If you want to figure out consumer spending patterns in the travel industry, look at the generations. At the moment, it’s a mixed picture, but the long-term trend for travel spending appears to remain intact, which should be good news for companies like Expedia Inc. (EXPE), The Priceline Group Inc. (PCLN), and Ctrip.com International Ltd. (CTRP).

In order to understand the situation, you must first understand the generations. The chart below should help in that regard:

Current Age Range

U.S. Population

Baby Boomers

52-70

74.9 million

Generation X

36-51

63.7 million

Millennials

19-35

75.4 million

(Source: U.S. Census Bureau)

The millennial population recently exceeded the baby boomer population, which has been declining because deaths are offsetting baby-boom-generation immigrants to the United States. The baby boomers drove the U.S. economy for decades, and now that they’re retiring at a rapid rate, they want to travel more. This is good news for Expedia, Priceline, and Ctrip. Generation X is viewed as a middle-child generation because these consumers don’t have as much of an impact on the economy as baby boomers and millennials. Barring any economic calamities related to prolonged record-low interest rates and reckless borrowing practices, the millennial population should pick up the slack from the weakening baby boomer demographic. According to Pew Research, the millennial generation isn’t expected to peak until 2036 at 81.1 million.

You might have noticed that Ctrip has been mentioned twice above. That’s because there are 400 million millennials in China. To put that in perspective, there are only 318.9 million people total in the United States. According to Skift—a global travel industry intelligence company—these Chinese millennials are wealthier than the previous generation, prefer independent travel, and almost always use mobile booking. According to GfK—Germany’s largest market research institute—Chinese tourists spent the equivalent of $229 billion in 2015, and there were 109 million outbound tourists. GfK also points out that 70% of Chinese millennials have white-collared jobs, and that 66% of Chinese millennials are high-income. Taken altogether, the Chinese millennial demographic is expected to drive travel spending over the next several decades. However, the Chinese government has used massive amounts of leverage to keep its economy afloat. This could lead to a multiyear bust. Even if that’s the case, the Chinese economy should bounce back based on population growth, which leads to increased consumer spending.

Priceline has a 15% stake in Ctrip.

EXPE has depreciated 2.91% over the past 12 months. It currently offers a dividend yield of 0.82%.

PCLN has appreciated 3.67% over the past 12 months.

CTRP has appreciated 4.10% over the past 12 months.

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