Golden oldies gain recognition

The downturn in global travel has forced an industry-wide scramble for resilient and productive niche-markets. A report issued last week by ITB Berlin, the world’s largest trade show, identified two that still hold promise – high yield luxury travellers, and seniors.

Entitled “ITB World Travel Trends Report 2010” the report was prepared by the research company IPK International on behalf of ITB Berlin.

It said, “Looking at the trends in consumer and business confidence, comparisons with past recessions suggest that we have moved through the late phase of an economic downturn, when current economic indicators are still deteriorating and expectations are weak, into one where the indicators are improving and expectations are rising rapidly. But there is no guarantee this time that we are following the ‘usual pattern’, or even that such a concept can ever be trusted.”

According to the European Travel Monitor, the ‘super high-spending travellers’, to quote IPK International, can spend up to 500 times more than average travellers for one night in a hotel.

The report said that IPK groups the different segments as follows:

• Low spenders: less than €750 per person per trip

• Medium spenders: from €750 to €2,500 pp per trip

• High spenders: more than €2,500 pp per trip

IPK reckons that in 2009 low spenders accounted for 62% of European outbound trips, mid-range spenders for 33% and high spenders for just 5%. But the high-end travellers generated 27% of spending, with mid-range travellers accounting for 47% and low-end travellers for 26%.

This means that, given the average €837 spend per person per trip in 2009, low spenders (245 million of them) had an outlay of just €337 per outbound traveller, while the mid-range spenders (making up 130 million) accounted for €1,154 each and the 20 million or so European high spenders for €4,068 a head, the report said.

However, the financial crisis has had a particularly severe effect on the high-spending segment, which fell by 18% in number of trips in 2009, while trips made by the mid-range spenders were down 9% and low-end spending trips only declined by 4%.

The report said that high-spending travellers tend to be older than average – 47 years old as compared with 45 years for mid-range spenders and 41 for low spenders. And they are more likely to be male, accounting for 59% of total trips as against 41% for females.

High-spending travellers are naturally more often to be found on long-haul routes. While only 3% of low spenders choose long-haul destinations, and are also not often seen in northern European countries, trips involving long-haul travel account for 59% of the total taken by high spenders, with the Americas and Asia Pacific dominating in terms of destination regions.

Although there is very little difference overall in the type of holidays preferred by the different spending groups, high spenders are twice as likely as the average European (32% compared with 16%) to opt for touring holidays. But they are, somewhat surprisingly, less inclined to take city breaks – which account for 10% of all high spenders’ trips as against 13% of trips by mid-range spenders and 18% by low spenders.

Regarding the second promising market segment, the so-called ‘golden generation’, the report said that these travellers aged 55 and over accounted for 26% of European outbound trips (involving a stay of at least one night abroad) in 2008 – 111 million trips that year and, inevitably, a few percentage points fewer in 2009.

“In 2004-08, outbound trips by the ‘golden generation’ increased by 21% – an average of 5% a year, compared with 4% a year for younger travellers (overall, European outbound trips increased by 17% in that period, and trips by 15-54 year olds by 18%).

“Surprisingly, perhaps, since a significant share of the ‘golden generation’ are probably retired, holiday travel accounts for only very slightly higher share of total trips than among European travellers as a whole – 71%, compared with 70% of all trips in 2008.

However, 18% of trips made by the ‘golden generation’ (as against 15% of total trips) involved visiting friends and relatives (VFR) and other leisure trips (e.g. for health, education and religious purposes), and 11% (compared with 15% of all trips) were business trips.”

The report said that the most important source markets for ‘golden generation’ travel are Germany and the UK, which together account for two fifths of outbound trips by European over-55s. The six top source markets generate over 60% of all ‘golden generation’ trips.

The most popular destinations are Spain, France, Germany and Italy. The top six destinations account for a little over half of total trips.

“Clearly, one can deduce from the figures that sightseeing and culture (represented by touring and city trips) together are the prime motives for travel among more mature Europeans, accounting for more than one third of the golden generation’s outbound holiday trips,” the report said.

On average, the ‘golden generation’ – nicknamed the ‘golden oldies’ by many in the industry – spent an average of €1,080 per trip and €101 per night on their holiday trips in 2008. (This included transport, accommodation, meals and other incidental costs as well as all related shopping prior to as well as during their trips).