Question

Q8. WHAT IS "BABY BOOMER ECONOMICS"? WHEN WERE THE BABY BOOMERS BORN? RESEARCH : WHAT HAPPENED WITH BABY BOOMER MARKETS GLOBALLY IN THE 1940'S; 1950'S; 1960'S; 1970'S; 1980'S, 1990'S; 2000'S; 2010'S AND TODAY? HOW DOES IT IMPACT THE GLOBAL TRAVEL AND TOURISM INDUSTRY? HOW WILL IT AFFECT YOUR OWN CAREER OR BUSINESS THE NEXT 20 YEARS?

Answer 1

1. Baby boomer economics

The Baby Boomer generation has brought unprecedented changes to society — and now brings its considerable strength to the shopping mall.

Positive consumer demographics are poised to drive unprecedented demand for diamonds and jewelry for at least the next 10 to 15 years, according to the Diamond Research & Marketing Institute (DRMI). Driven by Baby Boomers — Americans born between 1946 and 1964 — and backed up by Millennial and Generation X shoppers, consumer demand for jewelry and diamonds will grow at a record rate well into the next decade, based on DRMI projections. Then the DRMI expects only a modest moderation in demand until the next major demographic group, the Millennials, begins its buying binge.

As can be seen in the graph at left, which is based on the National Center for Health Statistics’ tally of live births, there are two demographic peaks: the Baby Boomers and the Millennials. The demographic group in the trough between the Millennials and Boomers is called Generation X or Gen Xers. Gen Xers are not particularly enthusiastic shoppers. In contrast, both the Boomers and Millennials have been characterized as “born to shop.” While the Millennials will not likely be spending heavily on jewelry until around 2025, Baby Boomers appear poised to fuel jewelry and diamond demand at an unbridled pace, according to the DRMI.

2. History of Baby Boomers

Baby boomers emerged after the end of World War II, when birth rates across the world spiked. The explosion of new infants became known as the baby boom. During the boom, almost 77 million babies were born in the United States alone, comprising nearly 40% of the American population.

Most historians say the baby boomer phenomenon most likely involved a combination of factors: people wanting to start the families that they put off during World War II and the Great Depression, and a sense of confidence that the coming era would be safe and prosperous. Indeed, the late 1940s and 1950s generally saw increases in wages, thriving businesses, and an increase in the variety and quantity of products for consumers.

Accompanying this new economic prosperity was a migration of young families from the cities to the suburbs. The G.I. Bill allowed returning military personnel to buy affordable homes in tracts around the edges of cities. This led to a suburban ethos of the ideal family comprised of the husband as provider, the wife as a stay-at-home housekeeper, plus their children.

As suburban families began to use new forms of credit to purchase consumer goods such as cars, appliances, and television sets, businesses also targeted those children, the growing boomers, with marketing efforts. As the boomers approached adolescence, many became dissatisfied with this ethos and the consumer culture associated with it, which fueled the youth counterculture movement of the 1960s.

That huge cohort of children grew up to pay the decades of Social Security taxes that funded the retirements of their parents and grandparents. Now, millions each year are retiring themselves.

As the longest-living generation in history, boomers are at the forefront of what’s been called a longevity economy, whether they are generating income in the workforce or, in their turn, consuming the taxes of younger generations in the form of their Social Security checks.

According to a recent AARP bulletin, baby boomers spend $7 trillion per year on goods and services. And even though they are aging (the very youngest boomers are in their late 50s as of 2019) they continue to hold corporate and economic power—80% of the country’s personal net worth belongs to boomers.

3. The populations of most developed, and some developing societies are growing older. This is because birth rates have decreased and life expectancies are increasing due to medical advances and better health care, as well as greater public health education with regard to diet, exercise and improved safety awareness. As a result, population projections have estimated that there will be a huge increase in the numbers of older people who are living longer; and it has been estimated that by 2050, 2 billion people will be aged 60 and older, accounting for 22% (or 1:5) of the world population.

Because of this global trend, business operators are becoming increasingly aware of the significant impact that baby boomers (who are born between 1946 and 1964) are having on the tourism industry. It has been estimated that in the future this population growth rate will begin to dominate the tourism market. Already this growing segment of this population is exerting its significant ‘economic clout’ by demanding a diverse range of tourism services not previously considered mainstream offerings for older individuals. Tourism researchers and practitioners alike are beginning to appreciate that as a direct consequence of global aging patterns, baby boomers are now accounting for a greater share of all vacation and holiday spending than previous cohorts of older travellers.

In 1999, over 593 million international travellers were aged 60 years and over. This level of tourism activity accounted for approximately a third of the total amount spent on holidays in that year.

This significant population shift is having a notable impact on the type of holidays undertaken and the destinations that are chosen. Although travelling to warmer climates is still popular, many older travellers are now demanding new and exotic destinations in their search for memorable experiences which often includes special interest areas such as educational tourism, soft adventure holidays, visiting heritage sites, and volunteering holidays.

As a result, it is becoming more likely that the volume of beach holidays will fall markedly, and educational and/or cultural tourism will increase as baby boomers prefer to take holidays where they can learn something new, and/or embark on different historical and cultural experiences.

4. By 2040, this figure is projected to exceed two billion trips per annum (World Tourism Organization, 2001). These future population projections imply that becoming older does not necessarily restrict people’s desire to travel, in fact the opposite is actually occurring.Travel trends are showing that being older will no longer restrict people’s desire to travel within their own country or overseas. They are now becoming a separate and distinct market because they are still feeling healthy, are often wealthier, better educated, and more independent than previous generations of older people who are aged 65 years and older. Because they have more time for leisure and are relatively free of family obligations, they prefer to travel for longer periods of time, often in the off peak seasons and have a greater concern for personal safety when travelling compared with younger age groups. Because of the great heterogeneity and diversity of this older population, they require a greater variety of travel options than previously, ranging from soft adventure travel that they may want to organise themselves through the internet, to group travel where everything is done for them by the travel agent and they stay in five-star hotels.

However, tourism researchers need to be careful not to lump all people together as ‘older’ or ‘mature’ if they are over an arbitrary age such as 55, 60 or 65 years. If they do, this shows a lack of understanding about what each particular age cohort is really like, especially in relation to their individual needs, interests, and lifestyles. It is important to understand that each cohort group of older adults has lived through a specific time in history that adds to their distinct characteristics, needs and interests. At the same time, there is individual variability in a person’s physiological changes, health status, psychological wellbeing, socio-economic circumstances, social and family situation and ethnic minority status. Despite this great variability, travel businesses are beginning to appreciate that the senior market is an important market segment and because of this, has begun to shift their advertising dollars away from other target groups to this growing baby boomer travel market.