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How can the hospitality industry ride the wave of the experience economy?

Pranjal Prashar Pranjal Prashar

A recent study by McKinsey and Company showed that global spending on experiences like concerts, amusement parks, eating out, and traveling has grown more than 1.5 times faster than spending on personal consumption, and about four times faster than spending on goods. This emergence of the experience economy is a trend that hotels and other hospitality businesses should leverage for higher revenue and improved brand loyalty by providing exceptional experiences.

In the last year, India had about 10.56 million foreign tourists, and reported about 1.68 billion domestic travelers in 2017. The largest growing segment of these travelers are millennials, and that is because of a few different reasons. In comparison to previous generations, millennials tend to have a much larger overall awareness of the world and a much higher disposable income as well. More so, millennials are much more likely to spend on experiences over basic services.

Guests are constantly seeking great experiences with every hospitality brand they interact with on their travels.. Participants in the hospitality industry that fail to design and provide engaging guest experiences won’t be able to measure up to modern guests’ expectations.

In order to design and create such experiences, hotels and other hospitality participants will have to embrace and implement new and innovative technology platforms that will allow them to manage and create end-to-end experiences for guests. More so, these experiences will need to be comprehensive and tailored to the specific travel intent of each guest.

Even with the disruption of OTAs, hotels are still a space where guests still expect the hotel to act as the service provider and personalize their journey and experience. Hotels should take advantage of the ability to establish direct relationships with guests in a market where in addition to OTAs, Google and Amazon are becoming increasingly interested.

Hotels need to constantly improve and reinvent their core offerings and identify possible reasons if and why their guest experiences are not matching up to expectations. In order to stand out in the experience economy, hospitality businesses need to ensure the highest possible levels of guest satisfaction and embrace technology for personalization and constant analysis of guest reviews and feedback.

Some experiences can only be had in certain destinations. A traveler can only experience Oktoberfest in Germany, or can only take a picture in front of the Eiffel Tower in France. Hospitality businesses need to explore ways to ensure that guests have the serendipity of discovering these new experiences, all while keeping them engaged on their platform without them having to search for those experiences elsewhere. Hotels need to help their guests with area advice, available excursions and events in the area by partnering with non-competing travel operators to be the single source of guest experiences and add ancillary revenue while beefing up the guest experience.

Travelers have now started creating their own travel experience instead of being passive consumers. Consequently, hospitality businesses need to provide guests with platforms that serve hyper-personalized options for guests to create their experience from. These platforms will allow for delight in the guest journey, and will ultimately build brand loyalty and add revenue to hotels.

From tailored guest-centric experience packages, access to mobile concierges or in-room smart technology, hotels need to create experiences for guests that supercede mere service, or a product like a comfortable room.

Guests are constantly searching for new places and platforms that will allow them to have memorable and unique experiences they can share with friends and family. Not paying attention to rising trends in this new experience economy could prove to be the downfall of many hospitality businesses, unless new technology and innovative guest experiences become a core part of guest management.

By Pranjal Prashar, Co-Founder & CEO, Xperium

 

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