INDUSTRY REVIEW NO. 3
PRODUCT DEVELOPMENT
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YOUTH AND STUDENT TRAVEL MARKET Industry Review no. 3: PrODUCT DEVELOPMENT This is the third in a new series of industry reports for WYSE Travel Confederation members.
Published by:
Prepared in cooperation with:
World Youth Student & Educational Travel Confederation Keizersgracht 174 1016 DW Amsterdam The Netherlands
StudentMarketing Ltd. Am Gestade 1 1010 Vienna Austria
Tel: +31 (0) 20 421 2800 Fax: +31 (0) 20 421 2810 Website: www.wysetc.org Email: laura.daly@wysetc.org
Tel: +43 650 612 452 Website: www.student-market.com Email: research@student-market.com
COPYRIGHT Š 2012 WYSE TRAVEL CONFEDERATION All rights reserved. The contents of this report may be quoted, provided the source is given accurately and clearly. Distribution or reproduction in full or in part is permitted for members’ own internal use only. Disclaimer: The presentation of material in this publication and the designations used do not express the opinions of authors, but represent the results of primary research. Due care and attention have been taken in preparing, but this does not warrant that it is correct and complete.
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Research programme WYSE Travel Confederation and its Sector Associations are committed to understanding the ever-changing characteristics, motivations and needs of young travellers and the industry that supports them. The Confederation and Associations gather, analyse and share important research data and market intelligence with their members, academics, corporate and government decision-makers, and the general travelling public. Our investment in research and market intelligence informs the policies, services and products which make international travel and educational experiences exciting, safe, accessible and affordable for young people. Last year, we developed a partnership with industry research specialist StudentMarketing to build on the good work already done and help fill out the picture of our vibrant but still under-documented industry.
The Research Programme has three parts: 1. Industry Review Series A research based industry review from secondary sources, compiling recently available data on industry matters that affect members’ businesses (youth travel market dynamics, mobility, pricing, customer preferences and marketing).
2. Primary Survey Primary research to source up-to-date data from youth specialist businesses across all sectors, globally.
3. Research on Demand WYSE Travel Confederation members have the opportunity to commission research particular to their sector and business needs.
We hope our members will find these new additions to our Research Programme useful and thought provoking. The three stage programme outlined above, offered in collaboration with StudentMarketing, is only available to WYSE Travel Confederation members. Please visit www.wysetc.org for more information about WYSE Travel Confederation’s Research Programme.
youth and student travel market
4 Industry Review no.3
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Table of contents Introduction 5 Methodology 6 Executive summary 7 Respondent profile 8 Customer profile 10 Trends 11 Preferred destinations 12 Preferred cities 14 Preferred programmes 16 Accommodation types 18 New products 20 Challenges 22
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Introduction In 2011, WYSE Travel Confederation began its latest research initiative, a commitment to better document the youth and student travel industry and provide Confederation members with market intelligence. Within the Research Programme, the Confederation launched a series of Industry Reviews, starting with “Youth and Student Travel Market – Data, Statistics and Trends, Industry Review no. 1”. The review examined six sectors of the industry, namely Language Travel, Higher Education, Exchange/Work Experience, Volunteer Travel, Accommodation and Backpacking, and looked at them in the context of the Global Tourism industry. The second report in the series “Youth and Student Travel Market – Pricing, Industry Review no. 2” focused on the same six sectors of the global youth and student travel industry. The research used published material from over one thousand institutions, businesses, agencies and other secondary sources. This report –“Youth and Student Travel Market – Product Development, Industry Review no. 3”- continues the quest to shed more light on the industry. This time the research focused on the five major sectors represented by WYSE Travel Confederation, namely Language Travel, Higher Education, Exchange/Work Experience, Volunteer Travel, Backpacking/Adventure Travel. Sectors such as Junior Group Travel and Leisure Travel are not extensively covered in this report. The research targeted international youth and student travel businesses collecting data from organisations, companies and corporate rather than customer responses, across the five selected sectors. Both primary and secondary research tools were used to gather data and provide insights into product development in the industry. The research initiative was conducted in cooperation with StudentMarketing, strategic research partner to WYSE Travel Confederation. WYSE Travel Confederation would like to thank all 769 participating organisations for their contribution, as well as our sponsors for their generous support. The Executive Summary and full report (members only) for this and the other reports in the Industry Review series are available at www. wysetcresearch.org.
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WYSE TRAVEL CONFEDERATION AND STUDENTMARKETING HAVE DEVELOPED AN INDIVIDUAL MEMBER BENEFIT: TAILOR-MADE RESEARCH ON DEMAND AT A DISCOUNTED PRICE.
