Traveling with Millennials

Traveling with Millennials

          
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Traveling with Millennials

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    Millennial Business Travelers

    Millennials who fly for business report significantly more generational diversity than non-Millennial business travelers: Millennial business fliers include 60 percent more Hispanics than, twice as many Asian Americans as, and 40 percent more women than non-Millennial business fliers. Millennials and non-Millennials are at different stages of their professional careers, and their business travel reflects this. Most Millennials are building their careers, whereas non-Millennials are at their professional peak or slowing down in anticipation of retirement. It’s not surprising, then, that Millennials fly more for conferences, training, recruiting, and other one-off reasons related to career development, while non-Millennials travel more to visit clients, work at client sites, or develop client relationships.

    Among non-Millennials, 45 percent report taking four or more business flights annually, compared with only 28 percent of Millennials. A small subgroup of Millennials fly internationally for business more than three times per year. Although Millennials travel less for business overall, they report spending about the same amount on total business flights per year as non-Millennial business fliers. That’s because they do more international travel, buy more refundable nonupgradable tickets, book their tickets later, and tend to make more itinerary changes per business trip than non-Millennials. Millennial business fliers are 60 percent more likely to upgrade for extra legroom and are far more open to paying more for roomier seats, more headroom, and in-flight entertainment, and to buying frequent-flier points or miles than non-Millennials. As a result, Millennials report paying on average 13 percent more per airline ticket than the average non-Millennial business flier.

    Millennial business fliers want different things from loyalty programs than do non-Millennials or Millennials who fly primarily for leisure. And the difference has clear implications for the strategies and tactics of airline loyalty programs. Millennials report more dissatisfaction with frequent-flier benefits such as miles, elite status, and rewards—and, especially, with how quickly points or miles expire: Millennials would rather use loyalty programs to earn free or discounted travel than to improve the travel experience with upgrades. Thus, while not the payment method of choice, cashing in miles or points on airline tickets is much more prevalent among Millennials than non-Millennials. Millennials also report greater willingness to switch from one airline program to another if they can get the same elite status, if they perceive the other frequent-flier program as more valuable, or if they think the other airline has a superior network of global partners. That said, because of their age and life stage, Millennials are far less likely than non-Millennials to use airline loyalty programs or credit cards today.

    Our research revealed differences between the airlines that Millennials prefer and the frequency with which they actually book flights with them. For instance, Millennials tell us they prefer JetBlue Airways far more than they actually fly it, partially due to the availability of flights and destinations. The same holds true for Southwest Airlines for business flights, but to a lesser extent. Millennials traveling for business report using more airport amenities than non-Millennials—particularly Internet connections, charging stations, food and retail stores, and in-airport services such as ATMs. They also tend to make less use of newsstands. Onboard, they are four times more likely to pay for Wi-Fi, twice as likely to watch downloads on their mobile devices, and 60 percent more likely to watch in-flight entertainment.

    Millennial business travelers are more apt to add on one more leisure trip per year than the average business traveler who also flies for leisure—a behavioral aspect of this group that could hold cross-promotional, loyalty reward, and comarketing potential for travel and tourism companies. And Millennials express more interest in traveling internationally—trips that are important to airlines from a profitability standpoint. Millennial business travelers are also more interested in group discounts (presumably for leisure travel), discounted leisure travel, airline packages, and low-cost carriers than are non-Millennials. This is not surprising, given Millennials’ age and financial constraints.

    Airlines struggle today to consistently recognize loyal, highly profitable business travelers who are traveling for leisure in the main cabin—either alone or with their families—and to provide them with a meaningfully differentiated experience.