Boomer Bits: Baby Boomers on the Move Again – Seniors Traveling More, Per Leading Travel Insurer

Baby boomers, known as the “gray tsunami” generation, are flooding back to travel in 2022. Seven Corners, a leading insurance and specialty benefits company, released data showing a resurgent interest in travel among this generation and revealed where baby boomers are traveling most. As the travel industry attempts to predict future trends, Seven Corners helped explain how baby boomers are impacting the return of tourism.

More baby boomers are buying travel insurance.

According to Seven Corners sales data, more baby boomers (those born between 1946 and 1964) are buying travel insurance in 2022 than a year ago. The number of plans they purchased increased nearly 54% YoY. The generation with the second-highest increase was Generation Z (those born between 1997 and 2012) at 37%, followed by Generation X at 22% and millennials at just 3%.

“Some of the more modest increases may be partly because those generations simply continued to travel at steadier rates during and immediately after the pandemic,” said Angela Borden, product marketing strategist for Seven Corners. “The number of baby boomers who traveled in 2020 dropped quite significantly, more so than other age groups. To see them rebounding at this pace bodes well for the travel industry.”

Why baby boomers are bouncing back to travel at this accelerated rate is likely affected by two key factors. First, the number of active baby boomers remains high and still makes up a significant portion of the U.S. population. The 2020 U.S. Census estimated there are 73 million in that generation now, while AARP reported that 46% of the U.S. population was 50 years or older in 2019.

The second factor is this generation has significant purchasing power. The Federal Reserve estimates that baby boomers hold 51% of the country’s household wealth in 2022. That’s more than $70 trillion, at least some of which is spent on travel, entertainment and other non-essential living expenses.

The availability of disposable income means this generation is able to travel more than other generations, and when they do, they often spend more. “We’re seeing reports that many older Americans are taking roughly the same number of trips as they did before the pandemic, but when they do travel, they’re spending upwards of a $1,000 more annually than three and four years ago,” said Borden.

In addition to an increase in plans purchased, Seven Corners also saw a 24% increase in Cancel for Any Reason (CFAR) coverage purchased by baby boomers. An optional add-on benefit, CFAR allows travelers to cancel their trip for any reason they wish, not just those listed in their standard travel insurance plan document. Because CFAR provides broader coverage, it also increases the cost of travel insurance by approximately 40% to 50% for most plans.

While interest in CFAR is a reflection of the uncertain times in which we live — the recent pandemic, political unrest and labor shortages affecting the travel industry, for example — it is also affected by travelers’ ability and willingness to afford the extra expense. By comparison, more millennials, who the Federal Reserve reports having $8.6 trillion in household wealth, are also purchasing CFAR in 2022 than last year but at a slightly more modest YoY increase of 14%.

Baby boomers are choosing Europe again as their preferred destination.

Baby boomers are venturing farther from home in 2022. The top two destinations for American baby boomers this year are Italy and the United Kingdom. This is a shift from the most popular locales in 2021, which were Mexico, Turks and Caicos, and Costa Rica. Italy was fourth a year ago. The U.K. did not rank among the top five in 2021 but was the No. 1 destination for American baby boomers in 2019, showing they are slowly returning to some of their pre-pandemic travel habits.

When looking at all generations together, Italy remains the most popular destination in 2022, bumping Turks and Caicos from the top spot in 2021. The Caribbean nation fell to fifth in 2022.

The fact that more baby boomers are headed to Europe may also be impacted by their higher levels of disposable income. Traditionally a more expensive destination than some other regions, Europe may cater to travelers with larger budgets. Additionally, many European countries relaxed or eliminated their COVID-19 restrictions in the last year, making them more attractive to international visitors. Less stringent requirements are largely why Turks and Caicos was able to draw so many visitors during the pandemic. Finally, more baby boomers may be drawn to Europe simply because they have the time to take longer trips. Although baby boomers historically retire later than previous generations, COVID-19 accelerated retirement for many. It’s estimated that approximately three million baby boomers retired during the pandemic, meaning work responsibilities no longer keep them home or force them to choose closer destinations for shorter trips.

Baby boomers are waiting longer to book their trips.

Although baby boomers are willing to travel in greater numbers, a noticeable level of traveler uncertainty remains. People are waiting longer to book their trips than they did before the pandemic. “We’re seeing this in many areas of the travel industry, such as when people purchase flights at the last minute rather than risk losing money if they need to change their plans closer to departure, as well as in travel insurance,” said Borden.

Seven Corners’ sales data shows that baby boomers in particular are purchasing RoundTrip Trip Protection plans just 58 days prior to their departure date in 2022. This is half of what was reported in 2019, when baby boomers purchased plans 115 days before the start of their trip. The trend appears to indicate that while they are eager to resume their travels and have the financial means to do so, baby boomers remain cautious in their planning, waiting until much later to invest in their trips.