Age does matter
By Hazel Heyer l Special to eTN (eTurbo News)
Demographics will be one of the most important
factors affecting the shape of tourism in the medium to long-term.
However, booming population growth across much of the developing
world combined with an aging population in the world’s
major developed economies will raise a few issues.
As tourism moves its demographic focus from population
explosion to population redistribution, it will see the impact
of “greying” populations throughout the world, a
labor force peaking in many areas and a rising number of children
in only two regions: North America and Africa, according to Jacob
Kirkegaard, Research Associate at the Institute for International
Economies.
Economic impact of demographics is relevant to
tourism as it zooms in closer to the inflection point of stagnation.
The share of youth population in Asia has already evolved almost
close to stagnation.
Kirkegaard said, “The number of children globally is heading
towards a real decline except for both North America and Africa
(with an absolute rising number of children), World labor forces
are peaking at about 20-40 age range, however there is a large
regional disparity across the world. On the global front, the
number of elderly in the world is simply about to explode- an
issue that exists in Europe, the United States and obviously,
Asia (in terms of absolute increase).”
US demographics remain interesting because the
population of all age groups-young, working and elderly- will
continue to increase, assuming the historical patterns of immigration. “But
we know, immigration is reasonably one tricky subject to base
assessments on in the States today,” said Kirkegaard.
Immigration is not something that will regulate
the boom, although it is on the US agenda for discussion, on
debates on economic trends further to the ageing of the world’s
population. “It will only create reduced tides between
regions such was historically seen between Europe and the US,
between Latin America, and US, US and Asia, and between Europe,
the Middle East and South Asia,” he said. Impact of immigration
status quo or reform on industry workforce in the US will hinge
upon sustainable development.
Asia becomes more interesting to monitor due to
its heterogeneous mix and a totally different demographic outlook.
Japan’s total population was at peak last year. South Korea
will pick up in 10 to 15 years. China will peak sometime year
2015 and beyond; whereas countries like Indonesia and India will
not peak in population in the next 50 years. “There is
the widespread concept in Asia that one is not going to remain
young. Hence, there will be no continuous inflow of young people
re-supplying Asia’s workforce,” said the research
associate.
Absolute decline in South Korea will be much greater
than in Japan in the next 50 years. Although Japan is more stable
in terms of population count, South Korea will face a much larger
disproportionate decline compared to Japan. Asia will turn grey
very rapidly. One example, Japan had already begun this ageing
population build-up in the last decade.
“We are facing an era of global explosion.
The global age scale is tipping towards the elderly with the
number of youth absolutely declining. By the time we get to the
Asian consumer market, a lot of them will have turned middle-aged
- time when they have significant purchasing power,” Kirkegaard
asserted.
Latin America, where overall population growth
continues to increase, will experience similar trends as had
Asia. Children will be declining in numbers. Labor force will
peak relatively at 20 to 30 or 30 to 40 except in Mexico, due
in fact to the immigration situation witnessing further interesting
developments ahead. Latin America will be turning old very rapidly
in the foreseeable future, said Kirkegaard.
Africa’s numbers is very difficult to obtain.
Population projections are hard to make due to the uncertainty
of the impact of HIV-AIDS in the continent. This region will
face increasing growth in all age groups years from now, even
with people 65 and above. Africa, as a continent, however will
remain as a young region for generations to come.
Europe is the most interesting to follow, demographically-speaking.
He said it has enormous internal variance, which is very essential
to consider. “Overall impact of the EU 25 (with the recent
accession) posts a steady decline in increase followed by an
absolute decline in population in Europe.
Within Europe, gaps are very wide among people
with the biggest demographics unfolding in Russia. “It’s
facing a steady decline. Russia is now an absolute disaster.
One sees a massive drop, the farther south you go in the region.
Russia is nose-diving by an alarming 30 percent.”
