Has Senior-Citizens’ Enthusiasm for Overseas Travel Waned?
In recent years, senior-citizens have led the Japanese market for overseas travel. However, with demand for overseas travel abating, the number of the elderly who go abroad grows at a sluggish pace. Baby boomers are losing momentum, too. It's worth pointing out that the rate of Japanese overseas travelers aged 70 and above dropped the most sharply among all age groups in 2008 on a year-on-year basis. The question is whether senior-citizens' enthusiasm for going abroad has cooled down.
Yoko Hayano Chief Consultant
Due to the prolonged ultra-low interest rate policy, bank and postal saving accounts brought few benefits to depositors in Japan. That situation allowed various financial products to take hold in the Japanese market against the backdrop of stock market which had been in good shape since 2003 and overseas high interest rates. In particular, Japan Post launched investment trusts in October, 2005, which prompted senior-citizens and local people who had not been familiar with financial products to put money in a trust instead of a bank. The accumulated volume of sales of the trusts topped one trillion yen for 22 months since Japan Post started to sell them. Unfortunately, however, a lot of senior-citizens who didn’t tell investment trust from bank deposit signed on for those financial products without a thorough understanding of entailed risks. Quite a few elderly people seem to be affected by the recent turmoil in the global economy accompanied by a fall in stock prices as well as weakened foreign currencies.
In addition to that, there are other factors to dampen the consumption of the senior-citizens. The health care system for the latter-stage elderly (aged 75 and over) went into effect in April, 2008, which aggravates their concern about a heavier burden of medical bills. Furthermore, pension issues have been mired in confusion amid the rapid aging of the population and falling birthrate. These issues may cause a growing concern over the future among the elderly.
On the other hand, those who are aged 70 and above have more money to spare than any other age groups, because they are blessed with favorable retirement benefits and pension plan. There are other positive factors such as falling fuel surcharge and weak euro. That will favorably affect the out-bound market including tours to Europe, which are popular among senior-citizens. Actually, more and more customers come to ask travel agencies when fuel surcharge will be reduced or whether they provide travel products which reflect strong yen. That may show people have not lost their zest for overseas travel.
Meanwhile, it must be pointed out that not all the travel agencies provide products which senior-citizens are fully satisfied with. According to professor Namikawa of Sappro Medical University, the elderly show a tendency to enjoy cuisine which delights the eye as well as the palate and prefer small and colorful dishes. In reality, however, these features are not always
effectively incorporated in every package tour. Therefore, many have an impression that dishes that are included in package tours may not be tasty. And besides, senior-citizens tend to be intellectually curious and eager to get to know local people and culture. Experience-oriented package tours targeted at the elderly are expected to further spread. There is a great possibility that the sluggish market for the elderly will be stimulated if travel agencies clearly show the advantage from strong yen and reduced fuel surcharge, introducing products which can satisfy the demands of senior customers.
