The experience economy and experiences in tourism

1. The experience economy and experiences in tourism Contemporary Issues in Tourism lecture by Heike Schänzel

2. What do want out of your life? • Underlying question: what do you think will make you happy in life?

3. Welcome to the Experience Economy – the business side on experiences • As goods and services become commoditised, the customer experiences that companies create will matter most. (Pine and Gilmore, 1998) • The progression of economic value demands that businesses design engaging experiences that command a fee.

4. Trend towards authentic experiences https://www.youtube.com/watch?v=pXv3cfvJ9F8

5. 4 Stages: • Move from raw materials to • make products to • deliver services to • stage experiences

7. Economic value & Emotional resonance

8. Consumer Behaviour What is the meaning of luxury for you? • Is it material possessions; i.e. nice car and clothes, electronic gadget or nice home furnishings? • Is it having experiences; i.e. nice holidays and interesting hobbies; good food; pampering yourself? • Is it having time for yourself?

9. Source: nVision Research | Base: 1,000-1,200 face-to-face respondents aged 16+, GB Source: nVision Research | Base: 2,000 online respondents aged 16+, GB, 2011 The changing meaning of luxury “Please say which of the following things would be the best description of ‘luxury’ in your life” See notes pages for further information Best description of luxury Having time just to relax 2011 : 24% Going on expensive holidays 2011 : 39%

10. Source: Oxford Economics/nVision | Base: UK Intelligent luxury : changing the preference balance The “enrichment” index - Total annual expenditure on enrichment v material goods (at current prices, in billions) | February 2012 forecast

11. The need for new experiences, by gender, age and social grade Proportion who strongly or moderately feel they must satisfy their need for new experiences Source: 'Changing Lives', nVision/Taylor Nelson Sofres Base: 1000 adults 16+, UK 4996:

12. nVision EU Key Trend | Acute Demand for Happiness

13. Acute Demand for Happiness Weakening emphasis many place on overtly materialistic displays of wealth - questions the very principles of materialistic consumption Growing mindset that one needs more than mere money in order to achieve personal fulfilment Emergence of more invitations to engage in experiential rather than materialistic forms of consumption Happiness will be increasingly connected with living well There will always be appeal in the notion that possessions + money = happiness and success, the predictions are for more experience-rich forms of consumption Increasing importance placed on Happiness

14. nVision Global Key Trend | Authenti-seeking Modern consumers aspire to collect authentic products and experiences and are learning to view suspiciously all that is artificial, generic and mass-produced.

15. nVision Global Key Trend | Authenti-seeking Source: MTV Travel Study/nVision | Base: 300 respondents per country aged 15-34, 2010 Discovery and bragging rights : global young adults and their holiday aspirations % 15-34 year-olds in selected countries who want the following from a holiday (see notes for countries surveyed)

16. nVitro nVitro 75 The End of Adventure Anticipating a future of managed discovery and curated novelty. Adventure, as we have known it, is dead.

17. Travelling into the unknown : harder to do One of the most momentous achievements of the internet age: the progressive eradication of the unknown Consumers are able to gradually remove mystery that, until relatively recently, required us to take a leap into the unknown. E.g. TripAdvisor Do we face a future in which discovery is managed, experiences vetted and true adventure hard to achieve? Where are the moments of uncharted, authentic discovery of the past? Source: Conrad Advertising/nVision | 2,143 online respondents aged 18+, GB, 2011

18. Adventure in the 21st century : much revered and, for some, missed “I just realized how safe I tried to live and how dependant I was on information. I miss being brave and adventurous when I was in my early 20s. I am planning for a trip to south-east Asia without any information. I think it will bring my life fresh meaning”. South Korea, Female, 30 “Sometimes it can be nice just to take a small and not very daring chance like going to see a foreign film that you’ve never heard of or jumping in the car and driving with no particular destination in mind. These sorts of things can go wrong but can lead to great experiences.” Female, 32, Northern Ireland “Yes I do miss a sense of adventure but I have no idea how I could possibly regain it”. Female, 32, Italy A majority of respondents in GB, Germany, Italy, Spain, Denmark, Ireland, South Korea, Japan and the US agree they feel a need for “more excitement” in their everyday lives. Source: nVision Research | Base: 2,000 - 5,000 online respondents aged 16+, 2011 Source: nVision Qualitative Research, 2011 There is a desire for the intoxicating thrill and sheer excitement that only accidental, authentic and surprising discovery can deliver. Adventure – though a potentially risky endeavour - holds many positive associations: a way of uncovering new experiences and acquiring knowledge, and gaining social capital in the process. There is a craving for “more excitement” which is commonly felt amongst global populations along with a feeling of nostalgia for earlier life stages during which adventure was more commonplace.

