Millennials and Gen Xers Shifting Back to Traditional Services as Major Travel Brands Enter the Sharing Economy Market
Richmond, Va., June 10, 2019 – Sharing economy services are cooling off with Millennial travelers, just when they’re heating up for Baby Boomers. As the 2019 summer vacation season kicks off, trust and likelihood to use these services have changed significantly since 2017, according to the fifth annual Allianz Travel Insurance Sharing Economy Index released by Allianz Global Assistance.
Overall, the likelihood to use sharing economy services is down. About four out of ten (41 percent) of Americans responded they are either “very” or “somewhat” likely to use them during their 2019 summer travels, compared to 47 percent in 2018 and 50 percent in 2017.
Gen Xers are driving the largest downward trend in usage, with 41 percent saying they will use sharing economy services this summer (down from 60 percent two years ago). Although fewer Millennials—63 percent—say they will use sharing economy services this summer (down from 77 percent two years ago), they still make up the largest generation of users. Meanwhile, Baby Boomers are on the upward trend, with 24 percent saying they will use these services, climbing from 19 percent two years ago.
Despite demographic shifts, the market still remains strong for its core customers. Travelers who are younger (i.e. Millennials), male, and higher income earners (above $50,000) are significantly more likely than their counterparts to use sharing economy services.
One reason for lower usage may be the overall decline in levels of trust: the survey found that while Millennials are the most likely to trust sharing economy services (71 percent) that figure is down from 76 percent last year and 83 percent two years ago. Fifty-five percent of Gen X’ers (down from 68 percent last year and 69 percent two years ago) consider sharing economy services trustworthy, while 44 percent of Baby Boomers (down from 46 percent last year and 47 percent two years ago) are likely to trust them.
More established travel and hospitality companies are entering the sharing economy market, promising higher quality, more consistent experiences—often by providing new or differentiated products. For instance, Marriott recently announced a six-month trial with Hostmaker, a London-based homestay property management company. Other major hotel brand names like Hilton, Hyatt and Wyndham are also considering investments in similar home sharing businesses. These kinds of partnerships have the potential to convert customers seeking the authenticity and privacy of a home rental with assurances of the quality of experience, backed by a trusted brand name.
“When we created this index five years ago, we knew that trust would be crucial to the health of the sharing economy. The simultaneous drops in trust and usage highlight the main challenge that players providing sharing economy services will need to address,” said Daniel Durazo, director of marketing & communications at Allianz Global Assistance. “As travelers seek more consistent, reliable travel experiences with high quality customer service, travel insurance delivers by providing peace of mind and 24/7 global assistance when unexpected events derail their travel plans.”
|2019 VACATION CONFIDENCE INDEX: SHARING ECONOMY|
|To what extent do you trust “sharing economy” services such as Airbnb, HomeAway, Uber, Lyft, etc.? Would you say you find them…|
|Not very trustworthy||18%||15%||13%|
|Not at all trustworthy||11%||5%||5%|
|How likely are you to use a “sharing economy” service like Airbnb, HomeAway, Uber, Lyft, etc., during your summer vacation this year?|
|Not very likely||25%||25%||23%|
|Not at all likely||34%||28%||27%|
The Sharing Economy Index has been conducted each summer since 2015 by national polling firm Ipsos Public Affairs on behalf of Allianz Global Assistance.
Allianz Global Assistance offers travel insurance** through most major U.S. airlines, leading travel agents, online travel agencies, other travel suppliers and directly to consumers. For more information on Allianz Global Assistance and the policies offered for travelers, please visit: http://www.allianztravelinsurance.com.
*Methodology: These are findings of an Ipsos poll conducted on behalf of Allianz Global Assistance. For this survey, a sample of 1,005 Americans from the Ipsos I-Say panel was interviewed from May 1st to May 2nd, 2019. The precision of online polls is measured using a credibility interval. In this case, the results are accurate to within +/- 3.5 percentage points, 19 times out of 20, of what the results would have been had all American adults been polled. Quota sampling and weighting were employed in order to balance demographics and ensure that the sample’s composition reflects that of the actual U.S. population, according to data from the U.S. Census Bureau. Credibility intervals are wider among subsets of the population. For the purposes of this study, a Millennial is defined as someone between the ages of 18 and 34; a Gen X’er is between the ages of 35 and 54; and a Baby Boomer is 55+ years of age.
Allianz Global Assistance USA
Allianz Global Assistance USA is a leading consumer specialty insurance and assistance company with operation centers in 35 countries. In the United States, Allianz Global Assistance USA (AGA Service Company) serves 40 million customers annually and is best known for its Allianz Travel Insurance plans. In addition to travel insurance, Allianz Global Assistance USA offers tuition insurance, event ticket protection, registration protection for endurance events and unique travel assistance services such as international medical assistance and concierge services. The company also serves as an outsource provider for in-bound call center services and claims administration for property and casualty insurers and credit card companies.