Mediterranean countries like Italy and Spain are
clearly reporting significant decreases, together with the new
member states of Eastern/Central Europe. Northern Europe demographics
expect higher numbers ahead. France, Britain and Scandinavia
show stable levels. Kirkegaard said Europe’s youth already
disappearing very rapidly. “We already report totals of
about 600,000 to 800,000 declining every year. This will continue
in the near future. Labor forces in Europe will start declining
in the next five years. Unfortunately, many politicians have
not caught on nor understood the implications.”
He added, in Europe today, the farther east and
south one goes, the worst demographics gets. Not surprisingly,
the greying of populations will continue in Europe. Since the
EU is relatively progressive in terms of ageing, there will however
come a time when decline in absolute numbers will catch up with
the absolute level of populations. Spain will remain bearing
the case of long-term elderly burden, he said.
“ Diaspora of the 1971 to 1981 birth years shows significant impact on
what will shape our products in the future. It will indicate a much expanded
consumer expectation where style, technology and assets will play more different
roles than say, 30 years ago,” said Steven Porter, president InterContinental
Hotels Group for the Americas region.
Generation X is an industry driver today taking
over from the baby boomers. Their influence is already being
felt in terms of taste or preference for amenities and facilities.
Youth market has high tech demands such as the internet, broadband
access and state-of-the-art telephony.Aging consumers will however
continue to have a huge impact - thanks to their available time
to travel and money to spend. They will need multi-use properties
and activity that reflect their longevity in pursuing activities
and the expectations for quality of life. The market will need
to focus more on the ages between 60 and 80. The new older generation
expects to see no change in their leisure and pleasure travel
activities.
Older travelers are more daring than those of the
same age in the past generations, according to the American Traveler
Survey (ATS) initiated by Stanley Plog. “The percentage
that plans to go back to the same place increases with age. That
increase in however gradual and not dramatic over time,” he
said. Among persons 65 and older, it is about 49 percent - some
7 percent more than the 21- to 34-year-olds who plan to return
to the same old spot.
Selecting a new place similar to the ones they
previously visited reflects a low percentage. Plog said, “By
age 65, it declines to slightly over 1 percent; for the youngest
group, only 3 percent. On the other hand, selecting an entirely
new destination for the next trip remains strong.” About
half of the 65 or older he surveyed plans to visit something
new; 55 percent of the younger crowd will definitely book new
destinations.
“There is a cost attached with harmonizing
the balance between global wanderlust and the need for national
security post 9-11. Huge implications for growth will need to
be factored in the US market,” said Porter.
The average age of the buyers of condo-hotel products
is about 54 years old. “If, in fact, people are getting
younger as they age, in the future, it may even average at 57,” said
John Guthrie, head of International Resourcing and Development
for Hilton International.
Looking at demographics for 2025, business will
just get better for the company. Guthrie sees development in
fractionals, condo-hotels and vacation club properties flourishing
in this specific demographic acquiring their units today. “If
the set of demographics today is prepared to invest in vacation
properties, going back into rental pools providing accommodation
for travelers, business will boom from this age group.”
As supply drives demand, the industry will have
more business in America and Europe meeting with great success.
Guthrie announced they have 10 resorts on the horizon in Europe
with the trend continuing to spread around the world.
To comply with disability and aging traveler needs
on a global basis is the name of the game. Moving to the city
is this top executive’s best option. Not just any city,
not any rural environment, but somewhere which caters to seniors. “I
need to stay close to civilization, to a city where I will have
access to many things [as I grow older]. I will move to an apartment,” said
Edouard Ettedgi, group executive for Mandarin Oriental Hotel
Group. “Life becomes shorter when you are 65 to 75. I will
prefer to vacation or go on cruises. If I can have access to
a hotel and an airport, I will be able to enjoy the facilities
and free the time for my wife or partner in old age,” added
Ettedgi.
Business today is not purely about concentrating
on matured audiences. Psychographics will also figure prominently
in industry planning. Groups bound by similar interest, not age,
will drive products and marketing. This growth will focus on
hiring, training and retention and will face issues such as pension
liability, employment costs and development of local national
work populations.
