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Silver Economy: senior citizens have not yet said their last word

Despite all the attention being paid to the newer Y, Z and Millennial generations of all stripes, it is also important to not lose sight of the “baby-boomers” who continue to make up the core of hotel clientele. Sure, they are getting older; they have definitively joined the category of seniors, including the younger ones, but they are far from having lost buying power and their appetite for travel. On the contrary! However, just as the young generations are easily distinguished from one another, senior citizens are also far from fitting a mold. From the still active manager to the young retiree, from the “old” couple that no longer has family expenses to the group of perfectly fit seventy year olds… there is a whole series of well-identified sub-categories with very different means and desires. They are, nonetheless, all more or less influential actors of the “Silver Economy” which represents a particularly interesting market for the tourism industry.

The figures speak for themselves. According to recent forecasts from Insee, the number of French people over 60 years old should reach 21 million in 2035, and be close to 23 million in 2050. In 2015 they were “only” 15 million, indicating 40% growth in 20 years. In 13 European countries (Germany, Belgium, Denmark, Spain, France, Italy, Portugal, United Kingdom, Hungary, Poland, Czech Republic, Slovakia and Romania) subject to a recent survey by the Observatoire du Cetelem, a consumer credit specialist addressing the age groups of 50-59 years and 60-74 years, they represent 59 million people (14 %) and 67 million people (15.5 %) respectively. In the upcoming years their respective demographic weight will grow: from 39% today, the over 50s will represent 44% of the population in 2030, and 46% in 2050 (source: Eurostat).

And yet, the progressive aging of the population is not uniform. It is necessary to take into account the pyramid of ages in each country. In France, for example, the shortage of births during World War II limits any increase in the population over 77 years. The years until 2020 will be the golden age of the oldest baby boomers, or those reaching 70 years of age. Thus, in the short term, it is better to invest in senior citizens residences than in retirement homes.

This demographic map shows the ongoing need to adapt society to its living conditions, however, before they become dependent, the actors in the Silver Economy are consumers with significant buying power. According to the same study by the Observatoire du Cetelem, the revenues of 50 – 75 year olds are 17% higher than those of the rest of the population. In France alone, the weight of fifty-somethings and their elders in everyday consumer spending is more than 50%. This deserves a bit of attention, although not all senior citizen were created equal when it comes to vacations.

In terms of purchasing power, inequalities persist after retirement. In France, a study by Credoc suggests that:

  • 59% of 60-69 year olds and 47% of 70+ year olds have traveled for at least four consecutive nights on holiday in the last 12 months.

  • 52% of 60-69 year olds who say they do not expect to travel on vacation any time soon did so for financial reasons. 30% of them say this for personal reasons, while 34% say so for health reasons, and 13% for family-associated reasons.

  • Among 70+ year olds, 31% mentioned financial reasons and 40% claim it is their choice not to go on holiday, while 46% have health reasons and 16% family-associated reasons.

Well-to-do young retirees are thus much more susceptible to leaving on vacation than their older peers. Moreover, French 60- year olds are more likely than those younger to have a secondary residence, and, thus, are less likely to stay at hotels and other commercial accommodations. They spend an average of €400 per person per week and favor travel during the off-peak season.

However, they may be more reticent regarding the sharing economy: 61% on average in countries included in the Cetelem survey have a positive opinion (76% in France) of it, versus 73% of the rest of the population (84% in France). For example 8% of senior citizens opt for car-sharing versus 15% of those who are not senior citizens; in terms of apartment sharing, the figure is 3% of senior citizens, versus 9% for others; as for sharing services these figures are 4% versus 10% respectively. While they are undoubtedly less autonomous, the Silver Generation is more attentive to the availability and quality of service.

