In 2016, it was millennials this and milliennials that but could this year see more companies focusing on the wealthiest, healthiest baby boomer generation?
Young, slick, mobile-savvy millennials, if many headlines are to be believed, are the customer segment that many travel startups first target.
Not so for San Francisco-based Stride Travel, which instead is aiming to be the go-to market place for baby boomers, which are spending more than ever on travel. [Just for the record, baby boomers are those people born between 1946 and 1965, millennials are the under 35s and between the two demographics sit generation X].
In 2016, a study by the Centre for Economic and Business Research (CEBR) found that over the past five years in the UK, over 50s have increased travel spend by 23%, while those under 50 cut back on this discretionary spend by 5%. EyeforTravel’s UK Travel Consumer Report backs this up, finding that over 65s are travelling far more, both internationally and domestically, than any other group. And it’s a similar story in the US.
“Although they are ignored by most startups, our first and third party research shows that this generation is the healthiest, wealthiest, most adventurous and most tech-savvy of seniors ever,” says Stride Vice President Jared Alster who co-founded the business with CEO Gavin Delany who had senior executive experience at Viator, Zozi and Starwood Hotels. On its advisory and investment team sit co-founders of Hipmunk and JetBlue.
Two key findings from Stride's research are that:
1. 80% of tour package spend is by travellers 55+
Baby boomers are spending an estimated $50bn on tours and activities annually. Why? Because, apparently, boomers appreciate the safety of travelling in a group and the ease and convenience of having a professional supporting them, both during the booking process and while travelling.
2. Over a third of boomers planned to take an international 'bucket list' type trip in 2016
Why? Because boomers have the time and money to take these types of trips; indeed many are in retirement or nearing it. As Bloomberg reported last week, US boomers are ‘retiring in droves’; the number of Americans over 65 without a disability that aren't in the labour force rose by 800,000 in the fourth quarter of 2016.
Baby-boomers are the fastest growing segment on Facebook
Not only are many boomers healthy and wealthy, another reason to target them is that they are tech savvy embracers of the internet, which they use to shop and compare prices, read reviews (76%) and stay in touch with friends via email and, increasingly, social media. With two-thirds of boomers using Facebook to plan a recent trip they are, quite simply, the fastest growing demographic on the global social platform - no doubt something that is being clocked by Facebook’s Dynamic Advertising for Travel team!
Having said that though, only 16% of boomers use mobile apps to plan a trip, and when they do this tends to be for utilitarian pursuits such as checking the weather. So for the moment, Stride is sticking with the desktop and mobile site, rather than investing in a native app. It could also be, given their Facebook fixation, that baby boomers are among the first to make the leap to conversational commerce.
Trends to watch
One area which is booming, as a result of this trend, is river cruising in Europe. In 2016, says Cruise Lines International Association, the number of new ships sailing Europe’s rivers grew by 10%. Clever moves by firms like AmaWaterways to partner with Disney, for example, has also led to a growing popularity with families.
While boomers may often be looking for ‘value’, they are also willing to throw money at trips. In a report from global market research firm Allied Market in late 2016, the findings are that going forward big spending baby boomers will control the highest share of the luxury travel market. Yet interestingly estimates are that just five to ten percent of marketing is targeted to this traveller segment.
But it’s not just the luxury segment that is missing a trick. According to Alster, before Stride there was no online resource for baby boomers to find tour reviews or to compare all of the world's top operators – even on TripAdvisor. They also want to be able to see how physically challenging a given itinerary might be as well as how accessible it might be to people with disabilities (something that Brettapproved has tapped into). “With our database of 10,000 trips and 20,000+ traveller reviews, boomers now have a destination on the internet that serves their needs,” Alster claims.
So, if baby boomers aren’t into apps, how is this start up, getting their marketing out there? “In terms of targeting, we've partnered with some very popular baby boomer bloggers as well as more mainstream acquisition channels, such as paid search and we're also in talks with other partners who can help us to access this market,” says Alster,
Let’s see what happens, but Stride could be onto something? Alster certainly thinks so. In fact his prediction is that in 2017 we will see far more travel brands start to focus their energy on this lucrative and underserved segment.
Want to hear more about the fast-moving travel sector? Join us on April 24-25 for the EyeforTravel San Francisco Summit, the West Coast’s largest digital travel conference
April 2017, San Francisco