If restaurant and hotel operators start to cater more for the older population, then this will impact the types of food and correspondingly the types of foodservice equipment specified by these end-users.
Barclays Corporate Banking has suggested that this is a trend that should be followed up, as in its recent report, ‘An ageing population: The untapped potential for hospitality and leisure businesses’, it found that one fifth of UK income in the hospitality and leisure industry is generated from the over 65s – an estimated £37bn in 2014.
The research covers a sample of 564 UK hospitality and leisure businesses across the leisure, food and drink, travel, hotels and professional sports sectors, as well as 1,100 consumers of varying ages, incomes and geographies across the UK.
The survey found that currently only 5% of businesses operating within the sector consider over 65s to be their most important demographic in terms of revenue, with many focusing on 35-44 year olds instead. Barclays estimates the sector could be missing out on at least a further £16bn by underestimating the spending power of the older generation.
Despite this, one quarter of catering industry operators recognise that the proportion of turnover received from over 65s has increased in the last 5 years and 86% expect their turnover amongst this age group to increase or remain the same. Over 83% of operators expect to invest in their business in the next 5 years, but they could still be missing a trick here, as only 15% of the planned investment will be used to meet the needs of the over 65s.
Those aged 18-34 rated products and services highest, while consumers aged 55 and over provided the lowest ratings.
Products and services that are tailored to a specific age group received lower ratings, with the older age groups again marking these services lower. Brand loyalty increases with age, as 41% of those aged 65 and over were loyal to particular brands, compared to 19% of those aged 18-34.
The evidence that Barclays found suggests that with high levels of disposable income and more free time, the older demographic (65+) is spending more than other age groups across a broad range of UK hospitality and leisure services.
The average consumer spends £2,486 on hospitality and leisure services per annum. In 2014, those aged over 65 spent significantly more than any other age group, with an average expenditure of £3,372.
Barclays’ research shows that almost three quarters (72%) of businesses in the hospitality and leisure sector expect those aged over 65 to spend the same or more on services over the next 5 years, with 65% expecting disposable income to plateau or increase.
While 94% of businesses surveyed believe they are engaged or highly engaged with the over 65s, it appears in reality there is still some work to be done by hospitality and leisure businesses hoping to fully benefit from the power of the ‘Grey Pound’.