This wealthy segment of society is growing all the time, yet often overlooked by marketeers. Gary Noakes reports.
Equalling a third of the UK population, living longer and holding 80% of the country’s wealth – the over-50s market is one the travel industry cannot ignore.
A conference being held later this month will highlight how the travel industry can tackle a section of society that currently includes almost 24 million people in the UK and which will increase to more than 30 million in the next two decades.
One of the speakers at The Over 50s Market in Travel seminar, run by Abta, is Kay Neufeld, senior economist at the Centre for Economics and Business Research. He said there were several key characteristics in the sector, which now accounts for an estimated 33-36% of the population.
“There’s an increasing number of the over-50s and they are getting to be a bigger share of the population. They are also reaping the fruits of their labours and, at the moment, they are quite well off,” said Neufeld.
He added that this part of the market had not yet peaked, with estimates of more than 30 million over-50s in the UK in the next 20 years. This section of the population is becoming increasingly wealthy, having benefited from soaring property prices and once generous company pensions, as well as the “triple lock” on state pensions. The latter, introduced in 2011, means state pensions increase either by 2.5% annually or with inflation, or match average earnings growth – whichever is the greater – which means pensions are increasing at almost double the average wage rise. The over-50s generally also have no debts from education and, following other changes to pension laws, can take some of their pension as a lump sum.
Neufeld said the travel industry needed to do “everything it can do to get in touch with this market”. “It’s good times in that sector,” he said.
To find out more about Abta’a The Over 50s Market in Travel event, click here.
However, the travel industry should be making hay while it can, as Neufeld warned that the characteristics of this sector would change over time. “At some point, the ‘squeezed middle’ will become the over-50s; they have larger mortgage debt and larger university education debt,” he said.
Research by Abta has revealed the holiday preferences of the over-50s “Baby Boomer” generation – those born in the 20 or so years after the Second World War. Among the findings are that the 55-64 age group were the most likely to plan a city break in the next 12 months and that one in six would like a trip to lakes and mountains in the coming year.
The research showed that 55-64 year-olds take more holidays than any other age group, with 48% travelling in the UK or abroad last year. Surprisingly, 87% of those aged 45-64 booked online – a higher percentage of online bookings than made by any other age group.
Kevin Lavery, vice-chairman of the Mature Marketing Association, said the travel industry had a lot to learn about how it approached the sector.
“The advertising and marketing industry is youth centric and so often targets upwardly mobile millennials who can’t afford premium products,” he said.
“It’s important to recognise the spending power of the over-50s. However, only 10% of advertising spend is aimed at the older market.”