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Bill Bernbach |
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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 travellers are more daring than those of the same age in the past generations, according to the American Traveller 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, 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, 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. |
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