travel insurance grows. Matures show an incredible 14-point jump since last year in their intention to buy travel insurance, climbing to 39 percent. However in 2017, Millennials outpaced Matures with 30 percent having bought it. Factoring in their market size and Millennial families’ expectation to exceed Matures’ average annual vacation spending this year, Millennials remain the dominant generation protecting their trips today. Their intent to buy jumped 3 percentage points to 33 percent in 2018.6
More Boomers bought insurance than predicted last year, with 24 percent having bought it (up from 19 percent in 2015), which will see a modest two percent growth in 2018. Although Gen X’ers are least likely to insure their trip, they show a promising four-point increase in their intent, climbing to 18 percent in 2018.7
Consequently, travel organizations should be adapting their marketing efforts to reach Millennial families, a crucial, growing travel segment.
Terms, conditions and exclusions apply.
Insurance Insurance benefits underwritten by BCS Insurance Company (OH, Administrative Office: 2 Mid America Plaza, Suite 200, Oakbrook Terrace, IL 60181), rated “A-” (Excellent) by A.M. Best Co., under BCS Form No. 52.201 series or 52.401 series, or Jefferson Insurance Company (NY, Administrative Office: 9950 Mayland Drive, Richmond, VA 23233), rated “A+” (Superior) by A.M. Best Co., under Jefferson Form No. 101-C series or 101-P series, depending on your state of residence and plan chosen. Plans only available to U.S. residents and may not be available in all jurisdictions. Allianz Global Assistance and Allianz Travel Insurance are marks of AGA Service Company dba Allianz Global Assistance or its affiliates. Allianz Travel Insurance products are distributed by Allianz Global Assistance, the licensed producer and administrator of these plans and an affiliate of Jefferson Insurance Company. The insured shall not receive any special benefit or advantage due to the affiliation between AGA Service Company and Jefferson Insurance Company. Any Non-Insurance Assistance services purchased are provided through AGA Service Company. Except as expressly provided under your plan, you are responsible for charges you incur from third parties. Contact AGA Service Company at 800-284-8300 or 9950 Mayland Drive, Richmond, VA 23233 or email@example.com.
1. GTIM, Allied Market Research, October 2016
2. Portrait of American Travelers, MMGY Global, 2017
3. Vacation Confidence Index, Ipsos and Allianz Global Assistance, 2018
4-7. Portrait of American Travelers, MMGY Global, 2017
Eaglebytes offers you the latest news and trends for travel and specialty insurance, plus updates on our company. Sign up below to get the monthly newsletter.