millennial guests at a hotel illustrating that travel is still a priority especially for younger generations

What sorts of journeys do today’s travelers dream about? Where would they like to go? What do they hope to do when they get there? How much are they willing to spend on it all? And what should industry stakeholders do to adapt to the traveler psychology of the moment?

NB: This is an article from McKinsey & Co.

Subscribe to our weekly newsletter and stay up to date

To gauge what’s on the minds of current-day travelers, we surveyed more than 5,000 of them in February and March of this year. Our universe of respondents included travelers from five major, representative source markets: China, Germany, the United Arab Emirates, the United Kingdom, and the United States. All respondents took at least one leisure trip in the past two years. We asked them more than 50 questions about their motivations, behavior, and expectations.

Results from this survey, supplemented with findings from focus groups and other additional research, suggest six vital trends that are shaping traveler sentiment now.

Travel has become a top priority, especially for younger generations

Sixty-six percent of the travelers we surveyed say they’re more interested in travel now than they were before the COVID-19 pandemic. This pattern holds across all surveyed age groups and nationalities. Respondents also indicate that they’re planning more trips in 2024 than they did in 2023.

Travel isn’t merely an interest these days. It’s become a priority—even amid uncertain economic conditions that can make budgeting a challenge. Travel continues to be one of the fastest-growing consumer spending areas, rising 6 percent over a recent 12-month period in the United States, even when adjusted for inflation. Only 15 percent of our survey respondents say they’re trying to save money by reducing the number of trips they go on. And in the February 2024 McKinsey ConsumerWise Global Sentiment Survey of more than 4,000 participants, 33 percent of consumers said they planned to splurge on travel, ranking it the third-most-popular splurge category—trailing only eating at home and eating out at restaurants.

Younger generations appear to propel much of the rising interest in travel (Exhibit 1). In 2023, millennials and Gen Zers took, on average, nearly five trips, versus less than four for Gen Xers and baby boomers. Millennials and Gen Zers also say they devote, on average, 29 percent of their incomes to travel, compared with 26 percent for Gen Zers and 25 percent for baby boomers.

Exhibit 1

Younger generations show significant, growing interest in travel.

Younger travelers are the most keen to venture abroad

Younger travelers are particularly excited about international travel. Gen Zers and millennials who responded to our survey are planning a nearly equal number of international and domestic trips in 2024, no matter their country of origin, whereas older generations are planning to take roughly twice as many domestic trips (Exhibit 2).

Exhibit 2

Younger generations take nearly as many international trips as domestic trips.

Younger travelers’ thirst for novelty might be motivating their urge to cross borders. Gen Zers say their number-one consideration when selecting a destination is their desire to experience someplace new. For Gen Xers, visiting a new place comes in at number eight, behind factors such as cost, ease of getting around, and quality of accommodation.

There might be a mindset shift under way, with international travel feeling more within reach for younger travelers—in terms of both cost and convenience. Younger travelers have become adept at spotting international destinations that feature more affordable prices or comparatively weak currencies. Low-cost airlines have proliferated, carrying 35 percent of the world’s booked seats over a recent 12-month period. Meanwhile, translation software is lowering language barriers, mobile connectivity overseas is becoming cheaper and more hassle free, and recent visa initiatives in various regions have made passport-related obstacles easier to overcome.

It remains to be seen whether this mindset shift will endure as younger generations get older. But early evidence from millennials suggests that they’ve retained their interest in international travel even as they’ve begun to age and form families. It could be that this is a lasting attitude adjustment, influenced as much by the changing dynamics of travel as it is by youth.

Read the full article at McKinsey & Co.