What can tourist destinations learn about the experience economy, where human engagement is leveraged specifically to create a meaningful and memorable event? Rather than boasting about the best sandy beach or exclusive restaurant, today's destination unique selling points lie more within subtle details such as local culture and authentic exchanges with the place and its people.
What is ‘experience’?
Joseph Pine II and James Gilmore published 'The Experience' in 1998, which forever shifted business paradigms. Pine and Gilmore argued that economies have evolved from the agrarian economy to the goods-based industrial economy to the service economy and eventually reached the experience economy. What is an experience? In the words of Pine and Gilmore, "an experience occurs when a company intentionally uses services as the stage, and goods as props, to engage individual customers in a way that creates a memorable event".
The experience economy has inspired business leaders' vision of their companies' offerings. Many destinations claim they offer experiences, but do they really? Is experience a synonym for tours and activities?
On the other hand, happiness and well-being researchers advocate that experiential purchases make people happier than material purchases. When choosing a European destination, Generation Z looks for opportunities to do specific activities. Their top European travel experiences include trying local food, learning about urban culture and doing cultural activities.
Hence, destination marketers and managers must reflect on their definition of an experience and align their offerings with tourists' expectations.
Why is experience important?
Tourist destinations used to compete on points of parity. Most island destinations showed their sandy beaches in their tourism promotion photos. Yet, tourists cannot associate these sandy beach photos with any specific islands. Competing on points of parity leads to the commodification of destinations and price wars.
Lower profit margins must be compensated for by more tourists to achieve profits. Consequently, destination carrying capacity is constantly tested, and the quality of life for the local community suffers.
How can tourist destinations get out of this downward spiral?
Destinations need to compete on their unique selling points, such as their cultures and lifestyles. After the COVID-pandemic, Japan has become one of the trendiest travel destinations in the world. When tourists visit Japan, they want to experience the Japanese way of living, taste Japanese cuisine and enjoy the onsens hot springs.
Tourists want to immerse themselves in Japanese culture, participate in festival ceremonies, visit temples and walk around with the locals. Japanese culture provides an authentic experience that is only available in Japan. By the way, Japan is an island country.
How do destinations become authentic?
What are the rituals, ceremonies and festivals only available in the country? Think about Japanese kimonos, tea ceremonies, onsens, cherry blossoms and festivals. For Switzerland, alphorn, fondue, raclette, skiing and hiking in breathtaking landscapes are famous representations. My favorite are the Swiss carnivals (Basel, Bern) where local bands dress up in traditional costumes and march in the streets. The noise and color of these carnivals are hidden gems for tourists because they can join the local community celebration and enjoy the unique atmosphere.
Letting locals tell stories in their way is the best path to authentic experiences. Recently, I joined a Dubai tour offered by a local entrepreneur. A young local man explained the relationship between the United Arab Emirates (UAE) and Dubai, the history of Dubai, the differences between beliefs and culture, the marriage system of Islamic culture and its practice in Dubai, the consequence of divorce on the husband and the wife, and tips to bargain in the spice and gold markets. He was proud, witty, genuine and considerate. We liked his authenticity, appreciated his insights and trusted him immediately. We happily shopped at his friends' stores! He hardly pointed to any landmarks or explained the history behind statues. The walking tour was a stage for him to tell more of a local story, and walking together developed a team spirit. He figured out that people do not care much about the history of past glory but want to know how locals live their daily lives. This tour guide, or storyteller, helped us understand the values, priorities and challenges of an entrepreneur in Dubai.
Destination marketers and managers should invite the local community to take an inventory of their unique culture, rituals, festivals and lifestyle. From the inventory, stakeholders identify the best approaches to invite and introduce tourists to these cultural events. Destination managers could add tourists as stakeholders instead of creating something only for tourists to avoid the commercialization of culture and preserve the authenticity of these experiences. Furthermore, destination marketers can help tourism professionals identify interesting topics (not limited to local history but also everyday life) and improve their storytelling skills.
How to co-create the experience?
Nowadays, tourists do not want passive participation but prefer to engage in activities to create unique experiences. Tourists want to encounter the local cultures with their five senses. Take culinary tourism as an example. Tourists want to taste dishes seen on YouTube. Tourists wish to assess the difference between a local dish and the modified version found in their country. For example, how does fondue taste in Switzerland versus fondue back home? What are the different ways to enjoy fondue? Destination marketers need to monitor the trending topics associated with their destinations, share these insights with local businesses and help companies create experiences for tourists.
The Swiss have a unique relationship with forests, they love hiking and spending time in the mountains. Offering a combination of hiking and fondue enables tourists to participate in different activities and enrich their five senses. At the same time, interacting with tourists grants the local community the opportunity to preserve its lifestyle. These social interactions reduce locals' negative perceptions of tourism while contributing to local pride.
Stand out with authentic experience
New destinations build their brand awareness by emphasizing their points of parity to famous destinations and hope to win over market share from dominant competitors. For example, emphasizing shopping or beautiful hotels does not help a destination stand out because all destinations have them. Competing on points of parity means substitution. On the contrary, unique selling points drive tourists to destinations.
Why do experiential purchases make people happy? Experiential purchases enhance social relations more effectively than material goods purchases and social relations are essential to personal well-being. Offering opportunities for tourists to mingle with the locals creates emotional experiences. It can be something as unique as participating in a religious ceremony or as simple as playing sports together. For example, the Dubai government has actively worked to bring locals and tourists together in their public spaces, such as parks and biking trails. The serendipity of interacting with the locals brings joy and creates authentic, lasting memories.
