Value-Seeking Millennials Turn To the Sharing Economy

Millennials planning to spend less on summer vacations this year, are more trusting of—and likely to use—the “sharing economy” for travel, according to a survey from Allianz Global Assistance USA.

The survey, the sixth annual Allianz Travel Insurance Vacation Confidence Index, was based on a national representative sample of 1,000 U.S. adults who were polled last month. Allianz Global is an insurance company with a specialty in travel.

Americans are generally more confident that they will be taking a vacation this summer, but they will be spending less overall on their summer vacations with the culprit being millennials turning to less expensive “sharing economy” alternatives like Airbnb, Uber and Home Away, according to the survey.

Americans will spend $85.5 billion on summer vacations in 2015, down 13.5% from $98.8 billion in 2014. Millennials, aged 18 to 34, the most confident of any age group in taking a summer vacation (50.5%), are leading the decline.

Nearly 40% of millennials plan to spend less than $400 on summer travel; double all other age groups combined.

Daniel Durazo, spokesman for Allianz Global Assistance USA, said, “This year we asked about the sharing economy for the first time and were surprised to find that 19% of Americans planned to spend less than $400 on their summer vacations against 13% last year – and that is attributable in large part to the use of the ‘sharing economy’ by millennials.”  

The tipping point
“Millennials are using shared economy services like Airbnb, Home Away and Uber to drive down vacation costs,” said Durazo. “And travelers are now more aware of and more confident in using them.

“A majority of millennials trust the sharing economy, compared to only 37% of all other travelers,” he said.

“What’s interesting about our responses is that if you combine the numbers for those who think shared economy services are better than traditional services and those who think they are both the same – the majority see shared economy services as the same or superior – and that’s a tipping point.”

While only 47% of Americans are aware of at least one of these sharing economy services, more than 58% of millennials are aware of the non-traditional forms of booking accommodations, transportation, and experiences.

And while only 17% of Americans said they’re likely to use a sharing economy service during their summer vacation this year, 28% of young adults under the age of 35 are planning to book their travel in these non-traditional ways.

Good news for travel industry
Still,  the high degree of confidence that American will take vacations is “great for the travel industry,” Durazo said.

The survey showed an easing in the country’s “vacation deficit”—the percentage of Americans who think a vacation is important but are not confident they’ll be able to take one.

In 2015, 19% said they are “not confident” they’ll take a vacation, down from 21% last year and 24% in 2013.

Millennials are the most confident of any age group that they will take a summer vacation this year (50.5%). Nearly 40% of millennials plan to spend less than $400 on summer travel, double all other age groups combined.