With new tools providing greater understanding of the motives for student mobility and what drives students to seek out educational experiences abroad, international education professionals now have the unique opportunity to better anticipate where the next educational destination will be.
To help uncover what 2015 holds for the student travel market, NAFSA invited Atle Skalleberg, CEO of StudentUniverse, a technology company that empowers students and youth to travel, to share his company’s insight on what their data is telling them about trends to expect in the coming months.
What growth do you expect in the student travel market in 2015? What will be the largest driver fueling the growth?
Student travelers are critical stakeholders in the tourism industry and are sometimes overlooked as airlines focus on current business travelers. In reality, students make up 20 percent of all arrivals in the travel industry today. By 2020, more than 300 million student-related arrivals are expected, a number that will represent a quarter of total tourism. By the same time, 50 percent of all business travelers are expected to be millennials.
One of the key drivers fueling the growth of student travel is international specialty travel. Education travel leads the pack, and we see new markets coming online as well as continued growth from emerging markets such as China and Brazil. These students also travel a substantial amount within their destination country.
We also believe international leisure travel will continue to grow this year as students go farther than ever before.
How will student travel patterns and destinations change this year?
What we have found is that what used to be considered adventurous is now becoming the norm for student travelers. Patterns have changed over the last decade, and they will continue to do so this year. Students are not only going farther but also changing their main reason for travel. Where visiting landmarks used to drive decisions, experiences have overtaken as the primary factor. Activities such as backpacking in Asia, extreme sports in Australia, and volunteering in South America are increasingly becoming commonplace.
Additionally, students are making a kind of temporary home within the culture they choose to experience. Students are increasing their average length of stay, spending more time and money in their new country, and are more likely to return in the future. They are crossing borders for language immersion and engaging in jobs and internships while abroad.
Based on our booking data, new "breakout" travel destinations for students include Buenos Aires, Argentina; San Jose, Costa Rica; Istanbul, Turkey; Budapest, Hungary; and Cape Town, South Africa.
Is there a strong correlation between student debt and student travel budgets?
More than 40 million U.S. citizens hold student debt. Since the dot-com-bubble days, the average student debt has more than quadrupled. Needless to say, salaries have not. As the total cost of college continues to increase, debt will follow.
According to several consumer expenditure studies, student loan payments are now greater than many other spending categories, such as entertainment and apparel. College, when financed correctly, is certainly a phenomenal investment in future earnings. Too many students will graduate with a level of debt that might impact their discretionary spending patterns down the line, and therefore the travel industry.
That said, we have not seen a negative impact on student travel budgets so far. Universities and families understand the value of travel and see it as a crucial part of education.
Recently, we have seen several currencies weaken against the U.S. dollar. Should this continue, we believe this might adversely affect the appetite for incoming U.S. tourism and further fuel the trends previously described for U.S. students. Why go to a national beach for spring break if you can go abroad and get 20 percent more for your dollar?
International markets, such as the Chinese, Korean, Indian, and Brazilian markets, still have fundamentally different financial dynamics. We believe we will continue to see very healthy growth in and from these markets.
What changes, if any, do you expect study abroad programs to have on student travel next year?
We hope that more U.S. students will study abroad. We believe that we will continue to see very healthy growth in students from emerging markets. One of the benefits of studying abroad is that nearly half of those who have studied abroad engaged in international work or volunteerism after their studies were over. They also travel significantly within the country, fueling local economies. Study abroad is often when young travelers catch the “travel bug” that also ignites more frequent leisure travel during their student and adult years.
What will be very interesting in 2015 will be to see what change the State Department's new U.S. study abroad office has on the awareness and frequency of students studying abroad and the locations they travel to. Currently, 65 percent of American students who study abroad study in Europe. Although we are seeing travel to Asia and Latin America pick up, we would love to see it move even faster.
We are very pleased to see this initiative go live, as we fundamentally believe travel should be part of any modern education.