19. The Power of Aspiration “I think our aspirations are bigger than, say, our parents.” Female, 21-30 We are changing, and changing faster than ever!

20. The Power of Aspiration That, as we get richer, our values and aspirations are evolving for the better, ... away from materialistic greed and selfishness...towards self-actualisation. There could be positive change:

21. Trends in consumer behaviour • Changing meaning of luxury = focus on happiness & self-actualisation - Emphasis on experience rich forms of consumption instead of materialistic concerns. Tourism as part of delivering those experiences: • Desire for new experiences = fluidity of life • Variety instead of constancy • Search for authentic experiences: - Travel as a source of social and cultural capital accumulation • Desire for adventure: • Need for more excitement and audacious living • Increasing individualisation: • More customisation and catering for individual tastes

22. Experiences in the consumption of tourism • Consumers seek newer/richer/deeper experiences on holiday • Part of individualisation and cultural capital: being differentiated by what you do on holiday • Extension of hobbies: passion about a specific activity • Checklist mentality (or bucket list): trying new things – a one-off experience • What is on your bucket list?

23. Experiences in the Consumption of tourism Cont. • Era of co-production of experiences: tourists play more active role in creating their desired experiences Third generation experience economy: • Promoting the self-creation of experiences • The experience is understood as the event created by the tourists themselves • Move from experience economy to ‘kinship economy’: about meaningful relationships

24. Contemporary tourist experiences • The tourist experience or what people experience as tourists, is unique to the individual • There are as many forms of tourist experiences as there are tourists • The tourist experience becomes a complex, dynamic and multidimensional phenomenon • A memorable holiday experience is increasingly desired for personal happiness

25. What are some of your most memorable Holiday experiences? • Can you name a memorable holiday experience? • What makes it memorable?

26. Can travel experiences bring personal happiness? • Focus is on the economic contribution of tourism rather than on its social benefits • Part of consumption culture and contemporary capitalism • Increased consumerism – the purchase of goods and services – does not buy happiness • Research on income and subjective well-being shows that increased income has little lasting impact on happiness • Travel experiences are part of other life experiences: home, work, health, family, leisure – life in general

27. About personal happiness with life in general

28. Why Are travel experiences important for personal happiness? • Leisure consumption is associated with increased happiness through facilitating social connectedness • Instrumental reasons: holidays taken to enhance family bonds may increase personal happiness • Social tourism: opportunities for bonding for disadvantaged families • Tourism as a secular spiritual experience • Tourism consumption linked with identity, quality of life and social connectedness/capital • More about the quality of tourism experiences then quantity

29. Is consumption of tourist experiences different to other consumerism? • Not about material possessions but possibly about non-material fulfilment • Facilitates human relationships or social connectedness • Improved experiences of everyday life Problems: • Focus on quantity instead of quality: desire to ‘collect’ more experiences may not lead to increased happiness • Cost of a holiday not related to level of happiness generated; ‘anti-consumerist’ approach may inject more meaning to the experience

30. Topic question • Why do so many people come to believe that consuming tourist experiences will make them happier?

31. references • DeLeire, T. & Kalil, A. (2010) Does consumption buy happiness? Evidence from the United States. International Review of Economics, 57: 163-176. • McCabe, S., & Johnson, S. (2013). The happiness factor in tourism: Subjective well-being and social tourism. Annals of Tourism Research, 41(0), 42-65. • Pearce, P., Filep, S. & Ross, G. (2011) Tourists, Tourism and the Good Life. Abingdon: Routledge. • Pine, B. J., II, & Gilmore, J. H. (1998). Welcome to the experience economy. Harvard Business Review, 76(4), 97-105. • Sharpley, R. & Stone, P.R. (2012) Contemporary Tourist Experience: Concepts and consequences. London: Routledge. • Singh, T.V. (2012) Critical Debates in Tourism. Chapter 2 on Consumerism and Tourism: Are they cousins? (pp. 53-78) Clevedon: Channel View.