Millennials Spend Less on Corporate Travel and Expenses, New Research Shows

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Millennials: big corporate spenders they still are not. According to Concur’s analysis of $36 billion in expenses that were processed through its travel expense management solution between Q1 2015 and Q1 2017, employees between the ages of 22 and 35 spend 18% less than those who are 36 or older.

According to the Pew Research Center, the millennial generation became the largest group in the U.S. workforce as of 2015, accounting for more than one in three workers. While it is likely that this generation’s corporate T&E spending patterns will evolve as the employees become older and more senior in their organizations, it is interesting to see how their current spending patterns differ from their older colleagues.

“The impact of millennial business spending habits was something that we were really interested to take a closer look at since there has been little data available previously on what is now the largest generation of people in the American workforce,” says Tim MacDonald, chief product officer at Concur. “We also wanted to challenge our assumption that millennials have drastically different spending habits than previous generations.”

Concur split the expenses into three categories: dining, entertainment and hotel. On average across industries, millennial employees spend $44 per dining or entertainment transaction, compared with $52 for employees between the ages of 36 and 65. The gap is more noticeable in the entertainment category.

Source: Concur

“The type of industry an employee works in plays a strong role,” MacDonald says. When industry is taken into account, certain expense categories reveal greater generational spending gaps. According to Concur, the financial services and public services industries spend 22% and 19% more, respectively, per expense compared to other industries, such as healthcare.

Geography plays a part as well. Concur’s data show that the spending gap between millennials and older generations is widest in the regions of Asia Pacific, Europe and the Middle East.

There are a number of possible explanations behind this discrepancy in spending. One could simply be that millennial employees occupy more junior positions and therefore feel less comfortable with filing large expenses. Older generations are also more likely to have higher living standards (the infamous “lifestyle creep”).

Age differences aside, it was also during this decade that Airbnb became a popular (and legitimate) alternative to expensive hotels. Millennials make up a disproportionately large share of Airbnb guests, whose average age, according to a 2015 report, is 35. And with the rapid growth of Airbnb’s Business Travel program following its 2014 launch, we can expect to see more and more business travelers opting for Airbnb rentals.

“With the rise of Uber, Airbnb, and ‘bleisure’ travel, employees today have more options than ever before,” MacDonald says. “As the workforce continues to evolve, companies should track employee spend patterns to make sure travel, expense and invoice management programs meet the changing needs of employees of all generations.”

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