Overheard at the Emerging Baby Boomers AMAR ConferenceNovember 29, 2011 10:54 am
David Truly, Ph. D. Professor at Universidad de Autonoma de Guadalajara covered details on the baby boomer target market for Mexico on November 17th in Rosarito, Mexico. E360 was in attendance while also being honored to speak about targeting baby boomers on the internet for international real estate buying. Here is our brief covering Dr. Truly’s topic.
The reality, the recession has severely limited the oldest baby boomer retirement prospects according to US News Nov 2011. The magnitude is unprecedented, approximately 77 million in the US, approximately 200 million worldwide. International retirement migration have resulted in significant trends for the following regions:
• North – South Migration in Europe to Mediterranean, Italy and Spain
• Southeast Asia Migration – Thailand, Vietnam and Philippines
• Oceania – Australia, New Zealand and Bali
Factors that have contributed to international migration include:
• Advances in technology and transportation
• Globalization of business is affecting retirement of choice
• Motivation for tourism is now more than a vacation
• Emerging economies resulting from rise of middle class
• Living abroad has become easier
• Change in perception of old age
• Health and longevity is improving
• Quest for personal fulfillment; changing name from studio room to painting room etc.
Generally speaking, the typical baby boomers housing for retirees is a preference single family homes.
The comparative advantage for pricing of assisted living in Mexico is approximately averages US $3200 versus Mexico $1600.
Decision processes are pushing and pulling retirees out of the US. Here are some of the factors.
• Related to origin – local economic factors, negative climate
• Push factors alone are not enough
• Positive destination climate and costs
• Pull factors alone are not enough
Baby boomer characteristics indicate a need for a strong relationship between retirement and the local culture. This is not a strength for most tourist destinations because tourists are treated differently than how retirees should be treated.
Market Segmentation Approaches
Demographics – All baby boomer demographics are not the same 50’s 60’s and 70’s, gay community is the strongest market segment opportunity. Veterans group is also strong.
Psychographic – Values and attitudes are used in various tourism models that predict destination choice. Self-fulfillment as pursuit is a strong motivation of the baby boomer who is retiring and relocating.
Behavioral is most accurate segmentation approach. Dr. Truly noted from his baby boomer research that travel behavior is a strong predictor of retirement migration. Travel habits are highly correlated to retirement location preferences i.e. adventure, culture and history.
Additional top behavioral predictors besides travel are residential international mobility, higher education, while income has not been as much of a predictor. Residential international mobility is whether the person has had experience living aboard and in particular bought real estate abroad before.
Tourism and Retirement Migration Differences
• Amenity driven migration,
• service oriented decision making processes
• Rest and relaxation – redefining yourself
• Escapism (RV’s and sailboats end up being temporary)
• Infrastructure needs with local community
• Temporary migration
Dr. Truly discussed the different stages of development for destinations. The list below is based upon the Butler model.
• Exploration – undeveloped
• Involvement – local industry promoting tourism
• Development – infrastructure investment
• Consolidation – higher density
• Stagnation – Trying to figure out what to do to improve economy
• Rejuvenation – retirement tourism is something Costa Del Sol has found effective in rejuvenation
Other information from the baby boomer presentation was the IRM Matrix. The two most statistically significantly predictive questions from his survey:
• Importance of Mexican lifestyle
• Dissatisfaction with home country
(Groups displayed different attitudes and behaviors)
Additional predictors for migration to area:
• Residential international mobility
• High education and intellectual curiosity level
• Travel habits and visitation to area
• Income levels are not a factor but $2,000 to $3,000 per month was the average
Length of stay in Mexico
• 50%stay 6years or less
• 12% stay 15 years or more
Significant increase in dying in place
• Growth in those dying in Mexico
• Lack of support systems
• Legal issues
Top US outbound migration states were:
• Fl, NY, IL, CA and TX
• New States – NM, MN, NC and South East
Top Canada outbound migration states were:
• Toronto primary sending area
• Western Canada has grown rapidly
• Educators 30%
• Government 25% (federal and state workers)
• Entrepreneurs 24%
• Professional 14%
• Other 7%
• Large amount had multiple careers
• Lack of large corporation workers
Sources of information
• Trips and vacation 64%
• Friends and Relatives 60%
• Internet 60%
• Newspapers 50%
Reasons for selecting Mexico retirement
• Established American Community
• Cultural Amenities
• Recreational Amenities
• Health care
Emerging Mexico Retirement Trends
• Emergence of lifestyle as a factor in migration, “this reminds me of the way life used to be”.
• Increasing importance of push not pull factors, “issues in originating country becoming stronger factor”.
• Traditional climate
• Growth in rental markets as faith in real estate as an investment decreases
Additional target market segments:
• Canadians are the primary growth market
• Western Canada for Western Mexico
• More Canadians are considering wavering their residential rights
• Seasonal migration
• Coastal retirees who move into interior of México due to heat
It was a great event that we were honored to be part of. We look forward to seeing everyone at the next event.