People don’t buy products anymore, they buy experiences. Marketing and digital gurus have been harping on about this for ages, and we broadly subscribe to this point of view. But does this mean that focusing on experiences will boost the attractiveness of a destination or the business of reservation platforms? Nothing is less certain.
A recent McKinsey article (The evolving role of experiences in travel) highlights the transformation of the travel industry, where the focus is shifting from destinations to experiences. Travelers, especially the younger generations, are looking for unique and memorable activities.The market for tourism experiences, valued at over $1,000 billion, is growing rapidly. However, booking these experiences often remains complex and fragmented. The article calls for more innovation to improve discovery and booking, with a need for better collaboration between providers, distributors and technology platforms.
The Eldorado of travel experience
What the article tells us is that although people are looking for experiences, and therefore to be able to identify the offer and easily book, the process is totally fragmented. You’ll book your flight somewhere, your hotel somewhere else, your restaurants somewhere else, and your excursions on yet another platform.
It’s anything but convenient and seamless for the customer and, this is the essential angle of the article, it doesn’t allow online distribution platforms or even travel agencies to fully capture a market with enormous potential.
What the article doesn’t tell us, as it focuses only on the marketing of the product and not on the product itself, is that this is a key issue for destinations. Many destinations that might not seem that attractive, that we don’t think of spontaneously or that we save for a day when we’ve got nothing better to do, have realized that they could exist in a different way.
They have a story to tell, and can mobilize local players to put forward a coherent narrative, and from there, by speaking from a single voice and not in a scattered way, propose a message that won’t appeal to everyone, but will strike a chord with people to whom they correspond and who wouldn’t have thought of them or prioritized them. To sell an experience, you need an experiential discourse.
Of course, if you want to do things right, you have to work on the product, the local offer from the various players (hotels, restaurants, tourist offices, tourism professionals in the broadest sense, transport) to make everything coherent and commercially readable, so as to make the destination a brand and market it better. Individually, no one player is really attractive on the market, but together they tell a story and offer an experience.
In short, it’s a $1,000 billion market that destinations and distributors have every interest in capturing and developing.
Marketing is no substitute for the product
Where the article makes a quick shortcut is in its assumption that distribution, and in particular the platforms, need to be able to offer a “one-stop shop”, a single point of purchase where everything is marketed, easy to find by the customer, and where new “experiences” can be suggested to complete and enhance their trip, in order for the platforms to capture the market and, as a logical consequence, for the destinations to boost their tourism ecosystem.
You’ll notice that the word “experience” is being used in all sorts of ways: it’s no longer a destination, a hotel, an excursion or a tourist site that are experiences, but also the act of buying, clicking on a button, etc. Soon, customers will be persuaded that seeing an ad is an experience (in fact, it’s already been done). Having to go through duty free after security checks in an airport is now sold by airports as an enriched experience…
But this purely marketing-oriented approach is an illusion. While it may benefit distributors, it can be counter-productive if the product fails to live up to expectations and disappoints the tourist. The pleasure of a great online experience doesn’t survive the disappointment of a mediocre on-site experience or one that doesn’t live up to the promise, and in this sense, a trip isn’t all that different from any physical product bought online: in the end, it’s the product that makes the experience.
Having had the opportunity to delve deeply into the subject at some point in my professional life, I’d like to go back to the basics: the concept of the experience economy, which is nothing new and didn’t wait for digital to exist. It was introduced by Joe Pine and James H. Gilmore in 1998 in their Harvard Business Review article entitled “Welcome to the Experience Economy”.
Experience is first and foremost a business model and a product
He argues that companies need to evolve beyond simply selling goods and services by creating memorable experiences for their customers. In this economy, value is added not just by what the company offers, but by the emotion and engagement customers feel during their interaction. Successful companies focus on personalization and staging to transform mundane moments into meaningful and engaging events for consumers.
Let’s be a little more concrete.
Pine uses the metaphor of coffee to explain the experience economy. Coffee, as a raw material, costs almost nothing. Transformed into a good (packaged beans), it becomes more valuable. As a service (coffee served in a diner), the price rises even further. But in an experience economy, such as a high-end café where the atmosphere and overall experience are memorable, the price is much higher because customers pay for the unique experience, not just the drink.
Apply this to the travel industry, and you’ll see that the experience economy is first and foremost a matter of thinking about the business model, then of working on the product and, at the end of the chain, only of marketing logic.
Customers are sensitive to experience…once other conditions are met
The article explains that customers buy experiences, and that the notion of experience is key to their purchasing decision. In the criteria for choosing a destination.
Really?
It’s hard to argue with the importance of experiential factors, even if only 5 of the top 20 are actually experiential.
But above all, let’s look at the top 4: safety, ease of getting around, price, quality of accommodation.
And you can propose all the experiences you want, but no one will be interested if, in our opinion, at least two of the above criteria are not met.
I recently read about a medium-sized French town that was delighted at the forthcoming opening of a hotel belonging to a major international group (excluding Accor), as this would finally put it on the map of France. And yet this is a city with a recognized cultural heritage, classified as a UNESCO World Heritage Site.
Why ? For many foreign tourists, going to a chain they don’t know or that doesn’t belong to a group they do know is a leap into the unknown they’re not ready to take. The city, even if they know it’s worth a visit, isn’t an option when they’re planning their trips, because it doesn’t appear in their favorite app when they’re choosing their hotels. You don’t consider a city where you know you won’t find an accommodation option you’re comfortable with.
I heard the same thing from foreign tourists about Corsica this summer!
We’re not talking about hotel range or number of stars, but about belonging to something known and reassuring, not to mention the propensity people have in some countries to base their choices on the loyalty programs to which they belong.
For others, cost or, at the very least, value or experience for money will be decisive.
For others, it’s important that everything is within easy walking distance or, if not, that there’s an efficient transport network (bus, metro or even Uber).
I’m not talking about safety, which is negotiable only by a few adventurers.
A bit like a Maslow Pyramid of travel: experiences, but only once basic, practical needs are met.
Bottom line: the product, the product, the product.
In fact, this table tells us the opposite of what the article says: yes, people buy experiences, but there’s a prerequisite linked to the product.
When talking about a destination, the product is seen in the broadest sense, but safety, transport infrastructure, (perceived) quality of accommodation and affordability (depending on the target clientele) are prerequisites.
Thinking that marketing and distribution will do everything, and dispensing with reflection and, where appropriate, investment in the product, won’t get you very far.
Only then will the big platforms really be useful.
Image : travel experience by frantic00 via Shutterstock.
