With the largest population demographic now the Baby Boomers entering retirement, travel brands need to plan for the future that awaits, not the customers they have.
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Groundswell Of Older Travelers
The Baby Boomers, growing up in the 1950s and 1960s were born between 1946 and 1964. This demographic is among the largest portion of the US and global population it’s ever been and has created a bulge at the top end of both the financial hierarchy as well as age categories. Baby Boomers are retired or retiring soon and have more resources than younger generations.
“Boomers open their wallets wider than any other demographic when it’s time to plan travel. The website Insure My Trip broke down spending habits and found that boomers, on average, spend $6,700 for their vacations, taking an average of 16 vacation days. Millennials spend $2,000 less and take an average trip of 15 days. The best example of the digital nomad can be found with Gen Z, whose members spend about $3,200 for travel, but their average trip length is 23 days.” – Boston Globe
Baby Boomer travel trends are more about conquering bucket lists and relaxing destinations in luxury travel experiences.
For the older section of the set we find boomers aging out of more aggressive travel plans. Still, travel brands have been smart to target the generation as Baby Boomers spend 2:1 over Gen Z and more than three times that of Millenials, often their children or grand children. And that swell will continue for a little while but not forever.
Some travel brands focus on catering the wants and needs of this generation while others have migrated their approach elsewhere. It’s the former for which this piece will focus.
Large Drop-Off
The danger in the approach of the past 20 years is that travel brands have positioned themselves to reap the rewards of this demographic but will lose a substantial portion of their customer base as it falls off dramatically in the years to come. No one wants to see themselves as older and it’s clear travelers will avoid brands that are perceived as too old for their generation rather than avoid brands that are too young for their generation.
However, departing from the current marketing and branding risks alienating the largest, and highest spending demographic.
Travel Brands Plan Their Response
Brands that have catered to an older clientele risk alienating the remaining Baby Boomers seeking a more traditional product. Some of these brands have candidly discussed in the trades that they are enjoying their best sales periods to-date but it’s clear that it cannot and will not last.
Many are at an inflection point, whereby they must decide if they are to continue marketing a product focused on mature offerings, or pivot to a younger, fresher approach. Brands that don’t plan for the decline will see their business fall which leaves less budget to reinvent themselves when they need it most. But abandoning altogether a market that has served them well for so long and is not yet completed their purchases is foolhardy too.
Because the drop-off from Boomers will reduce the number of eligible clients, brands must expand further down the demographic strata to avoid shrinking.
How does a brand focused on a mature client set now prepare for the incoming younger crowd? One brand’s top search terms tells why attracting younger audiences is dangerous:
- Is [brand] for old people?
- What’s the average age of [brand’s] customers?
That brand can focus on squeezing every last drop out of the older market, or it can start now with a refreshed younger focus. The marketing they are using is aligning the brand with an older demographic.
When I think of top luxury products from storied brands, it’s often their history that adds to their caché. The Peninsula hotel still picks up clients in Hong Kong with its Rolls-Royce fleet. The Savoy, and Ritz-Carlton are brands that have been around for a long time but continue to resonate with a new audience.
There’s a reasonable fear that to appeal to a younger generation, a brand has to go the way of W hotels with a DJ in the lobby, and snarky pillows (which many industry insiders quietly talk about feeling very 90s at the moment.) How do you capture a generation of upper 30s to lower 50s that doesn’t make them feel like they are visiting their parents in a 55 and older community but without abandoning that current audience?
From my viewpoint, the right approach is a gradual step down that continues to make your current guests feel at home while updating the product, service, and marketing to appeal to a slowly younger generation. Don’t do away with elements of service entirely, but maybe it’s time to update the ads, the design, the restaurant hours.
One industry leader I spoke with fully recognizes that their brand must change or it will die, but knows how it would in essence be the same thing to radically shift their model while so many older consumers continue to frequent the brand. Straddling the future with one foot in the past is a delicate balance, and some brands might be best suited to rip off the bandaid and hope the current customer base continues to frequent the brand. They can do some of this by marketing on social media channels where their clients don’t live, allowing them to have one message to their current clientele, while a new market sees a whole new side to the brand. That said, the products themselves have to change too and that’s likely the hardest part.
Fortune favors the bold, but there’s also a branding graveyard filled with reinventions that were the wrong move even if it was the right time. Not every company can be as lucky as Coca-Cola was to live through their own “New Coke” moment and survive.
Conclusion
As demographics change, brands will have to adapt. Picking the right time and approach will be challenging but something many will face. How they manage that transition from who buys their products now, to who they will need to have as customers in the future will decide the winning and losing brands for years to come. Failing to adapt could lead to a Howard Johnson situation, falling from more than 1,000 locations and a symbolic symbol as a hallmark of American road trips, to 30 locations and a symbol of failure. Using social media and traditional media to speak to the two markets with different messages might be the best way to straddle this unique time in history and carry travel brands into the future.
