You may not have noticed, but travel is becoming much more than just packing the family into a car or plane to visit the coast or some amusement park. Adventure travel is on the rise, and payments are playing a part in this increasing trend.
We at PYMNTS haven’t yet had the occasion to take a journey into Antarctica or set up camp in the Chilean highlands for a glorious view of the Milky Way, but we did manage to catch up with Colin Smyth, head of the travel segment at Flywire, to get a better sense of how payments and adventure travel – think bucket list experiences on steroids – are working together to create growth in this relatively new, experience-driven segment of tourism.
If you can boil the fuel behind the adventure travel trend down to one concept, “experience” would do better than most words. “It’s the Instagram effect,” Smyth told PYMNTS’ Karen Webster – indeed, that social media platform not only allows consumers to show off the highlights of their lives, but also serves as aspirational content for what they might do next. Shows that focus on global travel adventures, such as the ones by the likes of the late Anthony Bourdain, have also helped to take travel, in his words, to the next level – to give viewers an up-close-and-personal sense of what it is really like to sit in an off-the-track café in Vietnam, as Smyth recalled during the PYMNTS interview.
And, of course, digital and mobile technology is playing a huge role, enabling consumers to not only find appealing adventures, but to also arrange all the little details vital to the success of such trips. A venture to a secluded beach on the Black Sea is just a distant dream, after all, without proper visas and guides and the trust that a tour operator or seller of accommodations won’t rip you off.
And, of course, you’ll need a way to pay for it all.
Growing Industry
PYMNTS research illustrates the adventure-turned-luxury travel trend. First, some clarification. There is traditional luxury travel, all those shiny beaches in Bali and such. There is also adventure travel at luxury prices – where people channeling their inner James Bond get to experience what it’s like to be part of a spy thriller-like experience with eight friends, or parachuting out of helicopters or various other heart-stopping treks. In addition to having the discretionary income to pay for such trips, these experiences are right in sync with the Baby Boomers and other consumers who are physically fit and like being active when they travel.
Let’s step back for a moment to better define the trends, given the upscale nature of luxury and adventure travel. Luxury travelers from the United States – who often seek off-the-beaten-path, exotic adventure experiences – spent $1.1 trillion on their vacations last year, as demonstrated by recent PYMNTS research. The market is projected to further expand, too, with an estimated 139 million people – more than half the nation’s adult population – planning to take luxury vacations next year.
As well, luxury travelers are willing to spend big on their unique brand of excursions, which can go far beyond beach trips or amusement park outings. Those who embark on luxury vacations are willing to shell out large sums on their getaways, with 50.6 percent spending up to $5,000 per trip, 28.9 percent spending between $5,000 and $7,500 and 20.4 percent paying more than $7,500 for their travels.
That’s not all. PYMNTS research further reveals that 92.1 million U.S. adults took such luxury vacations last year alone, with approximately 25.4 million reportedly going sightseeing at exotic locales – not just staying a few nights at a camping site. Another 15.1 million went mountain climbing, hiking or camping – some of the most popular general forms of adventure travel – while 8.4 million spent their time at amusement parks and 6.3 million hit the seas on cruise ships. “More people are looking at vacations as experiences,” Smyth said.
Gaining an Edge
But expensive vacation experiences – luxury or adventure or a combination of both – don’t really work if the payment process is friction-filled.
For instance, when it comes to these upscale, high-cost travel adventures – Smyth told of one Flywire client from South Africa that offers a $24,000-per-day trip to Antarctica that includes a marathon and, presumably, heated tents as comfortable as some luxury hotel rooms – deposits are not usually a big issue, given that such consumers tend to follow through with their plans. But local and cross-border payments are key, and since a company such as Flywire basically operates via a global banking network, he said, that provides an edge.
Security is also obviously important, given all the money involved – and for Flywire, that means working closely with its travel operator partners on such areas as terms and conditions, Smyth told Webster.
No matter the risks and other relatively unique parts of this market, the growth seems certain to continue, especially as payments and digital and mobile technology make it easier to match adventure seekers with appropriate and appealing vacations.
“Adventure travel was once rough-and-tumble, and you had to give up something,” Smyth said. “You don’t have to give up something if you can pay for it. You can basically take the four seasons on the road.”