Understanding millennial travel behavior and OTA business strategies
Image source: Shuttterstock/raditya)
Hike to the top of Padar Island before sunrise and you will see panoramic views of the vast blue sea, surrounded by little islands. Swim and look out for manta rays, sea turtles and colorful fish in some of the best diving sites in Labuan Bajo. Take selfies with a Komodo dragon, the world’s largest lizard. Guess which country you could possibly be in, doing all those enjoyable activities? The answer is Indonesia.
With over 17,000 islands, Indonesia has many destinations worth exploring. Besides Labuan Bajo in East Nusa Tenggara (NTT), the country has other super-priority tourism destinations, namely Likupang in North Sulawesi, Mandalika in West Nusa Tenggara (NTB), Borobudur temple in Central Java and Lake Toba in North Sumatra.
In recent years, we believe that the government has done many things to support tourism, such as by improving infrastructure in the regions, building more airports and improving accessibility. As a result, around 15 million tourists came to Indonesia from January to November 2019, up by 3.5 percent year-on-year (yoy) based on a report by Statistics Indonesia (BPS).
The future of the Indonesian tourist industry is bright. We see huge demand from international and local tourists who want to travel to the country. We have also observed the increasing number of Indonesians who travel overseas. Without a doubt, now is a great time for online travel agencies (OTAs) to find creative ways to serve a large proportion of the consumer market: the millennials.
How to create products and services that answer the needs and wants of millennials? First, let’s learn more about who the millennials are. According to the Indonesia Millennial Report 2020 recently released by IDN Research Institute, in collaboration with Nielsen Indonesia, there are seven different types of millennials. They are the adventurer, the artist, the visionary, the leader, the socializer, the conservative and the collaborator. The study defined millennials as male and female between the ages of 21 and 36 in 2020.
Understanding the consumer behavior of millennials is crucial for OTAs. For instance, some millennials look for products that can give them functional values at an affordable price. Others care more about the story behind the products. If they love the story, they will buy the product. Also, many young people care about social image. They will purchase products or services that are “hyped”, as doing so can create a positive social image.
For many millennials, traveling is a need. For them, it is important to travel the world and visit new places they have never been to. By visiting new places, they will gain more knowledge about the destinations and meet new friends along the way.
As they are highly mobile, millennials often search for information about new hidden places to explore online. They can spend a few hours straight surfing the internet, primarily by using their mobile phones.
With this behavior in mind, many OTAs are revamping their strategies to target younger customers. One of them is by providing travel inspirations and ideas about the things people can see and do in many tourist destinations around the world on their apps.
Another important strategy is to continually enhance the user experience on apps. OTAs need to make sure customers can use their apps seamlessly to book hotels, flights and train and other tickets depending on their budget. Application usability and product affordability are the keys to winning the hearts of the millennials.
Through an OTA like Tiket.com, customers can easily find beautiful and comfortable hotels in secluded or remote places that often go unrated. They can also book tours and packages to discover hidden and nonmainstream destinations. This is what some millennials love to do: visit Instagrammable places and spice up their social media feeds!
Some millennials are entrepreneurs, some work in offices. Sometimes, even though they have planned their vacation well, there are times when they need to cancel their flights due to unforeseen circumstances. Therefore, OTAs must provide useful features to solve their problems. To attract millennials, OTAs must deliver comfort by continuously improving products and services, online and offline.
With the current demographic bonus, we believe that tourism will continue to shine in the future. Indonesia is expected to have a large working age group, about 70 percent of the total population by 2030. Thus, we are confident that OTA bookings will continue to rise in Indonesia, partly contributed by rising consumer spending from this demographic dividend.