Adapting your hospitality venture to this major shift in consumer tastes.
In 1998, the Harvard Business Review published an article on the ‘experience economy’. It described its subject as the next stage in global financial evolution; after provision of commodities, goods, and services, would come experiences.
Being the world’s eminent business publication of the time, the Harvard Business Review (HBR) was rightly concerned about how its readers would monetise something seemingly so ephemeral. As a case study it offered Café Ke’ilu in Israel; the name translates as ’Café Make Believe’.
“Manager Nir Caspi told a reporter that people come to cafés to be seen and to meet people, not for the food,” reports the HBR, “Cafe Ke’ilu pursues that observation to its logical conclusion. The establishment serves its customers plates and mugs that are empty, and charges guests $3 during the week and $6 on weekends for the social experience.”
Back in 1998 the 'experiential economy' was a cutting-edge notion. Twenty years later, it's a mainstream business conversation (take a look at this 2017 article by beverage giant Diageo's head of culture for a topical explanation of the relationship between consumers and 'experiences').
The experience economy has hit more than the drinks market, of course. It’s now a huge part of the travel sector, and hospitality too. Whether the ‘experience’ itself represents a new trend such as ‘farm to table’ cooking, a revamped activity like falconry – but updated with more of an Instagram-friendly backdrop – or if the hotel is an inspiring and memorable space that’s an experience to simply stay in, the sensory aspect of a stay – the memories it leaves guests with – is viewed as an essential part of the trade. So how can your hotel business adapt?
Steve Dobson is the co-founder of gounusual.com. He’s had “fifteen years driving the experiential hotel market” and he’s consulted for the likes of Airbnb. His shrewd, practical advice is to hone the guest experience itself before bolting activity-style experiences on to your proposition. “An ‘experiential hotel’ to my mind offers a stay that can be classed as ‘remarkable’ – that is, people remark on it,” Steve says, “They want to tell their friends about it, whether it’s a cave or a luxury liner. This is the product you want to grow.”
He says businesses can come unstuck by paying lip service to the experiential trend.
“‘Experience’ ,’authentic’, and ‘local’ have become buzz words comparable to ‘boutique’ or ‘design’ in the 90s, but nowadays the customers are even more savvy, and will be very disappointed if the expectations don’t match the reality. In fact, they’ll check beforehand whether this is the case: and if others say online that it isn’t, then you won’t get their custom.”
Steve implores hoteliers to focus on basics like quality of the bed, bathroom and breakfast, ease of check in and check out, service, and staff. Not only does the overall ‘guest experience’ hinge on the fundamentals, but they are often the foundations for the jazzier happenings that we associate with the experience economy. “If your wifi isn’t excellent, and it’s hard to make it so in a hotel, then you’ll look silly pushing any technology” explains Steve.
But Steve will still talk about what he considers to be excellent hotel experiences.
"At The Pig, you’re expecting to be wowed,” he says, “It’s local food, well sourced. Is it super fancy? No, it’s just a fantastic place to go away for a really nice weekend.” And because Robin Hutson, “does a fantastic job of creating great staff,” then he can roll out the concept a lot more confidently.
Experience is partly about old-fashioned added value, “the CBeebies Hotel at Alton Towers is £450 a night, but you get early access to the park and more fun with your children, so it provides value. The Good Hotel in London is a former Dutch floating detention centre moored at the Royal Docks, that employs the long-term unemployed; it’s around £110 per night and you leave feeling great about yourself having never stayed anywhere else quite like it.”
In terms of an experiential trend that could be replicated by hotels in general, Steve says: “We’ve had food with rooms, next up is drinks with rooms – the Portobello Road Gin distillery has accommodation.” And for ‘wow factor’ he drops the Manta resort in Tanzania. “Its rooms are beneath the sea. Now, remember, the headline is ‘underwater bedroom’ but the reality is great service and an easy check-out.”
On a strategic level, Steve warns hoteliers not to confuse marketing with revenue management, or fall into the trap of giving marketing roles to staff who don’t show enthusiasm for anything else. “People think they can spend money with OTAs and that’s marketing – as a bonus, the OTAs don’t question any of your plans, they just take your money.”
Steve’s cautions of fundamentals aside, hoteliers reading this may be thinking, ‘These ‘experiences’ sound exactly like the activities and local attractions we’ve offered as long as I can remember. What’s the difference?’
A polish and a reboot works just fine for a start, says Dan Flower, brand director of prestigious lifestyle concierge service Quintessentially. “In soccer, The Premier League is simply Division One with a funky makeover, and that worked out great for everyone,” he says, “But be very careful with terms and what people expect from them. ‘Content’ is one thing people tend to have a different understanding of, and ‘experience’ is the same – people tend to think it’s just the pointy end, but actually it’s every single touch point.”
Experience is definitely business critical, says Dan – “the increase in experience requests from our members is enormous” – but he urges caution before entering into an experience-first strategy.
“Businesses think, ‘We need to do experiences’ and pack their calendars for the sake of it, and experiences give a perception of value, which I understand. But the experiences that work are the ones that consider the brand DNA, the staff, and the neighbourhood.”
Cy Kelly is owner-director of Made Up, Europe’s top experiential production agency with a client roster that ranges from the BBC to Pernod Ricard and many of Ibiza’s most famous venues.
“It’s said that people are spending money on experiences rather than things, and that’s true,” he offers, “but specifically, instead of collecting consumer goods they’re collecting data – photos, recorded events, and interactions. Social media is the driver; even people who aren’t primed to post on social media are more confident trying out new things, and are taking more photos.”
This is one aspect where your hotel’s falconry activity (or similar) becomes a ‘falconry experience’ – with a memorable, visually appealing setting. We’d also recommend adding a little glamour-stroke-romance, even if it’s simply a cocktail called a ‘Bird of Prey’ served at the end.
Though be clear that our experts do stress that it’s the ‘guest experience’ itself that is most important – offering impeccable hospitality, rather than a shoddy service with activity-style experiences bolted on.
We certainly recommend getting the basics right before serving up any empty coffee cups.