The Changing Traveler - Experience is the New Luxury

((This long post is actually an article that I wrote for a Sri Lankan tourism magazine))

Anyone working in travel and tourism knows that the industry is in a constant state of change and evolution.  Changing demographics, technology, cultural values, and products all contribute to a dynamic industry.  While change has been a constant, the rate of change has been accelerating.  Most recently, changing consumer values coupled with the increasing importance of the internet and social media have contributed to the growing importance of the “experiential” traveler.  

There are various definitions of experiential travel, but this one from the Canadian Tourism Commission provides a good summary of the concept:

Experiential Travel engages visitors in a series of memorable activities, revealed over a duration of time, that are inherently personal, engage the senses and makes connections on an emotional, physical, spiritual, or intellectual level.”   (Canadian Tourism Commission Research Report 2004-7)

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Changing consumer characteristics and values are two important foundations for this trend.  Travelers are becoming more sophisticated and, therefore, are seeking more sophisticated travel experiences.  Higher levels of education have created a group of travelers who are more confident than ever in seeking out travel experiences that suit their personal interests.  These travelers are independent and are motivated to enjoy experiences in their travels that they can share with colleagues, friends and family when they return home. 

Contributing to the increasing importance of experiential behaviours is the simultaneous decrease in the importance of physical luxury items as badges of wealth and sophistication.  As a New York Times article observed: conspicuous consumption is a casualty of the recent recession.  (NYT, March 10, 2009).  Rather than rewarding themselves with luxury cars, jewelry and furnishings, consumers are becoming more prone to rewarding themselves with experiences such as spa treatments, cultural activities, performances, festivals, and gourmet cuisine.  

The trend toward experiential travel is also made possible by the growing power of the internet and social media.  In the past, it was difficult for visitors to find festivals, cultural attractions, local cuisines or other activities that could be part of an experiential visit.  Back then, visitors were more likely to “stand back and gaze” rather than “experience and learn.”   Without tools like the internet, visitors relied upon printed guidebooks and brochures which simply couldn’t provide the comprehensive or dynamic compendium of activities and experiences for a place that can now be obtained online.  As a result, visitors tended to go to a place to enjoy a resort or to simply “see the sights” recommended by printed guidebooks because authentic or intriguing experiences were just too hard to find.  

That all changed with the internet.  Now, review sites like TripAdvisor and Yelp can provide peer reviews for even the most obscure attractions, restaurants and activities.  Moreover, booking sites can assemble a personalized travel itinerary using “dynamic packaging” so that the visitor can arrange for a custom tailored travel product.   The internet and social media also provide the means for experiential visitors to share their experiences with friends and family when they return home – or even during their travels.  Social networking sites like FaceBook and Twitter along with sites like Flickr and YouTube allow travelers to publicly display their travel badges, confirming their sophistication and worldliness for all to see. 

These emerging experiential travelers are good news for the visitor industry, although to be successful, the industry must rethink its conventional views of the travel product.  

Experiential travelers provide a range of benefits for destinations and private sector travel industry organizations:  

• Experiences, especially those closely related to the destination, are hard to copy.  The islands of Hawai‘i have four and five star resorts; however, they tend to have higher prices and its resorts and hotels are somewhat older than similarly rated accommodations in competitive destinations.  So, why would anyone come to Hawai‘i when they could have a similar or superior resort experience in a competitive destination for a lower price?  The answer must lie in the visitor experience in Hawai‘i.  The destination promotes its spirit of “aloha” which, by its definition, is unique to Hawai‘i.  Additionally, apart from the resorts, the destination promotes cultural activities and attractions, a unique regional cuisine, festivals and other activities that can only be found in Hawai‘i.  Unlike “brick and mortar” resort structures, these experiences cannot be easily copied.  Even when designing resorts, experiences can be built into the product.  Many Las Vegas hotels and resorts, for example, are built around fantasy themes. 

