Blog

How hotels can capitalize on Experience Economy

With the introduction of the Experience Economy, the business industry itself is going through a paradigm shift in the way services are delivered.

The term ‘Experience Economy’ was first used in the year 1998 by B. Joseph Pine II and James H. Gilmore in their ‘Harvard Business Review’ article.

It states that “As goods and services become commoditized, customer experience- the unique, personalized and memorable, that company creates will generate greater value to their business.”

Why should hotels tap into the Experience Economy?

A recent survey reveals that Experience-Led Businesses (ELBs) outperform their contemporaries in terms of customer journey and top-line metrics (Source: pressreader). Because of this approach, ELBs have

140% higher revenue growth

170% higher retention rates

160% higher customer lifetime value

Another survey states that 72% of millennials prefer to spend their money on travel and other life events than on material goods. Interestingly enough, 7 out of 10 millennials are experiencing FOMO (Fear Of Missing Out). Thus it increases ‘Millennial’s Experiential Appetite.’ (Source: Inc.com)

Millennials are comprising today’s major travel segments. They tend to prioritize experience over products. They are igniting this experiential economy, and it’s a must for hotels to tap into it. 

We’re living in an era where guests are becoming more discerning, informed and, less patient to poor services, therefore, providing a memorable experience is no longer a competitive differentiator, but rather a business imperative.

While Experience Economy is driving the travel and hospitality market, it becomes challenging for traditional travel providers to outrank competitors like modern accommodation providers (Airbnb). Let’s see how hotels can capitalize on the experience economy and deliver a unique experience to their guests.  

How hotels can take advantage of this experience economy

Deliver local experience

Millennials have huge expectations over the places they visit. They want to explore the local attractions, eateries and historical places. Therefore, to attract guests who sought-after experiences, you need to market your hotel as the best place to experience the local culture. Align your hotel design with your local culture. Decorate your hotel with ancient artworks, sculptures, and flowers. Plus, build a local cuisine. These all will make the guest feel and connect with the local community. Other than delivering localized in-house experience, you can also help guests in identifying and discovering the famous hotspots and remote but best locations to visit and get an authentic experience.

Deliver personalized services

Delivering personalized services is another way to make guests’ stay memorable and win their hearts. Studies found that 86% of consumers say personalization plays a major role in their purchase decision. Moreover, the same study reveals that 62% of consumers have chosen, recommended, or paid more for a brand that provides a personalized service or experience (Source: Revinate). Providing personalized is vital. It can be achieved with the help of technology. With modern technology tools like Hotel Management Software and other guest-facing applications, you can mine the guest data and can deliver more personalized services on every touchpoint. Personalization can not only give you guests for a lifetime but in fact, it also increases your return on investment from 5x to 8x. 

Promote on social channels

Promoting your hotel brand on social channels can deliver greater results than you think. Guests, in general, will share their travel photographs/reviews on any of the social media platforms. The chances of attracting potential guests are higher. As a hotelier, you can, with guests’ permission, can share their word-of-mouth and other happy pictures on your social channels which might attract and draw more guests to your hotel.