The senior segment is an emerging area of interest for leisure hospitality: what are the requirements of a leisure property catering for the Baby Boomer or young retiree market? What amenities, design features and models are best suited to capture the silver dollar, and how can investors capitalise on multigenerational travel?
Although there are many similarities between baby boomers and Gen X, it’s key to understand the differences between them to effectively cater to their needs.
Gen X vs Baby Boomers
Baby Boomers, generally, are less affected by rising debt costs as many of them are retired. They are seeking comfort and convenience – and are willing to spend on premium travel experiences, including upscale accommodation – while Gen X may have achieved similar financial stability, but is more impacted by the cost-of-living crisis.
The latter group also prioritises comfort and convenience when it comes to accommodation – the top reason people want to travel in 2024 is to rest and recharge, led by Gen X (68 percent) and Baby Boomers (67 percent), according to a Hilton survey.
Gen X is also more likely to splurge on upscale hotels and fine dining. According to Publicis Sapient research, almost half of Gen Xers take holidays of longer than seven days at a time and spend more money when travelling than other generations, largely because of travelling in larger (often family) groups, which makes them a valuable target market.
“They are rather keen to have very personalised experiences,” says José Gil Duarte, managing partner at Horwath, Hotels Tourism & Leisure Portugal. “They like to have active relaxation, luxury amenities, local experiences and a comforting, home-like atmosphere.”
He suggests that these nuanced differences are already recognised by some brands catering well to these slightly different demographics, arguing that while Ritz-Carlton, Westin and Belmond are catering well to the Baby Boomers, it’s brands like Aman, Mandarin Oriental and Rosewood that are well positioned to capture Gen X demand.
Designing a hospitality experience for a senior clientele
“Our target clients at this moment are really these two generations,” says Luis Pais, director at Portuguese property investment group Sostate. Completed projects for the group include the €70 million InterContinental Cascais-Estoril and the €32 million redevelopment of the Palácio das Cardosas in Porto, also as an InterContinental.
However, the group is currently targeting this market with its Valverde brand, which has properties in Lisbon and Santar. Ways in which they have been designed for this market range from small touches, such as still having actual keys to enter the rooms, to providing a bespoke, boutique service where guests feel they are entering a friendly home rather than a hotel. To ensure this, Valverde properties are kept small – fewer than 50 keys.
“All our employees are the PAs of our guests, and we try to give them an authentic experience,” explains Pais. Guests also receive small gifts from partner luxury brands. “We are not trying to give them cards to give them points to sleep again even cheaper,” he adds.
“Our price is not cheap. I will not say expensive because the service given is truly good value for money,” he continues – the Lisbon hotel’s average daily rate this year, he says, will be above €500.
“We do have a heavy approach to the guest so it’s a heavy cost, too, and needs to be reflected in the price.”
This approach seems to be working – Pais says Baby Boomers and Gen X account “for certain more than 70 per cent” of the hotels’ revenue, and the Santar hotel, which opened earlier this year, is “already fully booked on the weekends”. Off the back of the brand’s success, he confirms another Valverde is being developed in Sintra.
Choosing a brand
The branding of Sostate’s hotels is carefully considered, and while the group’s other sites may have a similar approach to the guest experience, not all will be a Valverde.
“Valverde is for small, classy, historic locations,” explains Pais. “When we have 20-30 rooms, paying fees for big brands can be quite expensive and it affects our P&L.”
However, the business has worked with the big brands before and will continue to do so, depending on the product and proposition.
“[For Valverde], we created our own standards in FLS (Fire and Life Safety), in service, in all the procedures inside the hotel. We do have that, but it’s our decision, so we don’t need to answer to our brands about that. In the other locations that we have international brands we do, but we get the benefit of that because we are in locations that we believe, we trust there that that brand is an added value to our investment.”
All those quoted in the article appeared on stage at the Resort & Residential (R&R) Hospitality Forum held in Lisbon between October 9 and 11, in a session called: It's Not All About Gen Z: Capturing Multigenerational Travel and the Senior/Later Living Market.