Grey is the new gold

It's been called the new old. Or the new young. Whatever you call it or whichever way you look at it, today's senior citizens are no longer content to ride into the sunset quietly.

Epitomised by personalities such as Mick Jagger of The Rolling Stones who is still rocking world tours or former US President Bill Clinton, the older generation today is not only healthier, but also wealthier both in terms of money and time.

And they are fanning out across the globe in search of new adventures that go beyond "fly and flop" holidays or passive vacations where you just sit and observe – in demand are more active holidays and the industry has to adapt to cater to these new travellers with their specific concerns and needs.

Abacus International President and CEO, Mr Don Birch, says that these travellers are one of the fastest-growing segments for the travel industry globally, and in Asia. "We're seeing the emergence of a new generation of older travellers who are healthy, active, street-wise and have unprecedented spending power. This is a lucrative segment, but one which has specific needs."

While there is increasing understanding of the needs and preferences of this segment, Mr Birch says there is still some way to go if the industry is to fully tap and meet the expectations of grey travellers.

"Perceptions need to change so that we can adapt our services to meet the needs of this market – one which is going to continue to grow in value and size for at least the next 10 years."

More money, more time

Research from Compete, Inc's 'Online travel comes of age' travel study estimated that baby boomers in the US (aged 45 to 60+ and tagged baby boomers due to the number of births following the war) would earn an estimated US$3 trillion in annual income in 2006, and wield a discretionary spending power of some US$800 billion.

Mr Birch says that Compete, Inc.'s forecast of baby boomers spending 40% more time holidaying and 74% more money on a traditional vacation than 18 to 34-year-olds, creates a wealth of opportunities for the travel industry.

"While Asia's population may be getting old, it will remain fit and healthy – the 60 year olds will become the new active 40s," he says.

Asia is not a young market. By 2050, the proportion of people over 60 in industrialised countries is expected to reach a third of the population, and 40 per cent in Japan (source: United Nations Population Division 2000).

"While people may be ageing, they are becoming 'younger' too. More and more seniors treat travel as a 'natural thing' to do, so they become a source of increased demand. With the segment getting bigger and bigger, the travel and tourism industry has responded to the signal and are beginning to cater to this group," says Mr Birch.

"To do that effectively, travel agents need to firstly understand the senior citizens' wants and needs. Only by knowing what they really want can the travel agents craft special packages or rates, and be able to make the most of the opportunity grey travellers present," he added.

Be creative and customer-focused

Being creative and customer-focused are key to capturing the grey travel dollar, he says.

Hertz, for example, offers specific promotions to select groups based on demographic profiling. The company's Managing Director, Asia & Japan, Mr Wong Soon Hwa, says senior travellers tend to be repeat customers as they are more discerning and have higher spending power.

Retired travellers in the middle income bracket of US$30,000 to US$100,000 spent US$17.5 billion in 2004 – which is 16 times more than singles in the same income group – and are projected to spend US$23.6 billion by 2014, MasterCard Asia-Pacific research shows. Countries accounted for included Japan, South Korea, China, Taiwan, Hong Kong SAR, Singapore, Malaysia, Indonesia, Thailand, the Philippines, India, Australia and New Zealand.

Grey travellers may be financially independent and adventurous, but they are also hungry for attention and enjoy a personal touch. Mr Birch says. "They are not afraid to spend as long as it is value for money and convenience which meets their needs and concerns."

Packages and programmes that include wine tasting, historical tours, movie filming sites, healthcare packages and celebrity elements have all become popular new offerings from the travel industry.

Chan Brothers Travel, Singapore markets customised tour packages targeted at this age group for cultural enrichment and special events.

"We notice that a majority of baby boomers tend to shy away from the regular organised tours. They want to explore on their own or with friends who have similar interests. Hence we have special interest packages to make help them make their vacations a relaxing and memorable one," said Mr Chong Meng Kee, Director, Chan Brothers Travel.

Go for mindset, not age

Mr Birch says travel service providers therefore should diversify and target according to mindset and life stage, but definitely not age.

According to global research company ACNielsen's Life Jugglers and Life Surfers collaborative consumer study, baby boomers have higher average personal and household incomes and are spending more on almost everything, from phones and mobiles to groceries, financial services, travel and tourism and even technology and the Internet.

The same trend has been identified by an annual IPK International survey (European Travel Monitor 2007), which shows 'grey' tourists generally prefer to spend their holidays in higher standards with services to match.

Though adventurous, evidence shows that peace of mind is critical too for the grey traveller, says Mr Birch, with travel insurance a key consideration. ICICI Lombard General Insurance for example, saw seniors account for 16 per cent of its total policy buyers in 2005-06, compared with 13 per cent the previous year.

Grey Travellers on board, Silver Surfers online

According to ACNielsen's Life Jugglers and Life Surfers collaborative consumer study, more than 60% of baby boomers are now online. This is supported by the same Compete, Inc.'s 'Online travel comes of age' study, where over 10% of the 17 million baby boomers who research travel online each month will also book online, which is considerably more than young travellers who tend to window-shop.

"The Internet is becoming an extension of interface provided by travel agents over the phone and in person. And trust is very important in this area," Mr Birch says.

"It's all very well to have your tour options loaded onto your webpage on the Internet, with customisable packages, flights, hotels, and other add-ons – but the grey traveller wants to know who they're dealing with so brand, professionalism and credibility on the Web is critical," he says.