It is clear as we look around…….the experience economy is upon us. The Tourism and Hospitality industry in particular is striving to grasp the concept of creating experiences for its consumers. You only have to look at business such as Yo Sushi, Dinner in the Sky, Virgin Galactic and many of the hotels being built in the UAE to realise that ‘experiences’ are number one for future competitive advantage.
But what about smaller business and the destinations they operate in? It is a fact, that although we talk about large multinational companies, it is the smaller businesses that make up the majority of the Tourism and Hospitality industry. So, how can these small businesses strive to create ‘memorable experience’ to their customers? I believe the answer is co-operation. This method of business has been around for years in the form of ‘package holidays’ and has proven extremely successful. This can be implemented on a much smaller scale to draw a number of smaller experiences into a ‘memorable experience’.Virgin Galactic and many of the hotels being built in the UEA to realise that ‘experiences’ are number one for future competitive advantage.
Examples of Co-operation
Co-operation can be as small as holding a leaflet on a local attraction, but here are a few (and only a few) examples of businesses that co-operate to enhance the experience for their customers:
Rail and 2for1 London provide travel, plus discount on many of London’s top attractions
Premier Inn and Beefeater provide comfortable accommodation with great food
Alton Towers and Local Hotels/B&B’s provide a day out to remember with a comfortable nights sleep
London Hotels and Theatre Companies provide accommodation in the heart of London with a great night at the theatre
Las Vegas Attraction Passes provides tourists with an array of experiences for a single price
What are the Benefits?
Co-operation provides a number of benefits for Tourism and Hospitality businesses, and the wider community that they operate in:
1. Small businesses with limited scope are able to combine a number of experiences into a ‘memorable experience’ through effective co-operation with other local businesses. An example of this would be a small hotel co-operating with a restaurant or local attractive by providing a discount.
2. Business can take advantage of ‘free’ marketing and visa versa. This is great for smaller businesses who rely on ‘free’ advertising.
3. Destinations become more appealing to tourists, supporting the notion of sustainable tourism. This allows smaller businesses to make a difference to the destination they operate in by increasing tourism.
4. Transport links and the final destination can co-operate to create experiences. Such as Rail and London 2for1. This idea gives tourists a reason to visit a destination (which are usually made up of small businesses) due to the discounts they will receive.
5. A single transaction cost, such as the Las Vegas attraction pass can create the perception of value for money. Also this reducing the negative feelings associated with payment, as an experience can be paid for in a single transaction. This idea allows an array of small businesses to work together to create a ‘memorable experience’.
Are there any drawbacks?
Although co-operation can create a number of fantastic benefits for Tourism and Hospitality Business, there are a number of potential drawbacks:
1. Co-operation often depends on the management of a mutual relationship. Each party places trust on others to create a positive experience for customers.
2. Similar to the first point, to some extent, co-operation places your reputation in someone else’s hands. A poor experience in any part of the wider experience could have a negative impact on your business.
3. Managing money can also be an issue, especially if the customer is paying for the experience as a whole. Who receives the payment? How long do they hold it for? What percentage do you receive? And when?
4. Maintaining the experience in the long-term can also be an issue. Businesses change their management and strategic direction. Will you ‘fit’ or be part of this?
The key to survival?
Having considered the idea of co-operation in creating experiences, it is clear that it holds many benefits for Tourism and Hospitality businesses. As we continue to develop and become more intelligent consumers, it is clear that ‘experiences’ are the key to creating sustainable competitive advantage. As many small businesses have limited scope, co-operation may become increasingly important as a key to survival and profitability. Co-operation should be considered as a potential way for small businesses to create ‘memorable experiences’ in the future.