What do you think?
Ah the selfish baby boomers, who have ruined everything from the economy, to politics, to just about everything else for all those that followed them.
A better question to me is “what would make Boomers stop spending money at your brand?”
Can you lose them? I don’t think you can lose them. Businesses would be wise to stop trying to woo Boomers, and target younger travelers now. If it means Boomers are forced to change some of their habits, so be it. While those opposed to tech and change may be the loudest, they’re not the majority. Industry disruption will come from Gen Z and younger millennials. Legacy brands should acknowledge that.
It will remain true for years (think the next 25) that the more well-off, and more leisurely, older groups will be the spendy ones. This isn’t a generational thing, it’s simply demographics. The “no one likes to think of themselves as old” is only true for a certain demographic that isn’t going to be spendy, leisurely (think 14 to 21 day luxury trips) ones anyhow. I just went on a trip with friends (14 days) and one of them said “I don’t know why more young people don’t do this…she’s in her late 30’s) and everyone within earshot laughed and we all started talking. The reason is, they neither have the time nor the money, especially the money. So while many people would look at the trip we took as being aimed at an older audience, the younger people who were on it were THRILLED with it. So it because a referral thing. As ANY demographic gets older they want certain things…no kids, no casinos, guides, upscale accommodations, etc. After you’ve worked and raised kids, who wants giant waterslides? I don’t see major changes needed at all, just tweaks for on-going changes in sensibilities. But face it. We all get older and then, we all pretty much want the luxury and ease that comes with saving during our lives that goes along with it
@Marcus … a giant waterslide for you .
“ The website Insure My Trip broke down spending habits and found that boomers, on average, spend $6,700 for their vacations, taking an average of 16 vacation days. Millennials spend $2,000 less and take an average trip of 15 days. The best example of the digital nomad can be found with Gen Z, whose members spend about $3,200 for travel, but their average trip length is 23 days”
Who the F is taking 15-23 days trips on average? Do they only go once or twice a year or where are they going? The top places in the US for average vacation days like Vegas are 3.4 days, Orlando 7.2 days, NYC 5.5 and LA including close cities 4.8.
These sound more like annual numbers, not per trip.
You make some valid assertions. I’m early Gen X and my wife is late Gen X so we’re kind of in the middle from a variety of perspectives. I normally choose our hotels and I strenuously avoid “lifestyle” brands. I need a desk in my room and don’t want a tiny room that drives me into the lobby for the Tuesday craft beer happy hour or foosball tournament. Sure I like having a bar – ideally with a restaurant as well – but I don’t feel some compelling need to socialize with other guests.
There will have to be some kind of transition as boomers age out. Maybe turn some of the restaurants into more social areas, serve coffee in the lobby, etc. that the younger people want. This pivot will be particularly difficult for high end hotels but I have confidence in the hotels ability to make money in the long term.
Howard Johnson is an interesting example. I wasn’t aware it was a “boomer” or Greatest Generation “brand”. I associate “branding” typically with trying to charge a markup for people to feel “cool” and in the “herd”.
I’m probably not the kind of person this works on. I buy store brand cereal and soda (I can’t imagine spending $2.50 on a 2 liter bottle of coke or pepsi).
Hospitality should always be evolving with consumer desires and interests. Remember, Eloise at the Plaza started out as a nightclub comedy act for adults and “grew up” into a $1,200 + night room for kids and $ 150 afternoon tea. Make good memories for the children and future generations will keep coming back. Disney too has had success with this formula.
Excellent and timely article, Kyle.
I’d read an article last weekend (Fortune paywall/free article limits) so here’s the Yahoo link
https://finance.yahoo.com/news/meet-81-old-ceo-built-111700661.html
This article highlighted the age of the cruisers on Viking ships, and the targeted audience that they are ‘banking on’ for the next decade plus. We were in France and Belgium last month, ran across their tour groups in Strasbourg and Bruges…and I did indeed google “average age of Viking cruise passengers” and the response was 70. Let me tell you, most of the cruisers were hunched over and OLD. Slow, too. Which manifested itself during tours throughout our trip
As far as the Ritz, Gary at VFTW had a pretty decent commentary with several inputs agreeing that RC are living on their laurels, and not really current luxury lifestyle hotels.
FTR the trips we have taken over the past 5 years have ranged 10-21 days, at least 2 trips per year. The ‘Insure My Trip’ folks phrasing is a bit weird. More FTR, my wife is part of the tail end of boomers, I’m at the first couple years of Gen X.