Benefit for WYSE Travel Confederation members! WYSE Travel Confederation members have the opportunity to and business needs - at a discounted price. WYSE Travel Confederation members will receive a discount of: - 10% on commission up to €7,999 - 15% on commission over €8,000
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Methodology Youth travel organisations around the world were asked to participate in a detailed survey which was open during a two month period in 2012. Respondents were asked about their business operations during the calendar year 2011, and to provide specific information about customer preferences and product development. The research captures the preferences of young travellers who use organisers (providers or agencies) and does not include preferences of independent travellers (those organising their international trips independently). Only the targeted sectors were surveyed: Language Travel, Higher Education, Exchange/Work Experience, Volunteer Travel, Backpacking/Adventure Travel. Some sectors, such as Junior Group Travel and Leisure Travel, were not surveyed. From a sample of circa 30,000 youth and student organisations and companies, data was collected from 769 of them (both providers and agencies). These are of all sizes, covering 93 destinations and source markets and representing over 1 million youth and student travellers, cumulatively. In order to maximise the reach of the research and the number of responses, the data collection process was conducted online using a specially designed questionnaire. Supportive initiatives - such as email invitations and targeted calling - were applied in order to secure a robust response rate. Data analysis was executed using computer software. Each question was processed and analysed separately. All answers provided were handled with confidentiality and were not attributed or identified on an individual basis for any reason at any stage.
youth and student travel market
For the purposes of this study, the following definitions were applied: Provider - a company establishing youth and student travel programmes. Agency - a company reselling such programmes of provider institutions. Language Travel - youth and student travel with the purpose of learning a language abroad. Higher Education - post-secondary, non-compulsory education undertaken at an accredited institution abroad. The definition includes tertiary education provided by universities, community colleges, vocational colleges, technical training institutes, etc. Work Experience - travel with the intention to work and experience the culture and life of the host destination. It is usually a paid experience (unlike volunteering). This sector includes, but is not limited to, Work and Travel programmes, Work Experience Abroad, Work & Study, Working Holiday programmes, Internships, Au Pair, Teaching Abroad, Camp Counsellors, etc. Volunteer Travel - travel with voluntary work (unpaid work), in most cases provided by a non-profit organisation. Backpacking - a low-cost, independent style of international travel. Adventure Travel - includes travelling to distant locations, undertaking some kind of physical activity, and interacting with different cultures.
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Executive summary This study “Youth and Student Travel Market – Product Development, Industry Review no. 3” constitutes the third report of a series introduced by WYSE Travel Confederation. This report maps and analyses information useful for product development in the selected, major sectors relevant to WYSE Travel Confederation members. The research compiles information on trends, new products, preferences, and challenges in the five selected sectors, namely Language Travel, Higher Education, Exchange/Work Experience, Volunteer Travel and Backpacking/Adventure Travel. This initiative reflects the results of the primary research of youth and student travel companies of all sizes from the five selected sectors. They cover varied destinations and source markets, are both providers and agencies and represent, cumulatively, the preferences of over 1 million youth and student travellers.
Globally it was found that: • • • •
The youth travel industry accounts for 196 million arrivals (2011); The value of the youth travel market is US$173 billion (2011); The youth travel industry is in a healthy condition and well positioned for further growth; By 2020, the youth travel industry will grow to US$320 billion per annum.
Key findings revealed by the research are: • • •
Most youth and student travel companies are experiencing growth in size and revenues; 56% noticed increase in participant numbers; 45% increased their annual turnover.
Youth and student travel companies are expanding and diversifying • •
44% added a new product from a different sector in 2011; The number of mergers and buyouts is likely to increase.
More big players anticipated • •
27% of companies deal with over 1,000 youth travellers per annum; 25% have an annual turnover of over US$1,000,000.
Service levels are generally high • •
Agencies on average serve 853 customers per annum; An agency employee is arranging on average 32 placements per annum.
No change in the leading destinations, but surprises elsewhere • •
The USA and the UK are the top destinations, Canada comes third and is highly ranked in all sectors; London and New York are the most preferred city destinations.
International student travellers stay longer and spend more than average tourists • •
The average stay is 53 days in the destination; Spending in most sectors ranges between US$1,000 to US$6,000 per trip.
Key features and characteristics of youth and student travellers (from the five measured sectors only): • • • •
39% travel with classmates, friends or family; 26% represent repeat customers; 23% are juniors (under 18); 38% of companies report visa problems experienced by youth and student travellers, but in certain regions only.
Youth travellers prefer cost-efficient accommodation with immersion experience • •
59% stay with a host family; 22% stay in a hostel.
youth and student travel market
Industry Review no.3
INDUSTRY REVIEW NO. 3
PRODUCT DEVELOPMENT