Gen Z vs. Millennials: Which One's the Better Age Group to Target for Your Short-term Rental?

Gen Z vs. Millennials: Which One’s the Better Age Group to Target for Your Short-term Rental?

With more and more people traveling again and booking holiday trips for the year ahead, now is the best time to make sure you’re marketing your property to the right customers. Which will it be, Gen Z vs. Millennials?

Not only are these two groups now the most frequent travelers to date, but they’re also known to spend the most money on their trips.

As far back as 2016, Airbnb already predicted that Millennials and the younger generations would account for 75% of all consumers and travelers by the year 2025. That’s a short 2 years from now!

If you haven’t set your eyes – or your marketing efforts – on these 2 key demographics, it’s not too late. Read on to see how they’re currently driving the travel and hospitality industries, and why they’re set to become the most significant customer base in the next few years.

Marketing to Gen Z vs. Millennials

Millennials, or Generation Y, are those aged 26 to 41 years old in 2022. They were born between 1981 and 1996, entered the workforce during the Great Recession, and are now reaching their prime spending years. They make up about a quarter of the US population.

Gen Z, also known as Zooomers or the “iGeneration”, are those born from 1997 to 2012. They’re anywhere from 10 to 25 years old. They’re now coming of age and comprise the largest (27%), and most ethnically diverse segment of the US population.

While both generations are in the lead when it comes to making travel plans for 2022, the Gen Z group was willing to spend more money than any generation. 72% of Zoomers surveyed by Avail said they expected to spend more or the same amount on trips this year than in pre-COVID times. And even before COVID, the iGeneration already ranked travel and “seeing the world” as the most important way (65%) to spend their money.

However, Millennials travel more than any other generation on the whole. They have an average of 35 vacation days per year, compared to only 29 days for Gen Z. In 2022, Gen Y planned to take more trips (at an average of 4.4 trips) than Gen Z (at 4.1 trips).

But both cohorts are hands-down frequent travelers. And they’re looking for unique and immersive experiences. While a beach-side property may already be a treat for Boomers and Gen X, it won’t suffice for the younger set.

For Gen Z and Millennials, the beach resort has to boast a plethora of amenities. They want to practice yoga on the beach and attend a mixology class. They have to venture out of the property to explore the destination rigorously. They want to interact with natives and savor tantalizing local cuisines. – Tripzilla

Whether your property is in a busy metropolis, a quaint suburb, or a remote rural location, you’ll want to think of ways to draw these discriminating guests.

Characteristics of Gen Z vs. Millennials

Generations Y and Z in the Western world share a lot of things in common. Having grown up with the internet, they’re both smart, adaptable, tech-savvy, and always online.

Both are open-minded travelers and will travel the country for the following reasons: to visit friends and family, see new US cities, and give their mental health some much-needed boost.

Both groups rely on the internet for word-of-mouth (a.k.a. social media) recommendations and inspiration on where to go and what to do. They’ll veer away from traditional accommodations and tourism services. Instead, they’ll craft their own unique travel experiences.

And when it comes to ethics, both groups value socially and environmentally responsible businesses. They’ll look for sustainability in every brand and service they patronize. They’ll opt for eco-friendly accommodations, question the frequency of towel changes at a hotel, or they may frown at the use of disposable cups in a coffee machine!

But Generations Y and Z do have a few differences. Let’s take a closer look at each of them.

Who are the Millennials?

Nearly half (43%) of Millennials across the world are affluent, earning US$75,000 or more per year. Pre-COVID times, they’d spend more than $5,000 per year on a vacation, making them the age group that has spent the most on travel.

While 93% of Millennials say they look for the best deals when making their travel plans, they’re also the demographic to most likely go into debt just to travel. Yep, they want to travel that badly!

They’re likely to delay marriage and having children and thus have more freedom and disposable income to travel.

Among those who are married, 70% say their vacations are family-oriented. 62% of Millennial parents go on holidays with their children under age 5.

Being the first “digital native” generation, they’re also the demographic to go on fully digital travel journeys. They manage all the stages of their trip on their smartphones — from research to booking, to sharing photos and leaving reviews. They book their accommodations via booking apps or online travel agencies (OTAs).

Millenials are passionate users of Airbnb and will prefer vacation rentals over hotels. After all, their generation brought forth the peer-to-peer sharing economy that Airbnb pioneered in hospitality. As of 2016, roughly 60% of guests who had booked on Airbnb were Millennials.

Millennials prefer to feel like a local, experiencing the sights, sounds, and tastes of a locality. (Airbnb’s 2016 campaign was premised on this.) They’re always looking for historical, cultural, and educational experiences when they travel.

Gen Y is known for creative, off-the-beaten-path tourism. They like alternative accommodations – think ‘unique stays’ and ‘glamping’ – and are always trying out something new. They love individuality and the freedom to choose. They won’t book cookie-cutter package tours from a brick-and-mortar travel agency.

With a trademark ‘you-only-live-once’ (YOLO) attitude, they’ll go out exploring, interacting, and experiencing the world. You’ve heard it said often: Millennials want memorable moments than anything else. So they’ll pay more for them than for material possessions.

