Member Article

The overlooked generation: A profitable demographic neglected by the North East hospitality & leisure industry

New research released today by Barclays shows that people 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, the ‘An ageing population: the untapped potential for hospitality and leisure businesses report’ from Barclays Corporate Banking, reveals that the UK Hospitality & Leisure sector, including businesses in the North East, is missing out on at least a further £16 billion in additional revenues by underestimating the spending power of the older generation.

In fact, research indicates that businesses in the hospitality & leisure industry based in the North East are not planning to make the most of this untapped opportunity. Nine in ten (92%) businesses have no plans to introduce any products or services aimed at the over 65s with over two thirds (64%) indicating that they feel they have already put enough measures in place.

In the North East, no 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 not even one in 10 businesses (8%) ranked over 65s in their top three target age groups, compared to one in five (22%) in the UK as a whole. Instead, 45% of businesses saw 35-44 year olds as their priority target market, even though these consumers report to spend less money on average on the sector.

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, 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.

Brian Thorpe, Head of Corporate for Barclays in the North-East, said: “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 £16 billion.

“In the North East, we have found that 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 ageing population, ensuring they are able to meet and capitalise on the increasing demand.”