APEX Insight: Business travelers have long formed the bedrock of premium air travel, but what happens when their habits change?
Social scientists coined the term “generation gap” in the 1960s; little did they know that ideological rifts would become even more prevalent in the 21st century. The stereotype of the slick, indomitable business executive who stays in a city only as long as it takes to seal the deal has been steadily replaced by the offbeat millennial who’ll do anything to snag a business trip – with some extra vacation days tacked on.
A recent study by MMGY Global found that millennials reported taking on average 7.7 business trips in the past year, compared with the 6.4 taken by Generation Xers and 6.3 by baby boomers. And the younger demographic only anticipates this figure will rise. Will the growth of what many are calling “the cheapest generation” bode well for an industry already facing slim profit margins?
Millennials may appear tightfisted, but that’s only because they’re spending their money differently from their predecessors. Numerous studies of this demographic’s money habits arrive at the same two conclusions: Millennials prize value over cost, and experience over material things. Business travelers of the generation are 60 percent more likely to purchase ancillaries, like extra legroom and in-flight Wi-Fi, compared with non-millennials, reports the Boston Consulting Group. And that’s likely because they prefer having the option to choose the perks that are of value to them – even when they aren’t footing the bill.
“LCCs are definitely benefiting from the increase of millennial business travelers.” — Leslie Thng, Scoot
Flexible booking options and a wide array of add-ons make low-cost carriers (LCCs) a favorite among the growing number of millennial business travelers. “LCCs are definitely benefiting from the increase of millennial business travelers,” says Leslie Thng, chief commercial officer of Singapore-based LCC Scoot. “Our product is one that allows our guests to customize their travel experience, from having it completely no frills to enjoying various products and services not unlike those offered on full-service carriers.”
But freedom of choice and onboard comfort are only half the battle. What LCCs like Scoot, JetBlue and WOW air all have in common are strong, cohesive brand stories. “Our branding centers heavily on social media and has been known to be quirky, irreverent and at times cheeky,” Thng says. “Scootitude” isn’t just a hollow marketing scheme; it’s embodied by customer-facing cabin crew and airline agents who’ve thrown Halloween celebrations, hosted a wedding on board and, most recently, promoted Scoot’s “Strip for a Trip” campaign, asking passersby in Melbourne to dress in Grecian garb for a chance to win a flight on the airline’s first transatlantic route. JetBlue strikes a similar chord with its socially progressive brand image. In the past year, the airline has acknowledged the hard work of New York City buskers by offering them one year in free travel and has rewritten the crying baby script with a feel-good campaign that offered passengers discounted flights at the sound of every wail.
Firmly established in the millennial market at large, JetBlue and Scoot have both made the move away from the all-coach offerings of most LCCs to target the segment of young professionals. According to JetBlue’s website, the airline’s Mint cabin offers premium service “minus the stuffiness often associated with the front-of-the-cabin experience,” and retains that personal touch with a rotating tapas menu, pre-departure drinks and fully customizable lie-flat seats. Meanwhile, Scoot offers ScootBiz and ScootinSilence, both of which Thng says may be of interest to the millennial business traveler.
But perhaps the most important commodity to a generation hooked to their tech is onboard broadband, and the airlines renowned for their millennial appeal are dominating in this category. According to Routehappy’s Annual Global State of In-Flight Wi-Fi 2016, Scoot leads in fleet-wide connectivity with Wi-Fi on 100 percent of its flights, followed closely by Virgin America and Icelandair. “Millennial passengers are more interested in in-flight connectivity and entertainment services,” says Phil Penuela, director of Global Insights at Gogo. “According to our recent global traveler study, 68 percent of millennial passengers are extremely or very interested in using in-flight Wi-Fi on their next flight, compared to 47 percent of non-millennials.”
“Millennial passengers are more interested in in-flight connectivity and entertainment services.” — Phil Penuela, Gogo
Even if Wi-Fi isn’t being used for business matters, millennials’ inveterate attachment to devices and fear of missing out on what’s going on in the world – and on the Twittersphere – mean they are more likely to keep plugged in during long-haul flights, and Internet service providers are becoming increasingly attuned to this habit. “If millennials become a specific target of our airline partners, we can shift product offerings to meet those needs,” Penuela says.
Believing in Bleisure
If value and experience are what millennials crave in the air, it’s no surprise that they’d pursue the same on the ground. The result: the careful blending of business and leisure travel, commonly referred to as “bleisure.” According to Hipmunk’s Third Annual Travel Habits Study, millennials are twice as likely to add extra days to a business trip compared with their parents, making them likely candidates for the layover programs offered by Finnair, TAP Portugal, Turkish Airlines and others.
Icelandair, which has been pioneering the layover vacation since the 1960s, runs a Stopover Buddy Service, offering flyers an authentic, personalized experience either before or after their final destination. Its customers can spend up to seven days in the country with the layover scheme, at no additional cost, and request an Icelandair employee – even the CEO – to be a buddy and show them around. And until March 31, 2017, buddies will help Icelandair travelers commemorate a birthday or other special event while away from home, as part of the airline’s new Celebration Stopover Buddy Service.
Allocating extra days of leisure travel to a business trip may seem costly to employers, but by 2025, when millennials are expected to make up three-quarters of the workforce worldwide, bleisure will be the norm. Companies will have no choice but to get accustomed to negotiating in a new currency: experience.
“The Millennial Business Traveler” was originally published in the 7.1 February/March issue of APEX Experience magazine.