The good news is summer travel is up this year—but the bad news for the travel industry— is that millennials are looking for dirt cheap deals.
“Summer travel will actually increase by one half of a percent in 2015. We’re not seeing a decline in travel, we’re seeing a decline in the amount of money someone intends to spend while traveling,” says Dan Durazo of Allianz Global Assistance, a leading travel insurance company.
According to Allianz, Americans will spend $85.5 billion on summer vacations this year—down 13.5% from $98.8 billion in 2014. The decline is being driven by--you guessed it—millennials.
Almost 40% of them are planning to spend less than $400 on summer travel.
How? They are relying on non-traditional travel services like Airbnb, Uber, Lyft, GetAround, and Feastly.
“Millennials are very comfortable using the apps and mobile technologies that many of these sharing economy services are based on. That, combined with the money they’re able to save, is a more attractive value and experience proposition than other established methods,” says Durazo.
The new survey says 60% of 18-to-34-year-olds trust the sharing economy services, compared to only 37% of all other travelers.
“I think we’ve reached a tipping point for the sharing economy both among travelers in general, but especially among millennials,” says Durazo. But he adds that the majority of travelers ages of 35 to 54, and 55 and above are still unaware of these sharing economy services. “We’ve also found that travelers with a high school degree or some college are significantly less aware and trusting of sharing economy services.”
Only 47% of Americans are aware of at least one of these sharing economy services and overall 17% of them say that they’re likely to use a sharing economy service for their summer getaway.
But there is some good news for the travel industry.
“We’ve also seen an easing in the vacation deficit, which means that the more people who think taking a vacation is important, believe that they’re going to be able to take one,” says Durazo.