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Hospitality and leisure operators in the UK could be missing out on £16bn of additional revenues by underestimating the spending power of the over-65 age group.
This is according to a new report from Barclays which found that the “overlooked generation” contributed £37bn to the UK economy through spending on the hospitality and leisure sector in the last year.
It is estimated that the over-65s are the highest spenders on hospitality and leisure in the UK, with the average person spending £3,372 per annum within the industry.
Barclays found that this contribution equates to over a third (36%) more than the average consumer and 27% higher than the 34 to 54-year-olds who are the second highest spending generation.
Despite this, just 5% of businesses within the sector see over-65s as the most important demographic in terms of sales and revenue for their company, only one in five (22%) businesses ranked over-65s in their top three target age groups.
While a significant number of hotel and travel businesses are aware of the fact that over-65s spend more per customer than any other group, more than a third (37%) of businesses in the sector see 34 to 44-year-olds as their priority target market.
Furthermore, more than three quarters of businesses (76%) have no plans to introduce products or services that specifically targets the over-65s. Of these, 37% have not even considered targeting this age group and 28% see little financial opportunity in catering to them.
The report said that 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 £57bn by 2025, based on the projected 34% growth in the population of over 65s, according to the Office for National Statistics (ONS).
Mike Saul, head of hospitality and leisure at Barclays, said: “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 this year alone.
“More needs to be done to start planning for and accommodating 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.”
