Hoteliers are missing a trick, as the health-, cash- and time-rich retiree market are on the prowl for their next adventure and businesses are failing to grab this opportunity with both hands. We discover the power of the grey pound and find out why this audience carries huge spend potential for hoteliers to embrace.
Austerity has firmly fallen off the agenda for many of Britain’s pensioners, as this growing market blaze a trail as tourists.
The rise of the retiree has opened up a world of opportunity for UK hoteliers, which according to research, is being left unmet.
Despite the over-65s boosting the UK hotel and travel economy by an estimated £37bn in 2014, businesses are failing to make the most of the ‘grey pound’, according to Barclays, targeting them in lacklustre ways.
The report showed that just 5% of hotel and travel businesses within the sector saw over 65s as their most important target market, while UK-wide, 76% of firms had no plans to introduce products targeting the over-65s. For hoteliers, this looks short sighted.
Growing old isn’t what it used to be and the older generation refuses to shuffle quietly into retirement; they are in the main health, cash and time rich and what they do with their money can have a big impact on the wider economy. Often they are sitting on a lifetime’s accumulation of wealth, even if much of it is spread unevenly or tied up in their homes.
But as the over-65s reach later life, they want to spend this money and their time enjoying adventurers and experiences they may not have able to during their working life. Whether that’s backpacking through the outback, motorcycling through the South of France or cruising the world on a luxury liner, they are demanding and discerning but get it right and they could become your most loyal customers.
Low interest rates also means that silver-haired consumers are looking to spend their pension pots, rather than put away money to save that sits gaining no interest.
As a result of this booming market, new industries are springing up and existing ones expanding to meet the demand from these wealthy older guests and woe betide those hoteliers who underestimate the financial impact they can have.
The over-65s are defined much more by self perception and lifestyle choice, which makes them hard to pigeon hole, but Barclays says that in 2014 hotel businesses missed out on a further £16bn boost by failing to target this group properly.
New research that emerged last year in a report named the Third Age Economy showed that between 2002 and 2012, spending on travel and tourism by those aged 65-74 rose by 51%, bringing a big boost to the domestic travel industry alone as the number of staycations contributes to this figure.
It’s vital that hoteliers realise the potential needs of this market to ensure they target them in effective ways, with insurance, health and mobility often a major booking factor among the over-65s.
The silver traveller
Silver Travel Advisor is an online review site offering holiday reviews, information and advice to the over-50s and is a source used by many a mature traveller. In 2014, the site conducted research with 500 of its members and found that 38% felt that current travel advertising was ‘often irrelevant’ to them, while 53% thought that older people were being ‘patronised’ and 82% did not ‘recognise themselves’ in ads.
Given the size and spend of this demographic, hoteliers need to ensure that targeting the over-65s becomes a major part of their marketing plans for the coming year; this audience will only grow in importance in the next 25 years. Studies show that the current 22.8 million people aged over 50 will grow to 31 million by 2040, when they will have an estimated total household spend of £480bn per year.
Five minutes with the experts: Warner Leisure
Warner Leisure is an adult-only over 50’s hotel group with 13 sites around the UK. We squeezed out some insight to help you better target this growing market.
Key marketing techniques?
We utilise both modern & traditional media. Our target audience are tech-savvy, so digital communications are increasingly popular, but direct mail and door drops still have an important role to play.
How powerful is this consumer group?
Very. They are a growing sector who are time rich and enjoying high, disposable income. Plus the demands of helping with increasingly busy family schedules means hoteliers can offer the right opportunity to recharge away from the grandchildren.
How has it changed over the last five years?
There has been a noticeable rise in interest in activities both on-site and in the vicinity of the hotels and villages.
What do the over 50s look for in a holiday or hotel stay?
Like-minded people to share fun and adventure; relaxation and exercise; good quality accommodation, dining and entertainment.
What are your most successful packages?
It depends on what the guest is looking for. Our two, three, four, five and seven-night stays appeal to differing guest requirements, and Warner offers them all.