However this does not mean that behavior is radically different from one generation to the next. Globalization, mimetics, a more systematic diffusion of information all contribute to the process of consumption. This experiment shows that the generation gap is not as wide as we could have thought.  21st century senior citizens only resemble their elders from the previous century when seen at a distance. Fairly quickly the “Silver Generation” has been adapted to new technologies. The transfer of skills works both ways among younger populations. Children and grandchildren are quick to teach their parents and grandparents the joys of Internet, how to shop online and to participate in social networks. Analyses of the senior citizens segment show a strong, solidary dimension in their behavior, intergenerational familial solidarity and solidarity in learning. “There has never been so much reciprocity between generations,” explains Serge Guérin, sociologist and author of La guerre des générations aura-t-elle lieu ? (Calmann-Lévy, 2017). “Many less-young people are learning from younger people and vice versa. Everything does not come to an end the day one retires, many entrepreneurs create their business when they are over 50. Others participate actively in the organizational fabric and assume a new, very useful role in society.”

The European study by the Observatoire du Cetelem confirms to what extent the Silver Generation has familiarized itself with the rules and codes of digital consumption. Close to 2/3 of senior citizens surveyed claim they make regular purchases of at least one product online. Digital sources are ending up being the primary purchasing channel for leisure activities in particular followed by travel, with a characteristic that deserves examination. For those 50 and over, consumption must not eliminate social ties and personal contact with sales people. Reassurance is an important aspect in the purchase of a holiday, a tour, a hotel. Human contact remains central to the experience leading up to the purchase.

Cautious about making the right choice, senior citizens are a favorite target for comparison websites. 75% of those questioned for the Cetelem survey say that they look for information on specialized sites, while the two-thirds of that population regularly use price comparison websites, with more than half carefully reading comments left by previous customers.

Should it be deduced that the Silver Economy may fit a channel with specific offers? To do so would be to misunderstand the behavior of senior citizens who do not consider themselves part of a category in and of itself. Mass distribution tried to do so and quickly gave up developing stores specifically addressing senior citizens; one example of this is the Austrian chain Adeg Aktiv Markt 50+, which stopped its activity. This does not mean that senior citizens do not have different priorities when they select their purchase. Observers believe that between now and 2025, the date that will mark an acceleration in the aging of the population, sectors linked to wellness, discovery and tourism will be at the top of the list for “young senior citizens”. Many are in relatively good physical condition and refuse to limit their activities: on the contrary they want to enjoy more free time to live experiences and continue their recreational activities as long as possible.

The word ‘experience’ assumes its full meaning. More than the other generations, the desire to learn, to test, to discover, to experiment is stronger among senior citizens than others; they are more inclined to take advantage of a well-earned break after months of work. This attitude is summed up by market analyses as follows: from beach to museum, less shopping and more culture. Vacation means privileged moments to discover and practice cultural, fun, athletic activities for new experiences, while often adding an intergenerational aspect or at least social connections.

Thus, vacation is a unique opportunity for grandchildren to share privileged moments with their grandparents. An Ipsos survey entitled “Voyager avec ses grands-parents” (travelling with grandparents) shows that France is one of the countries in the Mediterranean where grandchildren spend the least amount of time with their grandparents, leading to a desire later on to bond with them and share memories during travel and vacations shared with one another.

And yet, a parliamentary report presented to the former Minister of Tourism, Matthias Fekl in 2016, deplores the fact that tourism professionals have not sufficiently taken the potential of this market into consideration, aside from two sectors that believe senior citizens are a priority group: coach tour operators and cruise operators. Christophe Bouillon, socialist party representative who authored this report, insists, however, on their role in the tourism economy. “In France, close to one third of nights are booked by people more than 62 years old. These same seniors spend 22.2 billion euros on travel in France (88%) and on international travel.” It may be observed that for most part tour operators, the word senior is associated with accessibility, which may be a somewhat limiting way to see things, although it certainly plays its role.

The report mentions 17 recommendations "to make France an attractive destination for tourists who are senior citizens," including the launch of promotional operations," that are clearly designed with “senior citizens" in mind with images of people over 55 years old in advertisements. It also suggests creating financing tools for holiday travel for older people in order, for example, to improve low season occupancy at tourism properties. It is surprising to see that few hotel groups have developed commercial offers addressing senior citizens, during the off-peak season, for long stays, and for trips with blended family… While imaginations run wild to attract millennials, they are far too reserved when it comes to attracting grayer generations…. 

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