Industry Review no.3 - Product Development

PRODUCTDEVELOPMENT

INDUSTRY REVIEW NO. 3

Industry revIew no.3

youth and student travel market

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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:

World Youth Student & Educational Travel ConfederationKeizersgracht 174 1016 DW AmsterdamThe Netherlands

Tel: +31 (0) 20 421 2800Fax: +31 (0) 20 421 2810Website: www.wysetc.orgEmail: [email protected]

Prepared in cooperation with:

StudentMarketing Ltd.Am Gestade 1 1010 Vienna Austria

Tel: +43 650 612 452

Website: www.student-market.com Email: [email protected]

COPYRIGHT © 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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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 special-ist 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:

We hope our members will find these new additions to our Research Programme useful and thought provoking. The three stage pro-gramme outlined above, offered in collaboration with StudentMarket-ing, is only available to WYSE Travel Confederation members.

Please visit www.wysetc.org for more information about WYSE Travel Confederation’s Research Programme.

research programme

1. Industry Review SeriesA 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 SurveyPrimary research to source up-to-date data from youth specialist businesses across all sectors, globally.

3. Research on DemandWYSE Travel Confederation members have the opportunity to commission research particular to their sector and business needs.


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table of contents

Introduction 5methodology 6executive summary 7respondent profile 8Customer profile 10trends 11Preferred destinations 12Preferred cities 14Preferred programmes 16accommodation types 18new products 20Challenges 22

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IntroductionIn 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, Accom-modation 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 institu-tions, businesses, agencies and other secondary sources.

This report –“Youth and Student Travel Market – Product Develop-ment, 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 busi-nesses 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 Student-Marketing, 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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methodologyYouth 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 inde-pendently). Only the targeted sectors were surveyed: Language Travel, Higher Education, Exchange/Work Experience, Volunteer Travel, Back-packing/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 e-mail 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.

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 under-taken at an accredited institution abroad. The definition includes ter-tiary 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 (un-like 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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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:• Theyouthtravelindustryaccountsfor196millionarrivals(2011);• ThevalueoftheyouthtravelmarketisUS$173billion(2011);• Theyouthtravelindustryisinahealthyconditionandwellpositionedforfurthergrowth;• By2020,theyouthtravelindustrywillgrowtoUS$320billionperannum.

Key findings revealed by the research are:• Mostyouthandstudenttravelcompaniesareexperiencinggrowthinsizeandrevenues;• 56%noticedincreaseinparticipantnumbers;• 45%increasedtheirannualturnover.

Youth and student travel companies are expanding and diversifying• 44%addedanewproductfromadifferentsectorin2011;• Thenumberofmergersandbuyoutsislikelytoincrease.

More big players anticipated• 27%ofcompaniesdealwithover1,000youthtravellersperannum;• 25%haveanannualturnoverofoverUS$1,000,000.

Service levels are generally high• Agenciesonaverageserve853customersperannum;• Anagencyemployeeisarrangingonaverage32placementsperannum.

No change in the leading destinations, but surprises elsewhere• TheUSAandtheUKarethetopdestinations,Canadacomesthirdandishighlyrankedinallsectors;• LondonandNewYorkarethemostpreferredcitydestinations.

International student travellers stay longer and spend more than average tourists• Theaveragestayis53daysinthedestination;• SpendinginmostsectorsrangesbetweenUS$1,000toUS$6,000pertrip.

Key features and characteristics of youth and student travellers (from the five measured sectors only):• 39%travelwithclassmates,friendsorfamily;• 26%representrepeatcustomers;• 23%arejuniors(under18);• 38%ofcompaniesreportvisaproblemsexperiencedbyyouthandstudenttravellers,butincertainregionsonly.

Youth travellers prefer cost-efficient accommodation with immersion experience• 59%staywithahostfamily;• 22%stayinahostel.

executive summary


PRODUCTDEVELOPMENT

INDUSTRY REVIEW NO. 3

Documents

Industry Review no.3 - Product Development