Travel spend behaviours that will redefine your customer strategies
In our previous blog, we explored some of the most common challenges that have arisen in the travel sector in 2023 and how you can leverage digital marketing and personalisation to tackle them.
In an era where the Cost of Living is placing pressure on consumers’ budgets, the significance of precise, targeted marketing and aligned messaging cannot be overstated. Moving towards the end of the year and the holiday-booking surge that happens in January, marketers will need to be aware of timely shifts in behaviour and expectations to capitalise on customer intent at the right times.
Through our recent Cost of Living consumer survey, we have identified important shifts in travel spending habits that will influence the January booking window, and have pinpointed the demographic groups experiencing the most significant adjustments:
- Travellers are more frugal than they were, but still want the best experience they can afford
- Travellers will spend more time than usual researching to try and find the best the value options
- Travellers may be more sceptical about convenient booking options and package deals still offering the best available value
- Solo travellers, travellers without children and families are all being hit differently, and will therefore have different needs and expectations when it comes to researching and booking.
Despite these shifts, there are still plenty of opportunities for travel businesses to keep customers interested in going away. Below we have detailed some of the tactics that can help:
Consumers’ travel spending will continue—with exceptions
Many travellers may have set expectations in their minds around what a ‘good trip’ looks like, such as having to be a certain distance away or for a minimum number of days. Our findings concluded that despite the ongoing Cost of Living crisis, holidays remain a priority for consumers of all ages, and they are determined to find ways to make them happen.
In fact, 57% of consumers surveyed have or will be making changes to their holiday habits to save money and get more for their money.
Respondents expect to cut their expenditure on their next holiday, with 45% saying they will either find a cheaper destination, travel option, accommodation, do fewer activities or simply reduce their trip length. Which means that they will most likely spend more time researching their holidays and trips. Equally, this may affect the package holiday market as consumers compose their own holidays by booking their own flights, hotels and transfers.
The most affluent Acorn demographic groups expect to cut their holiday expenditure in this way more than other groups, as do millennials and Gen Z respondents. 22% of respondents are also taking fewer breaks compared to previous years.
To continue to encourage travellers to go away, travel businesses will need to shift the focus from larger packages and holidays and instead start spotlighting the benefits of closer destinations and shorter trips or weekend getaways. Their focus language will need to be around ‘doing more with less’ to ensure travellers continue to see the value in getting away no matter the length of holiday. Travel businesses can promote this throughout the year as well, as shorter breaks are far more flexible and can happen at any time.
Gen Z are spending the least on travel this year
Younger holidaymakers—particularly Gen Z— appear to want to spend as little as possible to keep travelling this year.
When it comes to cheaper destinations and accommodation, more than 1 in 5 respondents of younger age groups have opted for these. Younger men surveyed are particularly determined to continue to take breaks as they have before. Just 14% of Gen Z men expect to take fewer breaks compared with previous years, yet that rate more than doubles among Gen Z women, 29% of whom reported that expectation.
To combat this, travel businesses that speak directly to traveller concerns around value will build their trust in the options they’re being presented with. For travellers that are wary of costs and will expect to be researching for longer periods of time to seek the best value, curated options and direct, value-based messaging will help to make their concerns feel acknowledged and will offer a faster and more convenient option for them to browse.
Family holidays are being cut…
Respondents that have children appear to be affected to a greater extent than those without. The appeal of cheaper destinations rises from 14% among those without children to 24% among those with under 18s in their household. Bearing this in mind, more price-sensitive families can be a stronger focus for value-based messaging and cheaper travel options from travel businesses.
…while solo travellers are on the rise
The results show that independently living, single travellers are taking the most advantage of getting away on holiday this year. In fact, rates of those cutting back on holiday expenditure are nearly 1/3 lower among those who live alone. This includes reducing spend in other areas to make room for travel and shortening the length of trips compared to previous years. To maintain interest across all pricing options, travel businesses should target more expensive and premium options towards solo and non-children couples.
How can CACI help?
As a trusted partner to major brands within the travel industry, our team is highly experienced in supporting strategic targeting by leveraging the necessary data and technology to understand customers and their behaviours as innately as possible and being able to design marketing strategies to target these groups.
CACI partners with global brands to harness and enhance customer data, enabling them to identify and prioritise the most valuable customers. Insights are then activated through strategic CRM initiatives and acquisition strategies, ensuring targeting is precise and relevant. This approach is pivotal for brands seeking to align their products with consumer needs and foster long-lasting brand loyalty, repeat bookings and maximising share of wallet.
To find out how we can support your business strategies or operations by enhancing your customer understanding, or to find out more about the products and services we offer, please get in touch.
Read blog 1 from our travel series: Travel sector hurdles and the promise of digital marketing and personalisation