According to new research from Barclays Corporate Banking, over 65 year-olds added 37bn to the UK economy through spending in the hospitality and leisure sector last year. However companies missed out on at least a further 16bn in additional revenues by underestimating the spending power of the older generation .
It found that just five per cent of businesses in the sector see the overlooked generation of over 65 year-olds as the most important demographic in terms of sales and revenue despite ever more active and sociable grandmothers and grandfathers spending 3,372 per head every year. Thats 27 per cent more than the next highest spenders 35-54 year-olds.
Over a third of businesses see those aged between 34 and 44 as the main target market, with over three-quarters having no plans to introduce products or services to specifically target over 65s.
It is clear from the report that the over 65 age group is 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 16bn this year alone,” said Mike Saul, head of hospitality and leisure at Barclays.
“We have found that almost two-fifths of businesses in the sector expect that the proportion of their turnover generated by over 65s will increase over the next five years. Yet more needs to be done to start planning and accommodating for the currently overlooked generation . By investment in targeting these customers now, businesses can pre-empt the effects of an ageing population, ensuring they are able to meet and capitalise on the increasing demand.
Read more about spending patterns:
- UK online shoppers to spend average of 1,174 each in 2015
- British women spending 460m per week online
- British hospitality sector thrives as consumers increase spend on hotels
The report shows that not only are the over 65s bigger spenders than the younger generations, but are also more loyal to a particular firm.
The use of digital tools is also increasing in importance with this age group when planning their leisure time.
Of the over 65s, 58 per cent use search engines, 35 per cent turn to online customer reviews and 15 per cent use online travel agents.