Millennials are reaching their prime working and spending years. As the largest population in U.S. history, they have the ability to significantly alter the buying power of the U.S. economy.
But Millennials operate a little differently than their Boomer and Gen X predecessors did at their age. They’re logged on and tuned in; searching, sharing and listening to travel recommendations from their peers. Brands must understand they seek access, not ownership. They prioritize experiences over possessions. It’s these attitudes, values (and use of technology) that have helped spawn a global “sharing economy.”
This peer-to-peer way of doing business is changing the way consumers buy products and services. In the travel sector, two areas are being disrupted most.
Millennials are embracing ride-sharing services like Uber and Lyft. Beyond just getting around at home, they’re also using ride-sharing services when traveling, largely in place of traditional means like taxis and mass transit.
To what end? Consider five-year-old Uber. The ride-sharing service operates in more than 270 cities and more than 60 countries worldwide. As of August 2016, the company was valued at $68 billion…a number that exceeds the market capitalization of companies like Delta Air Lines, American Airlines and United Airlines. It’s safe to say this new way of getting around is here to stay.
Millennials’ lodging preferences are also shifting the travel industry. They’re booking with Airbnb in place of more traditional accommodations like hotels. They’re looking to truly experience the life and culture of the places they travel – Airbnb is providing it, and at a lower cost. Boomers are also booking vacations in shared spaces like beach houses (though they’re less likely to stay in a spare bedroom and share a space with the property owner). As Generation X starts to retire, they’ll start traveling more, opening the sharing economy to yet another segment of the population.
How much of an impact do their lodging preferences really have? Well, Airbnb averages 425,000 guests per night. That’s more than 155 million stays each year, nearly 22 percent more than Hilton Worldwide, according to Pricewaterhouse Coopers (PwC).
While Millennials have certainly led the charge, nowadays, they’re not the only group that’s a proponent of the sharing economy. In fact, 57 percent of adults agree that access is the new ownership according to one PwC study. To grasp the scale of disruption, consider one last statistic: PwC’s projections show that five key sharing sectors (travel, car sharing, finance, staffing and music/video streaming) have the potential to increase global revenues from roughly $15 billion today to around $335 billion by 2025.
Look for ways your brand can take advantage of the sharing economy. Consider partnerships with leading brands like Uber, HomeAway or Task Rabbit. Or take cues from their successes and find ways to incorporate sharing into your business model.