Leisure and hospitality businesses are neglecting pensioners with spending power, it is claimed.
Research by Barclays shows that the over 65s added £37bn to the UK economy through spending on the hospitality and leisure sector in the last year – 36% more than the average consumer and 27% higher than the 35 to 54-year-olds who are the second biggest spending generation.
But a report from Barclays Corporate Banking reveals that companies in the sector – including businesses in Yorkshire – are missing out on at least a further £16bn in additional revenues by underestimating the spending power of the older generation.
Almost 70% businesses of companies in the sector in Yorkshire said they had no plans to introduce products or services aimed at the over 65s – with 51% arguing that there is little financial opportunity with this age group.
In Yorkshire, only 3% of businesses in the sector see those aged 65 and over as the most important demographic in terms of sales and revenue for their company. Only 30% ranked over 65s in their top three target age groups against 22% in the UK as a whole. Instead, 35% of businesses saw 35 to 44-year-olds as their priority target market.
The total annual spend of over 65s could grow to at least £57bn by 2025, according to the Office for National Statistics based on a projected 34% growth in the population of over 65s. This could be even higher considering the increased mobility and active lifestyles the over 65s are now living.
Debbie Mullen, head of corporate for Barclays in Yorkshire, said: “It is clear from the report that the over 65 age group is a huge and untapped opportunity for the hospitality and leisure sector within the UK.
“There appears to be a gulf between the perception and reality of the spending power of over 65s. By not fully focusing on the needs of this generation and the revenue growth opportunity they represent, businesses may risk missing out on their share of £16bn.
“In Yorkshire we have found that almost half of businesses in the sector expect that the proportion of their turnover generated by over 65s will increase over the next five years.
“Yet very few businesses are planning to introduce any products or services aimed at the currently ‘overlooked generation’. By investing in targeting these customers now, businesses can pre-empt the effects of an aging population, ensuring they are able to meet and capitalise on the increasing demand.”
The report also reveals that the vast majority of hospitality and leisure businesses plan to invest in their businesses in the next five years. Some 97% are planning to invest money in the next five years and 26% are planning a major investment. Some 23% of the planned investments will be used to meet the needs of the over 65s.