20-05-2025
A sustainability premium is a tough sell -- but what about Gen Z?
Teri West
When I explored the question of whether cruisers, particularly in the expedition and luxury market, would be willing to pay a sustainability-related premium, the answer I received was, essentially, "no."
Cruise executives and advisors who specialize in these products told me that while customers may care about sustainability, the destination itself and the price are still their primary concerns. If one line was to charge an extra fee for sustainable efforts, it could lose customers to a competitor, they said.
But that story may change in the decades to come, as younger generations mature, grow their wealth and start talking with their money.
"I have a 19-year-old daughter who's my youngest one, and she has a complete different focus on environment and sustainability than I ever had at that age," Hurtigruten COO Gerry Larsson-Fedde told me. "And that's the generation that's coming. That's the generation that will be our guests in the future. And we really need to be prepared for that."
Studies have for years documented the way Generation Z consumers think about the environment when they shop.
Capital One reported in March that a little more than half of Gen Z shoppers are more likely to choose a product based on its sustainability than its brand name. The comparable rates for Gen X and Baby Boomers were 11% and 20%.
When asked whether they would be willing to pay more for sustainable products, 73% of Gen Z respondents answered "yes" in a 2019 study conducted by consumer data analyst First Insight. That's a higher rate than any other generation; just 55% of Gen X respondents and 42% of Baby Boomers had the same answer.
But that was six years ago, you say. Consider this: In the same study conducted two years later, the rate had continued to increase for every other generation -- but especially for Gen X, which surged to a 78% willingness to pay more.
There is less data available about whether and how younger travelers prioritize sustainable travel, but what is available shows many are thinking about the Earth when taking trips. For example, half of the students surveyed for StudentUniverse's State of Student Travel in 2024 report said they prioritize booking with companies that have strong environmental credentials.
Of course, the desire to prioritize the environment doesn't always align with how Gen Z shops in practice. Fast fashion, for example, is still popular; 72% of college students reported shopping a fast-fashion chain in a 2022, according to a report published by ThredUp.
But fast-fashion products are also amongst the most affordable for building a wardrobe. In 10, 20 or 30 years, we could expect the wallets of those then-college students to be more robust and, perhaps, discerning.
There is already a sector of people unwilling to cruise because of the industry's environmental impact, said Gari Senderoff polar travel specialist with Cruise Planners.
"And let's face it," he told me, "Nobody really, absolutely needs to cruise. People need to fly, but no, this is a luxury that nobody really needs."
If upcoming generations continue to prioritize lowering their environmental impact, the industry could lose out on more customers who choose to put the environment first. Or it could work proactively.
"You can't start in 20 years," Larsson-Fedde said. "We need to start now."
