Over the course of the following weeks we will be running a series of five articles, contributed by PricewaterhouseCoopers, on the worldwide retirement tourism industry and the opportunities it offers Jamaica. Last week we mentioned the rise of the “Retirement Village”, but what exactly are they, and more importantly, why are they becoming more and more popular throughout the US, Latin American and Caribbean region?

The Retirement Village concept has become increasingly popular in the US, and more recently, in and around the Caribbean region. These resort-like communities cater specifically to retirees, and feature amenities and services such as tennis courts, swimming pools, golf courses, theaters and restaurants. Their rise to popularity has been influenced by the increasing numbers of persons reaching retirement age in the United States and across the globe. According to the united Nations, the last count in 2009 of persons worldwide aged 60 and over totaled 700 million, and in 2050 this number will more than double to 2 billion people, largely as a result of increased life expectancy.

This changing demographic, of course, presents commercial opportunities, and despite being frequently overlooked by organisations concerned with all that is young and trendy, retirees and near-retirees are actually a relatively affluent bunch! This group has much greater buying power than the younger generation, as they usually have already paid off their mortgage, put their children through school and are now ready to cash-in on a lifetime of hard work. This fact has not been missed by savvy marketers, and the expression “Silver Dollar” no longer refers to the famous US coin, but rather to the buying power of the legion of ‘silver-haired’ consumers looking forward to spending their way through retirement, and perhaps not always in ways that we might expect!!

The market place has been supplying goods and services to an ageing population that in some instances reveal the near retiree/retiree’s exuberance. Take for example, a BMW z3, a flashy little sports car bought by mainly people in their 50s, or Volkswagen which has developed a car called the Golf Plus that has higher seats and more space than the standard model. In addition, all sorts of age defying products are on the market including, hair colours, anti-wrinkle creams, Viagra, and hormone-replacement pills. Then there are financial companies that offer a variety of financial products for the retiree, including reverse mortgages, which allow persons to cash in on the equity in their home.

Other services and products that have become increasingly attractive to retirees are health care products and services such as elective and plastic surgeries, which are sometimes sought after abroad. Travel, is increasingly becoming attractive to the time-rich retirees. The Economist reports that one major player in the cruise industry, Royal Caribbean “…told grey-haired industrialists that retirees are essential to the economics of the industry because they can fill ships at any time of the year”. Retiring abroad has also become more widespread among retirees as they move to countries that provide more agreeable living conditions. Many Europeans and North Americans that live in cold climates are attracted to warmer destinations. This may just be for the sole purpose of avoiding blistering winters or simply to improve their health conditions. Warmer climates offer a better quality of life for those who suffer from arthritis and other ailments that are exacerbated by colder conditions. Retirement villages meet the demands of a retiree who wants comfort, security and amenities that meet his/her healthcare needs. This demand has been blossoming especially in warmer climates.

Investors throughout the world are increasingly taking stock of this rising demand and are making serious investments in the retirement care industry. The United States market is the largest globally and is constantly expanding. The US Census Bureau estimates that the national nursing and residential care industry is worth over US$26 billion a year. As an indication of the industry’s growth potential, in 2004 the National Investment centre also estimated that a total of 33,000 professionally managed properties existed in the United States, with a capacity to hold over 3.6 million seniors, a figure which represents less than 5% of the potential US target market. As might be expected, a large proportion of the major retirement care communities are geographically concentrated around the Southern United States and the Caribbean. This is largely due to the affluence of the US population of retirees as well as the year-round favorable climate that already draws people to the region in droves.

In short, the primary drivers of the retirement tourism industry are: a growing population of retirees that are living longer; the retirees increasing demand for services that maintain health and a high-quality quality of life at an affordable cost; the retirees buying power, and the willingness of retirees to travel to warm climate destinations to obtain this higher standard of living. Bearing in mind, these driving growth factors of the industry, as well as Jamaica’s geographical location and expertise in the hospitality industry, wouldn’t the development of the retirement tourism industry in Jamaica be a logical path for us to follow…?

This article was written by Darren Singh and Keisha Tingling, of PricewaterhouseCoopers. For further information, contact darren.j.singh@jm.pwc.com

Next week we examine how other countries across the world, especially in the Caribbean and Latin America, have already taken steps to attract retirees to their shores.