I’m 3 months shy of being a boomer and I generally identify more with that age group than most of GenX. I now take 2 week-long ski trips + a long weekend ski trip as well as a two-week international trip each year. I have been going on Viking cruises for several years now (5 so far, 1 already scheduled for next year) and agree with the the average age of 70. Some of the tours on a particular cruise will have a “leisurely group” for those who don’t move as quickly but by and large I’ve not had an issue with the tours moving too slowly. The Viking ocean-going (or Med Sea-going) ships had a lot more folks under 60 than I’ve encountered on the river cruises. But I love their no kids policy, free wi-fi and a tour included in every port so I don’t feel nickeled and dimed to death. Plus some of those older folks have interesting lives and fantastic stories to tell so I always learn something new from them!
Meanwhile, I am at a Thompson in Texas, a $500 a night hotel, and being in my 50’s I’m the oldest person here. Most are in their 20’s and 30’s, packing the bars and rooms, and throwing money around like crazy.
As such, I am completely perplexed as to what this post is even about. There is more wealth in the world now, spread around multi generations, than ever in history. This is not just baby boomers, it’s across the board. Gen Z is not interested in the Savoy. Nor the Pen. Boomers are. But the money being exchanged is the same or close.
This post is a pontification that is way thinking too much. And somehow trying to lay blame for the lack of free and exclusivity for nothing. Take a look around Kyle, high end lifestyle brands are packing in big spending 30 somethings like there is no tomorrow.
Y’all blame generations. But what is it you actually want?
Ah, yes, free.
That’s what you’re angry at. Hey, I like free as well. I complain to myself when I can’t find a free J or award room or upgrade at Park Hyatt Vienna.
My suggestion? Work harder. Try harder. Dig in.
I’m not blaming any generations at all. This is about brands that are currently catering to Boomers and have built their businesses to a certain style and size. When the Boomers stop traveling, the size of those businesses will be wrong if they stay in their current model focused on mature guests. They need to either transition to a younger crowd to remain at size, but that comes with risks of alienating Boomers who are traveling right now, or they must scale down their businesses to accommodate for coming lower demand. They can’t continue on as they are.
As to your stay at the Thompson, great, but this is also kind of the point. It might be easier for some brands to focus on a younger generation and find mature customers who will enjoy some of the benefits too, rather than focus on a mature market and hope younger generations will embrace it.
Several other commenters mentioned Viking with an average age of 70 – the size of their business today can’t remain the same. They won’t have enough septuagenarians to maintain their current business model going forward. The question these leaders are asking themselves and their teams is: do we alter the business now to cater to a younger crowd that will keep our business the same size and carry us forward but risk the current customers we have? Or do we wait until the impending drop-off to adjust the product?
Kyle, you are really not understanding brands adapting to generational changes. Some fail, some succeed. As well, you are not understanding that every generation becomes a boomer. And with this brands like Pen etc will be there for them when they do. Trust me, you will also change with your needs over the years.
I recall an interview with Isadore Sharp a few years ago done in his office in Toronto. He took the journalist to the window who had asked him, “Why is Four Seasons so successful?” He pointed out the window to everyone down below and said, “Because we don’t build our hotels for them.”
Some brands build to capture those with wealth. Which is usually associated with age. Let’s hope that your generation achieves that same wealth. Likely will as they are far more “luxury” oriented that I was in my 20’s….A time when I was often sleeping in my Subaru Outback. I promise you that with the success and wealth your generations build that millennials and Gen Z travelers in 20-30 years will want more Four Seasons and far less Thompson. Yes, I prefer Four Seasons now as a Gen X. Yes, me, the same person that was in the mosh at Pearl Jam concerts in 1990.
See? Isadore Sharp was right. What he was really saying was that at some point you will reach the success to prefer Four Seasons over W. We are ready for you when you are.
As to your claiming you are not blaming generations, well, read your title. You click bait a title like that and you own it, despite what you try to write later on.
Yes, yes, you’ve shared the Four Seasons story before. What you decline to acknowledge or understand is that the Boomer generation is far larger than the others that follow behind it. We are halfway through Boomers retirement to travel cessation right now, perhaps even a little more than halfway. Because this generation is larger than future generations, and they spend more, when they are no longer traveling there will be a tremendous void.
Let’s take a look Viking for example, they had 76 vessels in 2019 and itineraries all priced fairly high. When Boomers have all but stopped traveling, either due to perishing or mobility concerns, the next generation is smaller – so you don’t need 76 ships and can’t fill them, and the next generation doesn’t spend as much, so what you can fill is at a lower price point. That could mean Viking is half the size it once was and at lower margins, that’s enough to sink a brand. The only way to avoid falling off a cliff, is to start marketing across multiple generations (end of the Boomers, Gen X, and Millennials) but that does mean that Viking would have to abandon their entire business model right now. That’s what brands like Viking are struggling with and will have to make hard choices to counter in the coming years.
I’m not blaming any generation for anything. I’m stating that, like the pilot crisis, we are coming to an extremely slow train crash but there will absolutely be an end to this and what brands do now will form which brands stay and thrive and which do not.
