The Experience Economy: Is your Hotel Business Ready?

22 Apr

Article: Adam Beck discusses the ‘experience economy’ and what Tourism and Hospitality businesses should think about for the future.

Welcome to the Experience Economy

Over the past two decades, academics and industry professionals have encouraged the notion of creating ‘memorable experiences’, and argue that it is these experiences that ultimately sell the product or service (Morgan et al, 2010). Pine and Gilmore first highlighted the importance of the ‘experience economy’ in a famous article released in 1991, which stated ‘Work is Theatre and Every Business a Stage’ (Pine and Gilmore, 1991).

The main driving force of this is undoubtedly the growth of internet (Pine & Gilmore 1991). Although consumers have always had a choice over products and services, the internet has considerably shifted the balance of power (Pantelidis, 2010). Therefore, it is more important than ever for Hospitality and Tourism businesses to find innovative ways of creating and consistently delivering unique ‘memorable experiences’ to gain long-term competitive advantage (Hemmington, 2007).

Forward Thinking Organisations: Who is Leading the Way?

Forward thinking and revolutionary organisations are already leading the way in providing ‘memorable experiences’ that add value to consumers lives (Hemmington, 2007):

  • A major contributor in food service is Michelin star and celebrity chef Heston Blumenthal. His unique and unconventional style of preparing, presenting and serving food at The Fat Duck has caught the attention of consumers (Harris, 2003; The Fat Duck, 2011). The Fat Duck also incorporate smells and sounds to engage the five senses
  • Other examples included Naked Sushi (eating sushi from models) and Inamo Restaurant (where you can order on an interactive tale).
  • Las Vegas themed hotels such as the Venetian (Venice) and Treasure Island (Pirate) attempt to capture consumers through unique experiences. Many of these hotels also have themed rooms, pools, restaurants and bars which help to define the experience (Pine and Gilmore, 1991).
  • Hotels such as the Atlantis and Burj Al Arab (United Arab Emirates) have a unique ability of using the internet to build ‘experiences’ through interactivity, pictures, videos and sounds (Burj Al Arab 2011; Atlantis the Palm 2011).
  • Theme parks such as Alton Towers now cooperate with local accommodation providers to create ‘packaged experiences’. Also, many London attractions cooperate with other attractions and transport links providing deals and packages to consumers.
  • Disney has been successful due to the culture of its employees in promoting genuine ‘experiences’. Staff are considered the ‘cast’ and they are either ‘onstage’ or ‘’backstage’, they are trained using scripts and rewarded for creating exceptional ‘experiences’ (Morgan et al, 2008; Pine & Gilmore 1991).

Recommendations for Tourism and Hospitality Businesses

Keeping it Current: Using Technology as a Vehicle

Currently over 27% of the world population have access to the internet (see appendices) which equates to some 2 billion people (IWS, 2011). Although, these statistics present great opportunities, the Tourism and Hospitality industry is notorious for ‘falling behind’ with technology in general (Law & Jogaratnam, 2005; Buhalis & Law, 2008; Daniel Thomas, 2010). To remain competitive organisations should consider the following:

  1. Using virtual walk through to create a sense of ‘already being there’ (Cho et al., 2002)
  2. Adding music and sounds to create atmosphere
  3. Using words which are connected to the type of feelings to expect (Law & Hsu, 2006)
  4. Have quality pictures to build the experience
  5. Adding videos to allow the consumers to ‘see’ what they are likely to experience (Pantelidis, 2010)
  6. Designing interactive websites which is key to keeping the interest of consumers (Pantelidis, 2010)
  7. Managing social media and online advertising which will become increasingly important (Pantelidis, 2010)

Working Together: Cooperation in Building Experiences

One method which will become increasingly important, particularly in the case of small businesses, is generating ‘experiences’ through cooperation. This contemporary practice creates an ‘experience’ and has proven popular in recent years under the ‘all inclusive’ package. Tourism and Hospitality businesses of the future will need to build ‘experiences’ by cooperating with other local businesses such as hotels, restaurants, attractions and transport links. Not only can this reduce the number transactions a guest pays during the ‘experience’ (Hemmington, 2008; Tisch, 2007), it can also add a perception of value for money which is so important in today’s economy. This strategy also supports the notion of sustainable tourism which is so vital for many destinations today. Organisations should consider:

  1. Cooperating with others to build ‘memorable experiences’
  2. Building ‘packages’ with other organisations to create an ‘overall’ experience
  3. Marketing ‘experiences’ by cooperating with other organisations
  4. Reducing the number of transaction costs to give a perception of ‘value for money’

Making it Happen: Building a Solid Infrastructure for Success

Organisations should also understand that the most important factor is building a solid infrastructure around the delivery of the ‘experience’. Organisations should consider:

  1. Deliberately designing experiences using core competencies (strengths) as a basis (Pine and Gilmore, 1991; Lugosi, 2008).
  2. Thinking of the transaction as an ‘admission charge’ and how this would change the way things are done (Pine and Gilmore 1991).
  3. Creating ‘roles’ for key members of staff in the delivery of an ‘experience’ (Lugosi, 2008).
  4. Carefully considering staff as they are ultimately the individuals and teams that will be delivering the ‘experience’. Continual training, guidance and coaching are all important for success (Morgan et al, 2008; Shaw & Ivens, 2002).


It is clear from this report that a number Tourism and Hospitality organisations have already taken measures to adapt to the ‘experience economy’. Technology, cooperation and a solid infrastructure are key to designing, delivering and maintaining quality and consistency. Organisations must learn from these forward thinking ideas in or risk being left behind in rapidly changing global economy.

Please note: This article is published for information only and any recommendations given are the opinion of the author and therefore, should only be used if the reader feels they are applicable. A full reference list is available on request via email.

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Posted by on April 22, 2011 in Experience Economy, Technology


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