Mr. Redington

Hotel Market Reports

Is the Hotel & Travel Industry Ready to Serve Age 50+ Consumers?

By Neale Redington, Partner, Deloitte

Imagine climbing Mount Kilimanjaro. Impressive, right? Now, imagine climbing it at age 74.

In a recent New York Times article, it was reported that a 74 year old traveler spent the past several years on various adventure vacations, including climbing the 19,300 foot Uhuru Peak on Mount Kilimanjaro and pitching a tent in a sandstorm in the Gobi Desert. She has also traveled to Mongolia, Madagascar and Peru in recent years and is planning trips to the Andes and Ethiopia.

Apparently, this age 74+ adventure enthusiast is not alone. Travel industry experts note that a growing number of older travelers are seeking out more active and adventurous destinations and that unlike previous generations of the elderly, they tend to be more fitness oriented and far more receptive to adventure travel. At least that's the finding of some of the new travel firms that now specialize in serving the age 55+ market.

What does this mean for the travel industry? Increasing longevity creates new economic opportunities in the near term. According to a U.S. Consumer Expenditure Survey, consumers age 50+ have accumulated more wealth and have more spending power than any other age group in history. In addition, they spend more than $1.7 trillion on goods and services each year.

The current consumer market has seen a wave of campaigns focused on youth, with little attention paid to the aging buyer. Baby boomers in the US have long battled advertising and cultural stereotypes of aging that depict older Americans as frail, burdensome or disagreeable. However, we are undergoing a shift. Now, U.S. baby boomers are said to be focused on products, services, and information that speak to their search for healthy lifestyles, diet, exercise, comfort and image. Consequently this is reflected in their choices of travel destinations, hotel accommodations, and dining.

In addition to travel ventures like Elder Treks, mainstream companies such as Ford, Fidelity, Home Depot, the Gap, Disney, Saga are beginning to tap into the opportunities and changes that drive consumer choices in the aging baby boomer and age 50+ market. This means there are tremendous opportunities and economic imperatives to better serve this market. To profitably seize the opportunities, managers must understand how senior markets evolve and adapt products and service offerings along multiple dimensions to meet the needs of senior consumers.

In 2003, Disney rolled out "Magical Gatherings," an offering largely aimed at people more than the age of 50 who are organizing outings with friends, grandchildren and former schoolmates. Among other things, Disney allowed customers to use a website to plan the trip and simplified the creation of a common itinerary. "Magical Gatherings" are highly appealing to grandparents wanting to travel with their grandchildren, and Disney's theme parks continue to be a popular venue for multigenerational family visits. The magic of this offering is that it cleverly taps into the social and kinship networks of aging consumers. Not only does it offer an attractive experience for them and their loved ones, but it creates a social landscape that includes everyone in the group.

From rides, shows and entertainment options to dining and recreational recommendations, Disney recommends experiences that can be enjoyed together, without having to separate or split up across generations. Like Disney, service industries that discover opportunities to tap into the networks of senior consumers have the options of creating new offerings and tapping new revenues. Another company tapping into age 50+ markets is Saga based in the United Kingdom. Saga is dedicated to serving customers age 50+. Evolving from a direct marketer of vacations to senior consumers, Saga now offers a set of services ranging from a lifestyle magazine to financial services (investments and insurance), vacation travel, health products and advice, and radio channels targeted to the tastes of those of age 50+. Saga also enables its clientele to better manage and tap into their social networks. Saga.co.uk, its online portal to services for the age 50+ market, also has "community" features that allow users to search for old school friends, colleagues who have served previously in the army, etc., and allows for connections among those with common interests.

As these examples illustrate, it is important to understand the various changes age 50+ customers undergo as they get older. To really understand these customers there is nothing more valuable than a first-hand experience of the effects of aging as one tests one's ideas. As in the case of Saga, one way to simulate the experience is to create a sample of well seasoned travelers who can provide feedback on what is working and what is not. They can tell you where to focus your energy and which communities should be sampled? How to cater to age 50+ travelers? What are risks versus the potential benefits of serving this aging population? And in general, what are emerging challenges for marketing to both seniors and other segments as consumers as they increasingly participate in information exchange and increased mobility?

Aside from this, perhaps the most challenging purchase influence factors will be the personal relevance of products, services and communications. Will specific buyer values drive the stay at a national chain hotel versus a boutique hotel? When the customer's length of stay is long, their preferences undergo change. Developing scenarios based on observations and interviews of current travelers will help us understand likely factors that will impact their current and future lodging decision. Companies can then develop strategies for alternative outcomes and select appropriate responses as further information becomes available.

Neale Redington is National Partner in Charge of Hospitality for Deloitte & Touche LLP. He can be reached at or via nredington@deloitte.com

Neale Redington is National Partner in Charge of Hospitality for Deloitte & Touche LLP. He has been an advisor to major real estate firms for more than 17 years in the REIT and hospitality sectors. He brings opportunities for wealth creation to hotel owner/operators and management companies through performance of annual audits, operations reviews, due diligence procedures, and assistance with initial public offerings. Redington is co-author of the Hospitality chapter of the Real Estate Accounting Handbook. He frequently speaks on hospitality issues at trade events and with the media. Mr. Redington can be contacted at 213-688-4762 or nredington@deloitte.com Extended Bio...

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