October 07, 2016
Catering to healthier, wealthier silvers provides opportunities for travel, fitness and other leisure industries, writes Managing Director Deborah Weinswig
NEW YORK – The latest generation of senior citizens is proving healthier and wealthier than their predecessors, and they are spending ever more on experiences rather than on material goods. This is having a dramatic impact on the travel and fitness industries, says “The Silvers Series V: Leisure Services for Seniors,” the latest in a series of analyses from Fung Global Retail & Technology on the impact of the growing 65-and-over population on global economies, industries and retail.
The report examines the consumer spending patterns of seniors in the U.S., the U.K. and Japan, finding that seniors across all three nations allocate a higher portion of their consumption expenditure to leisure than the average person does.
“Seniors are increasingly willing to spend on experiences,” writes Deborah Weinswig, Managing Director of Fung Global Retail & Technology. “This is turning out to be one of the defining characteristics of the present generation of silvers.”
Seniors’ increased spending in the leisure industry, including expenditures on events, dining out and travel, is driven by two key factors: increased mobility and money. Between 2000 and 2015, nearly every region of the world saw an increase in life expectancy, according to the World Health Organization, likely resulting in a growing proportion of seniors able to lead more socially active lives. Meanwhile, Fung Global Retail & Technology research shows that senior households in the U.S. saw significant increases in their average wealth and income from 2000 through 2013, outpacing growth among younger demographics. In the U.K., baby boomers (those 55 to 64) saw the highest rise in income over the same period.
Seniors in all three studied markets allocate more of their consumption expenditure toward leisure than the average person. In the U.S., seniors allocate 12.5 percent of their total spending to leisure, compared with 12.2 percent for all age groups; U.K. seniors spend 23.2 percent on leisure compared with 21.0 percent overall; and Japanese silvers allocate 24.8 percent of their spending to leisure versus 24.1 percent across all age groups.
Silvers in the U.S. also are increasing their travel spending. Fung Global Retail & Technology estimates that U.S. households headed by consumers 65 and over spent $40.6 billion on travel-related activities in 2014, up almost 35 percent from 2010, although the number of households headed by seniors rose by just 19 percent during the time period.
“We expect growing travel spend by [U.S.] seniors in the coming years to be underpinned by the retirement of the baby boomer generation: we think this generation will take their interest in traveling into their retirement,” Weinswig writes.
In the European Union, senior travel also has increased: travel frequency among those 65 and over has grown at a faster rate than for any other age group. The number of senior travelers from Asia-Pacific countries is predicted to double over the next 15 years. Travel firms catering to senior tours have sprung up, while other firms will need to address this group’s needs and preferences, including their demands for accessibility; like-minded tour groups, access to medical facilities; accommodation of dietary restrictions; and options regarding the intensity and choice of activities offered.
Companies must also prepare for a greater participation in fitness activities among today’s silvers, the report says. More than half (55.2 percent) of Japan’s seniors engage in sports or exercise, especially walking. However, gym training is on the rise as operators such as Konami Sports Club and Curves target members aged 60 and over. In the U.S., Fung Global Retail & Technology estimates that the average leisure-time physical activity participation rate of U.S. consumers aged 65 and over is approximately 52.5 percent.
“As seniors’ contribution to the recreation and entertainment industry grows, retailers, service providers and other vendors must rethink the ways in which they promote their offerings, and maybe even widen their target audience,” Weinswig writes. “Silvers are willing and able to spend, and if providers of leisure services tailor their offerings to accommodate the needs of seniors, they stand to benefit from this growing consumer segment.”
The full report can be found here. This is the fifth report in Fung Global Retail & Technology’s “Silvers Series.” The first report focused on healthcare technology, followed by discussions of homecare and assisted living, technologies for the mobility constrained and retail reconfiguration. Other reports issued by Fung Global Retail & Technology include: “Gen Z: Get Ready for the Most Self-Conscious, Demanding Consumer Segment,” and “The State of Consumers in the US and China.” Fung Global Retail & Technology’s reports and analyses can be found at http://www.coresight.com and http://www.deborahweinswig.com. Subscribe for our daily news and analysis on retail, fashion and technology here.
About Fung Global Retail & Technology
Fung Global Retail & Technology is a think tank whose research team, based in New York, London and Hong Kong, follows emerging retail and tech trends, specializing in the ways retail and technology intersect, and in building collaborative communities.
The team, led by Deborah Weinswig, former top Wall Street and retail tech analyst and startup advisor, publishes ongoing thematic and global market research on topics such as the Internet of Things, digital payments, omni-channel retail, luxury and fashion trends and disruptive technologies.
More information can be found at www.coresight.com.