While the sharing economy has been a favorite topic of every hotel conference over the past few years, recent research suggests its popularity might be waning among travelers, especially in the millennial set. That can mean good news for hoteliers who are looking to capture more business.
According to the most recent Allianz Travel Insurance Sharing Economy Index from Allianz Global Assistance, 53 percent of Americans said they are either not very likely or not at all likely to use sharing-economy services during their 2018 summer travels. That sentiment is despite the fact that Americans believe the sharing economy offers a more authentic and local experience as well as a better value for their money, according to the report.
This year, American travelers are more in favor of traditional services, such as hotels, rating them as superior to the sharing economy because they offer better product, booking experiences and customer support when things go wrong, according to the research.
Comparison of Americans’ Preference of Service for Better Experience - 2018
|
|
Sharing Economy Services |
Traditional Services |
Both the same |
|
Better quality product |
12% |
33% |
35% |
|
More authentic local experience |
27% |
22% |
31% |
|
Better value for money |
32% |
20% |
27% |
|
Better booking experience |
13% |
35% |
33% |
|
Better customer support when things go wrong |
10% |
44% |
27% |
|
Best overall experience |
14% |
29% |
34% |
Source: Allianz Travel Insurance Sharing Economy Index, Allianz Global Assistance
Meanwhile, recent data from MMGY Global’s "2018-2019 Portrait of American Travelers" study shows that 75 percent of current home-sharing travelers intend to use home-sharing again on vacation during the next 12 months. While that might seem like a high percentage, researchers note that figure has declined from previous years, when in 2017 86 percent said they would use the sharing economy and 90 percent said the same in 2016.
Millennials Go Traditional
However, data are showing that millennials, once thought of as the target audience for the sharing economy, are perhaps shifting their favor to traditional services.
According to the Allianz research, one-third of millennials surveyed said that traditional services provide the best overall experiences. That figure is up from 2017’s 22 percent. Additionally, millennials believe that traditional services offer better customer support (38 percent), and 26 percent of millennials said traditional product was of better quality.
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“This is the first time we’ve seen intent to use sharing economy services decline, particularly among millennials, which is surprising as they led its early adoption,” said Daniel Durazo, director of communications at Allianz Global Assistance. “Millennials appreciate the value and authentic local experiences that are offered by sharing economy services, while they also like the product and overall experience offered by traditional services. Travel suppliers vying for the millennial market this year should capitalize on their strengths and try to shore up their weaknesses.”
MMGY Global’s data show that almost half of sharing-economy users aren’t millennials (41 percent). The median age of sharing-economy travelers is 40 years old.
So, what does this mean for hoteliers? It’s time to capitalize, according to MMGY, especially when it comes to marketing to millennials and their families. While all other generations in MMGY’s data set indicated that their travel spending would be flat or less over the coming years, millennials indicated an increase. The cohort also reported the smallest decrease in vacation intentions (3 percent) out of any generation.
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Additionally, millennials' families reported that they intend to spend more on vacations in the coming year than they did last year. Families are the largest segment of the millennial generation, and each household in the set said they intend to spend significantly more on leisure travel than single millennials. That’s why millennials are a bright spot in an otherwise flat travel market, according to MMGY.
“In past years, millennial families have been more dominant in travel spending, remaining the highest performing segment of this generation due to both their numbers and intent to increase travel spending,” Steve Cohen, senior VP of travel insights at MMGY Global, said in a news release. “These nearly 10 million households have sufficient size and purchasing power to make a positive impact on both destination visitation counts and travel service provider bottom lines. If this segment works with your travel offerings and market position, MMGY Global recommends actively marketing through strategic, targeted campaigns.”