Perspectives 2019

Hospitality and leisure Nearly half of 2018’s alternative real estate investment was in hotels – and with people increasingly living longer, the hospitality and leisure sector stands to benefit. Industry data shows that older people who are approaching orentering retirement are central to demand in the sector. For instance, people aged 65 and over represent the fastest-growing age group of overseas visitors, with visitor nights growing at a compound annual growth rate (CAGR) of 5.7% over the last decade (2008-2018). This rate of growth is more than six times higher than the overall overseas visitation nights, which has grown at a CAGR of only 0.8% over the same period. The 65+ age group of overseas visitors also continued to grow strongly from 2017 to 2018 (up by 7.2% in visitor nights), despite the overall decline of overseas tourism to the UK in 2018 (down by 6.6% in visitor nights). Even more interesting is that during the global financial crisis of 2008-2009, this age group was the only cohort that grew in overseas visits. For instance, in a 2015 study of their own business, Nuffield Health noted that 72-year-olds were their most frequent gym-goers, and that Scotland’s most frequent gym users had an average age of 75. Glasgow and Edinburgh, alongside St Albans and Sheffield, were also reported as having the highest numbers of gym members aged over 80. These findings clearly highlight an opportunity for leisure real estate to direct its offer towards older people as well as young and middle-aged demographics. More opportunities will arise as the fitness sector expands and further refines its offer. New gym offerings with more comprehensive, comfortable and sophisticated facilities require a higher level and quantity of real estate space, and there are many new entrants to the market – so we can expect to see continued uptake in this area. In the 40 years from 1974 to 2014, the proportion of people aged 65 and over grew by 47% to comprise nearly 18% of the population So, whilst there is more lifetime value in targeting younger generations that will in the future become the largest travelling group, the resilience of the over-65 population cannot be ignored – especially during periods of economic downturn. Senior travellers have a greater propensity to travel domestically, stay longer, and also travel more in off-season compared to other age groups. Hotels in UK coastal areas and similar leisure destinations are well positioned to benefit from this demand – and the hospitality real estate sector as a whole stands to gain substantially from an ageing population having more time to travel. Fitness Other parts of the leisure sector will also benefit from an ageing population if they can adapt to demographic changes. For example, fitness is a huge growth area for older people in the UK – and with some experts claiming that middle age now begins at 60, enthusiasm for the gym is overtaking more traditional retirement activities. CUSHMAN & WAKEFIELD 05 COVER STORY