Who cares about 2000 room hotel ships? They deserve their demise if it happens. And if they can’t sustain after boomers die off I’m sure we will all be just fine.
Let me give you my own evolution of hotel “loves” as an example
20’s: I was happy for any clean motel or a sleeping bag
30’s Fell in love with Ian Shrager hotels and soon after W.
40’s Was leaning into mid luxury hotels like Park Hyatt and dabbling with a few higher end luxury brands
50’s Realized I hate the middle and was either going dirt bag or opting for quality lifestyle hotels , yet always seeking a preference for more luxury hotels. What I hate are standard Mid brands like Regency or Marriott.
I predict for my 60’s I will be all in towards luxury OR opting for really cheap and authentic. One or the other. No middle.
See? Don’t be a brand for everyone. Be a brand for the evolving needs that really do develop as you age. Luxury brands don’t care about you at your age. They don’t need to. They want to cater to you later.
The hotels for “old boomers” will still have strong demand if they are iconic or social media eyeball grabbing places.
And at some point the boomers “aging in place” will move on and the their old houses will come on the market and help make housing more affordable for the younger generations that have been given the short end of the stick by a system that ended up stacked heavily in favor of “old boomers” and left the younger generations paying for it directly and indirectly. Think about this: there are washed up and retired city/county/state criminal defense attorneys in some parts of the country who are getting over $200k per year in retirement income as a former city/county/state criminal defense attorney; and washed up and retired police getting over $125k per year in retirement income. And most of those “old boomers” didn’t come out of school with huge student debts and facing high housing costs to live independently of their parents. Sure, back then formal unemployment was higher and the female participation rate in the labor force was much lower than today but for the vast majority there was an upward social mobility opportunity like never before in the country and the quality of life in terms of material goods improved tremendously for the average “old boomer”.
But “old boomer” will be replaced by a more diverse global demographic, and so these places will fill up with more and more younger people from across Asia, Africa and Latin America.
I think you give us more credit (and criticism) then we deserve.
As a back end Baby Boomer, I find the majority of my co-patriots in some degree of financial difficulty. Many are taking SS as early as possible. Or, deeply in debt and hitting the reverse mortgage route. Gig work like Lyft and Uber is discussed in detail at get togethers. Helps pay for those large SUVs we bought several years ago.
IIRC, the funeral home business was banking on a windfall of revenue as the Baby Boomers petered out. The last few funerals I’ve attended have been minimal grave side affairs. The new trend is the use of the funeral home pallor for an hour or so as the ashes of your buddy sit in an urn from the flower shop. A picture, some stale coffee, sign the book, off you go. Having your obituary listed in the paper for $300 is passé. Posting on Facebook is quick, cheap, and easy.
Also, based on my nieces and nephews, a vacation “experience” is their main goal. My generation was excited to stand in line at the Louvre for an hour to see the Mona Lisa and eat at a Paris cafe. I think you are comparing apples and oranges. Each generation has their own wants, goals, and desires. If the travel fails to recognize this, then they deserve to fail. Nothing new here…the nature of economics and business.
I don’t think the hospitality industry is facing down any great generational crisis/inflection point.
People of all generations like luxury. Right now, it’s mostly boomers who can afford it. As younger generations build their own wealth, and receive transferred wealth from dying boomers, they’ll backfill the void being left by the dying-out boomers.
Bottom line: The elements that make a hotel luxurious and desirable are not viewed all that differently across generations.
Given what upscale and luxury hotels seem to be charging in the country and around the world, there seems to be no shortage of money chasing experiences at such properties.
I myself have migrated some of my hotel stay business to home rentals or vacation home stays. Better value and more space for my money that way, and the connections I get from such rentals are more valuable than that provided at hotels which have gone into being “get the same or less for way more money” while being treated like an easily replaceable commodity.
I don’t understand the hate, and I am prepared to shift my travel spending habits accordingly if the ‘Baby Boomers are Evil’ sycophants continue alienating a global demographic that 1) loves to travel; and 2) has tons of money to spend!
The stupidity of these corporate travel managers / consultants who want to dump a baby boomer couple spending $20K on a vacation in favor of a woke millennial who spends $2K. That is very bad math. Might I suggest that you take a course called Math 101 before you alienate all the boomers and their travel wealth walks away (for good) from your failing new hipster brand?
There really doesn’t seem to be much alienation of “old boomers” going on in the travel industry. If anything, that the “old boomers” are spending money like crazy on travel and way more per person than other age groups speaks to just that: no real sense of alienation because there is no actual alienation intended nor showing in the spending habits. If anything, the alienation comes in the pricing — and the pricing is crazier than ever. If hotel/resort prices were stock prices, it’s the roaring ’20s and the market has done anything but collapse yet.