If travel companies want to capture the business of Gen Z travelers, they’ll have to rethink their approach, according to research by Bernstein. Those in the younger generation — born between 1997 and 2012 — don’t just use the internet differently than their older counterparts, they are increasingly likely to engage with social media platforms to find information, analyst Richard Clarke wrote in a Wednesday note. Gen Z adults use TikTok and Instagram to make purchase decisions at more than double the rate of the average person, a Bernstein analysis found. While older generations may spend more money, younger Americans are booking more travel than Gen X and Baby Boomers. Some 40% said they booked a trip in the past month, following millennials at 49%, according to a recent survey by decision intelligence company Morning Consult . “Given enough time, this generation will change the travel distribution landscape,” Clarke said. Because of this shift to social media, organic content and engagement on the sites are key for those trying to win Gen Z’s business, he noted. “Travel companies will need to cultivate their presence, rather than leaning on high conversion platforms like Google,” he said. Clarke believes online travel agencies (OTAs) have the advantage since they have a much larger brand presence on social media sites. The clearest generational winner appears to be Airbnb , he said. ABNB YTD mountain Airbnb year to date “Airbnb looks best at attracting the youngest visitors, in part helped by its content being the most social media friendly,” Clarke wrote. The vacation-rental platform has the highest skew to 18-24 year olds and 5.4 million Instagram followers, the highest among travel companies, he added. Clarke has an overweight rating on the stock and a $168 price target, implying about nearly 33% upside from Friday’s close. In comparison, Airbnb has an average analyst rating of hold and 12%upside to the average price target, per FactSet. — CNBC’s Michael Bloom contributed reporting.
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