A Changing Vacation Climate
By Andy Christian Castillo
The “Vacation Deficit” has lifted: More Americans are confident that they’ll take a vacation in 2015, then there were in 2014.
While the financial effects of the recession never reached wealthy travelers, most middle and lower class vacation goers suffered huge financial setbacks. Consumers curbed their spending; and fancy, unnecessary vacations were the first victims on the frugality chopping block.
As a result, the millennial vacationer’s landscape drastically changed: new, hybrid, community based amenities emerged in an otherwise hotel-dominated market. Unique businesses like AirBnB provided alternative lodging options to a financially struggling middle and lower class. In the process, they raised the bar of travel expectations substantially.
A Changing Economic Tide
The economic tide is finally changing after its turbulent roller-coaster-ride: 2014 was the best year for (USA) job growth in 15 years – unemployment is on the decline. As the American economy stabilizes, the mindset of its people has begun to shift back toward the pre-recession skies of leisure. Vacation-starved millennials aged 18 to 34, are packing into the family van and heading out on trips they’ve been putting off for years.
According to this year’s Vacation Confidence survey by Allianz Travel Insurance, the majority of Americans think an annual vacation is important. A little over half of them are confident they’ll take one this year; about a third don’t think they’ll go, 10% said they’ve already gone, and 3% simply aren’t sure – that’s an improvement over last year by a few notches.
In short, vacation confidence in the United States is on the rise.
But just because more people are itching for clear waters and white sand to sink their parched toes into, doesn’t mean they’ll spend a lot of money to get there. On the contrary; the planned budget has declined since 2014, because millennials travel frugally.
Cutting Vacation Costs & A Changing Travel Landscape
Consumers are cutting costs by searching for vacation deals – they’re going the extra mile to find sweet offers, which give a better bang for their buck. The survey predicts that Americans will spend about $13.5 million less on getaways in 2015, then they did last year.
“More travelers are looking to save money on their summer vacations this year,” said Mike Nelson, CEO of Allianz Global Assistance USA. The survey went on to say “that consumers are eager to save money on their summer travel and will be looking for trips that offer the best possible value.” With the recent surge in community-based, online-marketplace lodging, consumers can cut costs without sacrificing comfort.
They provide a unique community-driven landscape, within an otherwise traversed environment; American millennials value fresh and modern ideas, over traditional and established amenities. Further, social media and online apps make travel incredibly accessible; booking a full travel itinerary through a business like AirBnB is literally a finger-swipe away.
But more than that, millenials are exiting the recession with a cost-saving mentality: they’re looking for cheap alternatives to trot the globe and get away from everyday life.
Another survey by Allianz Travel Insurance shows that millennials are more trusting of businesses such as Home Away and AirBnB, then their older contemporaries are. According to the study, 60% of millennials trust modern travel amenities, as compared to only 37% of other travelers.
“The travel industry needs to respond with value-focused offerings,” said Nelson; he also mentioned that the righttravel insurance might be a good way for millennials to save money in the long run.
Because community driven services are relatively new, it might be a good idea for millennials to protect themselves with travel insurance.
“With Americans focused on making the most of their travel investment, one way to potentially save money is with travel insurance,” he said: “The righttravel insurance policy will protect a consumer’s pre-paid travel expenses when they have to cancel their trip due to certain unexpected circumstances such as a covered illness or injury and will provide reimbursements for things like medical emergencies, delayed travel and lost baggage.”
Gone are the days of lavish vacations by middle and lower class Americans. Today, vacationers are traveling more; but they’re also traveling smarter, better and cheaper. In order to stay afloat in the changing tide of the middle-class driven market, businesses are going to have to put their best foot forward and offer top-notch provisions at reasonable prices.
This article was sponsored by Allianz but the opinions are the author’s own.
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