From Pyramid to Pillar: Opportunities Abound in the Baby Boomer Market

By Bonnie Knutson Professor, The School of Hospitality Business/MSU | February 10, 2019

I'm a nerd of sorts. Especially when it comes to numbers, statistics, data, and algorithms. I suppose part of it comes with just being a PhD. After all, a doctoral degree is, in essence, a research degree. And research essentially means a lot of numbers. But my interest in data probably stems more from growing up in a family business whose success depended on numbers. Customers. Sales. Inventory. Costs.

I can still hear my dad telling me that if you don't understand the numbers, you can't understand people. And if you can't understand people, you can't succeed in business. Dad only had an eighth-grade education, but he graduated with honors from the school of hard knocks. In other words, he had what we call street smarts. He got it.

Years later, management guru Peter Drucker told us the same thing in a different way when he supposedly said that "you can't manage what you can't measure." Actually, what he really said was that if you can't measure it, you can't improve it. Or as American statistician W. Edwards Deming quipped, "In God we trust, all others must bring data."

Given this background, then, you can see why I'm somewhat of a numbers nerd – especially when it comes to demographics. I still hear you, dad. I want to understand the numbers, so I can understand people. Consumers. Guests. So, it probably isn't surprising that one of my "go-to" websites is the U.S. Census Bureau, particularly the pages that look at projections of the population.

Not long ago, on one of those first chilly evenings when you know winter isn't far away, I was clicking away on my laptop when I came across of graphic on the U.S. Census website that put a lot of data into perspective. The title of the graphic was From Pyramid to Pillar: A Century of Change, showing the difference in demographics between 1960 and 2060. It was one of those Ahah! moments that brought into focus the dramatic transformation that is taking place in the U.S. population. And in some ways, in other developed countries across the globe too.

What really hit me, however, will happen in 11 short years from now when our population reaches a tipping point. For 2030 will mark the moment when all baby boomers will be at least 65 years of age – pushing that pyramid into a pillar. Think about this: 20 percent of our population will be of retirement age. That is one in every five. Jonathan Vespa, a U.S. demographer, puts it this way: "The aging of baby boomers means that within just a couple decades, older people are projected to outnumber children for the first time in U.S. history. By 2035, there will be 78 million people 65 years and older compared to 76.7 million under the age of 18." (And you wonder why social security is called the "third rail" in politics?)

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.