Wednesday, June 25, 2008

Boomer/Senior Travel – Thoughts & Predictions

Much has been made of the coming retirement of millions of baby boomers. This generation is supposed to be the wealthiest in history; to be interested in travel and recreation; and is expected to (bad pun alert) fuel the future of the travel industry (in addition to supposedly draining Medicare and social security).

One travel newsletter from 2003 said:
“Over the next two decades, the post-50 generation (don’t ever call them ‘seniors’) will be the major force pushing travel and tourism numbers to all-time highs. They have changed every other economic and business dynamic in the U.S. for the past 50 years, so is it any surprise that this population will change travel industry dynamics for years to come?”

And one from 2006:
“Over 55 million baby boomers are getting ready to retire. When asked what they intend on doing, travel and see the world is on top of there [sic] list.”

And others are still (late 2007) tooting the same horn:
“This generation is more use [sic] to traveling and so they look for exotic destinations and interesting sites to keep them entertained. It takes a lot more to make them happy than it did the generation before them.”

(Aside from all the bad grammar), we’re skeptical. Our guess is that baby boomers or new seniors (let’s call them BBS – Baby Boom Seniors) will be pulling in their horns. Air travel is uncomfortable (especially in economy, with cramped seats and no in-flight amenities), the airport experience is dreadful (thanks mostly to TSA), everything is becoming an unknown hassle (do I have to pay 25 bucks to check a bag? to change my ticket? to take a pee?), and it’s all getting more expensive every day.

So why should BBS travelers turn out any different from previous senior generations? Those generations occasionally took cruises, went on group tours, bought huge RVs (which they now can’t afford to gas up), spent time with family, and overall just traveled less. They wanted safe, simple, easy travel. And they were bargain-basement shoppers.

A very wealthy couple we know has traveled the world for years, flying to someplace exotic and exciting every couple of months. Lately, though still in their late 50s, they drive, they take at most one big air trip a year, they complain bitterly about the few short annual domestic flights it’s necessary for them to take, and they have adopted leisure activities which keep them more locally focused.

We expect that BBS travelers will also fly less, drive more, take group tours and cruises, and stay close to family. Unless the air travel industry (not just airlines, but all aspects of air travel) sees the light, this huge demographic of wealthy potential travelers will decide to do something else. And that something else will include flying as little as possible.

Arthur Frommer – the ultimate senior budget traveler – is constantly discussing cheap this, cheap that: cruise deals, affordable lodging (motel chains), the cheapest destinations, and free entertainment once you’re there. Wouldn’t want to splurge on anything, you know. It’s as if now that BBS have both the time and the money, they want to hang onto their cash until they die. This certainly isn’t the same generation that a few decades ago claimed to want to die owing the credit-card companies as much money as possible.

From a marketing standpoint, the travel industry certainly hasn’t yet gotten the message. Most travel ads feature darling 20- or 30-somethings looking sexy and acting trendy. BBS travelers really don’t want to be around those folks. BBS travelers may not want cheap lodging (per se), but want inexpensive lodging (a significant difference). This generation will be the ones most able to pay $10 for a wine tasting, but also the ones most likely to complain about it.

And while the BBS travel demographic is technologically savvy, it will shy away from the latest and greatest web schemes. It really doesn’t want viral videos, to be inundated by obnoxious music and advertising, to figure out what YouTube or Facebook are all about, and to be challenged by tiny type and obscure navigation tools. We actually wonder if the BBS traveler will fuel a resurgence of print travel media. We wouldn’t even be surprised to see brick-and-mortar travel agencies make a comeback.

It seems mostly that for the BBS traveler, it will be about the How of travel, rather than the Where or How Often. BBS travelers will focus on how well the travel experience meets their needs. How easy is it to make reservations? How comfortable is the flight/room/seat cushion? How many other people “like me” will be where I’m going? How much outside my comfort zone am I willing to go just to see something unusual? How can you, Mr. Travel Provider, make my experience easier, more comfortable, and cheaper?

The BBS generation may, indeed, prove to be a boon for many sectors of the economy (financial services, healthcare). As for the travel industry, if oil prices have reached a level that will mean $5-a-gallon gas for the rest of our lives and cheap airline tickets a thing of the past, our guesses for American BBS travelers are: cruise lines, especially those serving north and central America (less flying); tour companies offering canned (safe and easy) travel to international destinations; and more travel to U.S. destinations (New England, California) which are within one-day drives of large population centers.

And if this large, impactful generation travels less – just when the industry expects it to travel more – all travelers will see changes in the airline/travel industry that we might not even begin to imagine.