Is the Staycation Dead? Deregulation and Social Media Spur Travel
Labor Day once conjured up old-fashioned images of dad throwing burgers and hot dogs onto a charcoal-fired grill. It was the original “stay-cation.” But something has changed. Like other national holidays, Labor Day is becoming a traveling time. Increasingly, brides and grooms are exchanging their vows over holiday weekends, since it gives their guests extra time to explore wedding destinations. On July 4th, instead of staying home to light sparklers on the front lawn, 49 million Americans packed up and hit the road, reported the Automobile Association of America. And it’s not just national holidays. Across the calendar, from the Chinese Lunar New Year to “babymoons” to Pride, people are travelling and looking to celebrate new experiences in new places. Have you noticed that trains, planes and automobiles are packed? What explains this new and potent trend?
Because people are seeking experiences, bucket lists now rule for people of all ages. A study published in Psychological Sciences with the clever title Waiting for Merlot found that experiential purchases make people happier than material ones. Indeed, Millennials are especially driven towards shared experiences. After all, their behavior and lingo led the Oxford English Dictionary to add the word FOMO – “fear of missing out” – to its entries in 2013. Surveys show that Americans are much more likely to travel during their birth month than during the rest of the year. Birthday invitations that include a “no gifts, please” note might also include an invitation to join the celebrant at a Las Vegas hotel, on a cruise ship, or on a golfing trip. Even at Christmas-time, only one-third of holiday spending goes to physical gifts. That’s why share prices of wrapping paper companies have collapsed, and FTD florist declared bankruptcy last spring. Meanwhile, instead of buying birthday cakes, people are buying baking classes, and instead of gifting bottles of wine, people are gifting artisanal wine tours.
Second, travel is easier and less expensive than ever before. A strong economy and a 3.7% unemployment rate help, of course. But that’s not all. Deregulation and feverish online competition have delivered the “democratization of travel.” Compare the early Reagan years to today. In 1980, in order to plan a getaway, people would have to place long distance phone calls. The price of phone calls has dropped 90 percent. Airline deregulation has pushed down airfares by about 50 percent, making it far easier for friends and families to travel together. Airbnb and CouchSurfing offer lodging in medieval Irish castles and even luxury tree houses in the Serengeti, places that had once been off-limits except for the wealthiest travelers. Family reunions used to be limited to people like the Kennedys in Hyannisport or the Bushes in Kennebunkport. Now nearly anyone can nab a room with a view or rent a yacht by the hour.
Finally, the menu of vacation and “experiential” choices has multiplied. Consider: for many years, travel agents joked that a cruise vacation appealed only to the “newlyweds and the nearly dead.” Today, instead of one dining room and a shuffleboard tournament, ships are more likely to offer a dozen restaurants and activities that range from planetariums, cooking classes, and Broadway shows to indoor skydiving, ice-skating rinks, and deep-sea fishing expeditions. Yes, shuffleboard still takes place on the Lido deck, but on a modern “Love Boat,” while grandpa vies for his shuffleboard trophy, parents can take heart-pumping Zumba classes, and little Matthew can pet dolphins and learn to build a drone.
With these forces enhancing and promoting celebrations, it’s no surprise that a new generation of celebratory planners have jumped into the act. Goldman Sachs and NBCUniversal have backed Zola, a wedding registry for experiences, while Honeyfund helps affianced couples crowd-fund to pay for their honeymoon, and Vebo arranges Game of Thrones filming locations for daring couples to spend their wedding night. Meanwhile, Airbnb has opened the door to more than homes, villas, and treehouses. Its Airbnb Experiences division captures the Millennial lust for adventure, whether through paragliding across the Alps or chess-playing with masters in Russia. When Airbnb launched its Experiences business in late 2016, the division grew thirteen times faster than the original lodging business did over a similar period. Even the most traditional consumer products companies are promising adventures: LVMH, the Louis Vuitton company, is buying the Orient-Express Hotels group because it realizes that many of its best customers would prefer a historic train ride to a leather tote bag.
Celebrations once meant sending out invitations, staying home, and receiving guests who would pay tribute with gifts and clinking glasses. More and more, however, as travel choices expand and people search for meaningful experiences, the invitation does not propose a home visit, but instead says, as Frank Sinatra once sang, “come fly with me.”
(this piece by Victoria Buchholz appeared in RealClearMarkets)