69% of hospitality and leisure businesses in Yorkshire have no plans to introduce any products or services aimed at the over 65s, despite it being the highest spending generation for the sector.
New research released today by Barclays shows that the over 65s added £37 billion to the UK economy through spending on the Hospitality & Leisure sector in the last year. This contribution equates to over a third (36%) more than the average consumer and 27% higher than the 35 – 54 year olds who are the second biggest spending generation.
Despite this, theAn overlooked opportunity: Realising the potential of an older demographic report from Barclays Corporate Banking, reveals that the UK Hospitality & Leisure sector, including businesses in Yorkshire, is missing out on at least a further £16 billion in additional revenues by underestimating the spending power of the older generation.
However, businesses in the Hospitality & Leisure industry based in Yorkshire are not planning to make the most of this untapped opportunity. Almost seven in 10 (69%) businesses have no plans to introduce any products or services aimed at the over 65s with over half (51%) because they feel there is little financial opportunity with this age group.
Sector must innovate and re-focus to capitalise.
In Yorkshire only 3% of businesses within the sector see the “overlooked generation” (those aged 65 and over) as the most important demographic in terms of sales and revenue for their company. In fact only 30% ranked over 65s in their top three target age groups, compared to one in five (22%) in the UK as a whole. Instead 35% of businesses saw 35-44 year olds as their priority target market.
Without action, this missed opportunity is only set to increase in line with the UK’s ageing population. The total annual spend of over 65s could grow to at least £57 billion by 2025*3, based on the projected 34% growth in the population of over 65s. This could be even higher considering the increased mobility and active lifestyles the over 65s are now living.
Debbie Mullen, Head of Corporate for Barclays in Yorkshire, said:“It is clear from the Report that the over 65 age groupis a huge and untapped opportunity for the Hospitality and Leisure Sector within the UK. There appears to be a gulf between the perception and reality of the spending power of over 65s. By not fully focusing on the needs of this generation, and the revenue growth opportunity they represent, businesses may risk missing out on their share of £16 billion.
“In Yorkshire we have found that almost half of businesses in the sector expect that the proportion of their turnover generated by over 65s will increase over the next five years. Yet very few businesses are planning to introduce any products or services aimed at the currently ‘overlooked generation’. By investing in targeting these customers now, businesses can pre-empt the effects of an aging population, ensuring they are able to meet and capitalise on the increasing demand.”
Investment within the industry
The report also reveals that the vast majority of hospitality and leisure businesses are planning to invest in their businesses in the next five years. More than nine in 10 businesses (97%) are planning to invest money in the next five years and 26% are planning a major investment. 23% of the planned investments will be used to meet the needs of the over 65s.
Research and booking: a digital pursuit
With less than one in 10 (8%) over 65s visiting travel agents in shops when looking for information on products and services, the use of digital tools is becoming increasingly important for over 65s planning their leisure time. When looking for information on products and services the first port of call for the over 65s is the internet. 58% of over 65s use search engines, 35% of them turn to online customer reviews and 15% use online travel agents.