Marketers miss wanderlust of demo

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Today's university students will fill tomorrow's first-class seats, and travel marketers that leverage the opportunity will be well-served, experts say.

Hit hard by a post-9/11 downturn that sent air fares to 20-year lows, many major carriers steered their reduced marketing dollars toward high-yield business-class travelers, while including youth within overall marketing strategies. But a rebound is taking shape, according to the Travel Industry Association of America, with the first gains in business travel since 1999. Now some in the industry are starting to realize the increasing importance of the youth traveler.

Beyond the annual travel blowout of spring break, marketers would be wise to pay attention to the remaining 51 weeks of the year.

Generations X and Y comprise 26% of total travel volume, according to TIA. About 58% of the 16 million U.S. college students have traveled within the past year, spending $2.6 billion on air fare and cruise tickets alone, according to the 360 Youth College Explorer survey conducted by Harris Interactive. 360 Youth is a marketing services unit of Alloy.

`seeds future business'

"Youth travel is important not only because of the economic impact it makes today, but because it seeds future business," says Michael Palmer, executive director of the Student & Youth Travel Association of North America. "If you're marketing to someone with 60 more years of travel in front of them, you have the opportunity to impact a lot of future business."

Mr. Palmer's group found that trips taken by people under age 26 increased 5%-9% last year, and the organization projects an increase of 10%-14% in 2004. This outpaces TIA's estimated growth for the entire leisure and business travel market of 1.2% in 2003 and 3.6% in 2004.

Look past the stereotype of the carefree, free-spending young traveler. Value is key. To expand their presence with students, more than 25 major air carriers, as well as Web sites such as Travelocity and Orbitz, have partnered with The Web site, which sells low-cost airline seats that would otherwise go empty, attracts nearly 250,000 discount-hungry students from 3,500 college campuses annually.

"The mistake many airline marketers make is by focusing on the fact that, in the short term, students are a low-yield business," says Bart Littlefield, senior VP at StudentUniverse. "In the long term, that demographic becomes very profitable."

Marketers that add experience into the value mix have a winning combination. "Kids are making decisions based on experience," says Tina Wells, managing director of youth consultancy Blue Fusion. "Part of their marketing plan has to be the question, `What kind of experience am I offering these people with my product?' "

For Backpackers Xpress, a new low-cost airline, the experience includes revelry in the sky. When it launches in the second half of 2004, the carrier hopes to snag a share of the nearly 500,000 backpackers who travel from the U.K. and Europe to Australia by providing an in-flight party. The smiley face logo on the company's two Boeing 747-400s is just the start: In lieu of high-end amenities, a trip on a Backpackers Xpress "Funjet" includes trivia competitions, karaoke and a pub/cafe.

"What we're looking to do," says Don Norton, group operations director-media and communications, "is create something more than `Here's a seat to sit in for 24 hours while we fly into Australia.' "

Once the planes touch down, Backpackers Xpress Group will provide a range of "Fun Services," including accommodations (Funbeds), cellular phones (Funfones) and insurance (Funcover).

In addition to media buys in backpacker magazines, the company will visit U.K. campuses in Backpackers Xpress double-decker buses. Advertising will be handled in-house.

Gen X and Y were exposed to travel at an earlier age than previous generations and, as a result, are more sophisticated and expect more than a "been there/done that" sightseeing tour, Mr. Palmer says, adding, "It's not about just visiting a nice aquarium anymore. It's about swimming with the dolphins."

Contiki Holidays has leveraged this trend with tours that immerse travelers in a culture. The company takes 100,000 18-to-35-year-olds off the beaten track every year with tours such as "Egypt & the Nile" and "Pubs & Country Roads of Ireland."

"This generation has grown up on the Internet," says Lisa Wooldridge, VP-marketing. "They don't see the world as full of boundaries." The trick is understanding that this group prefers to hear about products through their peers, she says.

college papers used

Contiki puts the college newspaper to use as a guerrilla venue, asking students to take free trips and write articles in their school papers.

"We're creating tools that allow Contiki passengers to become our advertising," says Ms. Wooldridge. "They're the best advertising I could ask for."

In addition, Contiki has partnered with Viacom-owned MTV, hosting cast members of the cable network's "Real World" on two Contiki tours; footage from the tours aired on episodes of "Real World" in 2001 and 2003.

"I don't think the travel industry is doing enough to target this segment right now," says Frank Marini, president of Contiki Holidays. "This market is so much more than [the perception of cheap tickets and spring break] ... [It's] the future of the travel industry."

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