Agile and spontaneous, Gen Y like to make spur-of-the-moment travel decisions. They’ll extend business trips and turn them into “bleisure”. (*PRO tip: If you want to draw this segment, make sure you provide the amenitites essential to them: WiFi, work desks, and hair dryers in your listing.)

Always connected, Millennial travelers love texting, apps, reviews, and check-ins. They depend on a brand’s or company’s website and social media to size them up. They’ll look for high-quality photos and virtual tours of properties. If you have a website, be sure to have a FAQ and About Us page. Also, stay active on social media so you can engage with them and develop brand loyalty. 25% of Millennials expect a response within 10 minutes. (In 2016, Homeaway (now Vrbo) found that 97% of Millennials use social media during their travels.)

Millennials like incentives and promotions. Two-thirds of those surveyed admit they follow brands on Twitter or Facebook so they can get a coupon or a discount. And when it comes to loyalty rewards programs, 35% will sometimes sign up for perks and privileges, but 18% will always go for them

Gen Y are less inclined to travel internationally than Gen Z. Almost half of Millennials surveyed by HotelMize in 2021 didn’t plan to go abroad; only 35% of them arranged international trips. On the other hand, 51% of Gen Z worked out international trips, and 37% booked domestic vacations.

Who are Gen Z?

Having grown up with smartphones, the iGeneration is the most digital-savvy demographic. They’re hyperconnected and are “always on”. They are true and absolute digital natives, so WiFi is always a top priority.
While most of them are under the age of 20 and still financially dependent on their parents, members of this group are already frequent travelers. When asked how they’d like to spend their money, “travel and seeing the world” ranked as the most important (65%) goal.
They also use the internet to dream, plan and book their travels. Nearly 90% turn to Facebook, Instagram, and Snapchat for inspiration, advice, and sharing photos of their trips.
As expected, budget is a big consideration for Zoomers. So if you want to draw this group, you’ll do well to offer budget-friendly deals as part of your marketing efforts.
Gen Z are more inclined to go on activity-based trips such as trekking, skiing, or attending an event like a concert, festival, sports game, or a party.
When it comes to COVID safety regulations, this group is less demanding and more flexible. They won’t fuss about physical distancing or accommodations that aren’t “isolated enough”.
Zoomers like to travel in small groups. Over half of those surveyed prefer to travel with close friends, and another 31% prefer family trips.
The sense of adventure is what drives Gen Z to travel, not just relaxation. Because they’re young and mostly single, they’re more inclined to go for exciting activities at exotic destinations. Think cultural immersions, wildlife conservation, and bucket-list experiences.
Food is another passion. 73% of iGen choose destinations solely to enjoy the local cuisine. (Have you considered hosting special dinners or partnering with a local restaurant on a combo deal?)
These youngsters truly care about authenticity and getting to know the people behind brands. They expect service providers to be truthful and authentic. If you want to connect with Gen Y, offer a personalized approach to customer service – whether it’s via your digital channels or in-person interactions.
Comfort isn’t a priority. They value unconventional places and experiences more than luxury.
Gen Z has the greenest and most responsible tourism ethic among all generations. 56% of them prefer staying in eco-friendly accommodations and supporting local businesses and products.

Gen Z, Millennials, and Social Media

We can’t stress this enough: these young jet-setters rely heavily on social media. 70% of Millennials use online reviews to finalize decisions about their travel arrangements. And 29% of older Gen Z (ages of 18-24) and 27% of Millennials consider reviews to be one of the three most important factors in making a travel decision.

It’s imperative that you have a strong presence on Facebook, Instagram, and Snapchat to capitalize on both generations’ reliance on social media “advertising”. Each guest could be your influencer and product endorser to countless other potential guests.

Additionally, give them a reason to share good experiences about your properties. Whether it be styling your place to make it Instagrammable, or posting a hashtag on behalf of your neighborhood and the great things to see and do in the area.

If it’s Millennials you want to draw, then promote experiences and nearby attractions that appeal to young families. Provide family-friendly amenities like toys, board games, an outdoor grill, and pet-friendly amenities.

Which is Better, Millennials or Gen Z?

While both Gens Y and Z already have purchasing power and significant influence on supply and demand, Zoomers are quickly shaping and redefining the future of tourism in general. They’re also expected to become more affluent – and the most influential segment – in e-commerce in the coming years. As early as now, try to build strong relationships with them.

If your property is in a large urban area, you might lean towards catering to rich Millennials, Millennial business travelers, or Millenial parents vacationing with their young children.

On the other hand, if you’re near a beach, national park, or any natural attraction, look for local events and unique, exciting activities that would draw Zoomers more.

But if possible, expand your customer base by catering to both generations. Know their values and preferences, and use the channels they communicate on. When you make it your goal to serve their needs, you’ll be well on your way to capturing these two key demographics.

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About the author:

Julian Sage

Julian Sage is short term rental host & founder of Short Term Sage, an education platform for short term rental operators. Julian share's his experience growing his short term rental management company to over $1 Million per year & over 60 properties. Julian has been featured on platforms like Bigger Pockets & Military to Millionaire.