Why the Grey Pound is key to a Brexit travel nation19/08/2016 By Max Clapham
Do today’s empty nesters (over 55, no dependent children) really have more time on their hands, or do they simply prioritise life better?
Either way, when Britain’s silver generation skewered their children in the 2016 referendum (57% of 55-64 year olds and 60% of 65+ year olds voted Brexit, according to the usually reliable Lord Ashcroft polling data) they did so by taking the time out to turn up in significantly larger numbers than the young.
They have also been taking more time out to go on domestic holidays. In the first half of this decade, empty nesters were the only life-stage taking increased domestic overnight trips according to GBTS.
So, if Brexit has reinforced a view of empty nesters as property-rich, small-minded, grey Little Englanders (and it’s a locally expressed view in tourist destinations across Europe, if my Mum’s recent holiday to Spain is any indication), it is one worthy of greater scrutiny.
What is not in doubt is that in today’s more uncertain situation the Grey Pound represents a powerful economic entity - one the domestic travel industry is minded to cultivate to the full, as forces, including Brexit, combine to put many off overseas travel.
Many observers have talked up a short-term boost to both domestic and inbound tourism provided by Brexit.
However, the longer term picture requires more strategic thinking. This is where the Grey Pound of the empty nester becomes much more important currency. Clearly, not all British empty nesters are property-rich, small-minded grey Little Englanders, and nearly half (including my Mum) voted Remain in the 2016 referendum; travel motivations, attitudes and behaviours vary widely.
By 2024, over 55s will represent a third of the UK population (22.6 million - ONS). Many remain pressured, with university fees, boomeranging children and care for grandchildren all playing a part. Generally though, they have greater financial flexibility than generations before them could have wished for. Freedoms provided by the 2015 pension reforms mean that many empty nesters can enjoy a level of disposable income and wealth greater than younger life-stages. In 2016, 300,000 lump sum withdrawals were made by over 55s from their pension pots at an average of £14,500. One of the most common reasons for withdrawals..? 'To travel'!
This is a significant audience for many of BVA BDRC’s Travel, Tourism and Leisure clients.
One organisation keen to unpick the travel mind of empty nesters is the National Coastal Tourism Academy (NCTA). For the NCTA, developing coastal products, brands and marketing to cultivate the silver economy beyond peak summer periods is key for genuine long term benefits to come out of the current economic and political uncertainty.
The English coastline provides a varied and often stunning backdrop to a wide portfolio of off-peak holiday experiences. Matching the right experience and the right brand with the right empty nester at the right time increases visitor numbers and tourism spend. Market segmentation research by BVA BDRC for the NCTA helps destinations achieve this.
Amongst fourteen primary motivations for taking off-peak holidays, ‘to escape/relax’ (55%) was most cited by empty nesters, followed by ‘to visit somewhere new’ (46%) and ‘to revisit a place’ (45%). Interestingly, four in ten cite at least four different primary motivations for taking off-peak holidays, ranging from ‘attending an event/festival’ (12%) to ‘learning / discovering the history / culture of an area’ (36%).
So with multiple holidays taken each year by this demographic (whether in the UK or overseas), there are extensive opportunities for all destinations to trigger more empty nester trip-making.
Detail on the NCTA’s empty nester research can be found here, and it is clear that by uncovering and mapping six distinct travel segments a much richer picture has emerged of this key demographic and their priorities in life. We might all be Brexit now, but in working out how best to attract Energetic Enjoyers, brand match the characters and interests of Contented Coasters or overcome the challenges with Aspirational Elusives, many in the travel industry will be much better placed to capitalise on the silver economy over the longer term.
If you’d like to discover more about some of our work on the Grey Pound, or to find out how BVA BDRC can help you better segment your travel audiences, get in touch with Max.
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Read more about this study on the National Coastal Tourism Academy's site.