• Experiential visitors are frequent travelers.  In a U.S. study conducted by the Travel Industry Association of America, researchers found that experiential visitors took 38.5% more trips annually than the average person.  When researchers measured the number of annual pleasure trips, experiential travelers took 27.9% more trips than average. 

• Experiential travelers are higher-than-average spenders when they travel.  It is logical that travelers who are visiting attractions, attending festivals and indulging in spa treatments and regional cuisine would spend more than average.  This logic is borne out by research (once again in the U.S.) indicating that, apart from transportation costs to the destination, visitors who are seeking cultural experiences spend 36.3% more than conventional travelers per trip. 

•  Experiential travelers often stay longer to enjoy the activities and attractions of a destination.  In the U.S. study, researchers found that “many travelers extend the duration of their trip specifically to participate in cultural or historic activities and events.”  Specifically, the study found that 40% of historic/cultural travelers added at least some extra time to their trip to enjoy these activities.  

•  Experiential travelers are seeking authentic attractions, products, and activities that can provide quality employment for local and indigenous people.  Visitors who are attracted to a destination for its people and culture will seek out those things that are unique and authentic.  Often, locals and indigenous people are suspicious of the travel industry, believing that it both ignores and trivializes the culture or, perhaps worse, that revenues are exported to offshore corporations.  Cultural tourism, on the other hand, supports trained guides, expert craftsmen and artisans, culinary professionals and others who can deliver quality experiences while earning good wages. 

• Experiential travel can offset traditional seasonality.  Visitors traveling to a destination for conventional attractions such as sun, sand and surf will naturally tend to travel when conditions are ideal, creating a situation with peak seasons when conditions are right and off seasons (or “shoulder” seasons) when conditions are less than perfect.  Visitors traveling to experience cultural attractions, festivals or other events and activities are less likely to adhere to these conventional travel patterns.  Festivals, in particular, are one way for destinations to drive counter-seasonal travel.  In Hawai‘i, the longstanding “Aloha Festivals” are held annually in September and October, a typically slow travel season for the islands.  Montréal Canada’s website lists sixteen different festivals scheduled throughout the year, providing visitors with a variety of reasons to travel there even during the city’s very cold winters.

•  Activities that provide one-of-a-kind experiences provide high levels of value and can command a premium price.  With increasing consumer sophistication and changing consumer values, experiences are becoming a driving motivational force.  As one observer put it: Experience is the new luxury.

To embrace experiential travelers, the industry must rethink its product, because experiential travel is the opposite of mass tourism.  To create a value proposition for experiential travelers, the industry must design ways for the visitor to actively engage and participate in the destination on a personal level.  Cultural tourism, agri-tourism, eco-tourism, historical tourism, nature tourism, and many other hyphenated tourism categories can all fit under the umbrella of experiential tourism – because they all deliver value to the consumer through the travel experience.  

Destinations and tourism companies have begun to shift their marketing communications and product development to embrace experiential tourism.  For many years Canada promoted its wild and scenic beauty.  More recently, however, Canada has established a marketing position built around the idea “Explore Canada.”  

Disney, which has long been skilled at manufacturing resorts and theme parks built on fantasy has taken a different approach in its new Aulani Resort and Spa in Hawai‘i.  Certainly, the resort continues to feature costumed Disney characters (albeit decked out in Hawaiian garb); but, the resort has added features that complement its traditional products with more experiential ones.  At the resort, the main building is designed to mimic a traditional Hawaiian canoe house.  The ‘Ōlelo bar in the hotel has Hawaiian words and definitions mounted on the walls and the bartenders and waiters speak Hawaiian.  At night, guests are invited to sit around a fire pit while a member of the resort staff tells stories about Hawaiian legends. 

While change is a fact of life in the travel industry, riding the wave of change can improve profitability.  The rise of experiential travelers can be a welcome development for those organizations that understand them and who can develop products and services that serve their needs, deliver value, and command a strong and profitable position in a competitive marketplace.