Tourism - How Economy Era Change?

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How economy era change? Following the agrarian economy, the industrial economy, and the most recent service economy, now entering the era of experience economy (Harvard Business Review , 1998). Nowadays customers more likely to spend extra more money on better option in order to obtain higher experience values compare to cheaper or budget option within the same market sector with less experience. That is the meaning of experience economy statement, where people tend to spend more to enjoy additional experience benefits, its not solely just about the product anymore. Experience economy also can be define for business to create and build up customer experience level in order for a business to outperforms other competitors. According to Pine and Gilmore, customer tend to pay more if they enjoy receiving additional experience value (Pine & Gilmore, 1999). Therefore experience economy is important for a business to understand especially tourism and hospitality enterprise which their business based on providing customer experience. This essay will discuss and critically analyse the impact of experience economy towards tourism and hospitality enterprises.

What cause the booming of experience economy? One reason is millennial. According to World Economic Forum and Inc Newsletter, millenials is the main reason behind the advancement of experience economy as the next economy. Research show that about 72 - 78 percents of millenials choose to spend money for desirable experience rather than materialistic benefit (World Economic Forum, 2019)(Gherini, 2018). Market is about supply and demand, where there is demand there will be a supply that follow it up. Right now most people on the age of productivity is consist of millenials generation.

According to Bain management consulting company, bad customer experience lead to more than 80 percents of customers leaving the brand towards other competitors which provide better customer experience (Bain Global Management Consulting Firm, n.d.). In New Zealand many younger generation such as university students prefer to stay in an accommodation that provide unique experience rather than common basic necessity. Good customer experience does not always mean expensive premium quality, but rather new and unique experience.

In relation to experience economy, customers is not the only party that affected by the changing in economy, but also the workers of tourism and hospitality enterprises hold a major part. When discussing an enterprises, employee can be consider as the front line or faces of the business. Employee workers are highly affecting business financial income. They are the one that have to dealt with customer, it is their job to provide the services that people are looking for. In experience economy era, employee experience became more important than never. Many customers prefer high quality employee service that can deliver high quality experience. According to Forbes, employee experience is everything an employee sees, feels, observes and experiences throughout their journey at an organization. This includes culture, the technology, and the environment. Employees must thrive at work in order to deliver this customer experience. The employee experience must be a priority because it dictates the company's culture. The company culture determines the customer experience (Reilly, 2018). Therefore impacting the standard and raising the bar of what company should look into when hiring new employee. This greatly affect workers and change the perspective of work force and the ability to provide the service.

Many tourism and hospitality enterprises affect by the rising of experience economy, among them is Yha Queenstown Lakefront Backpackers. They provide all range of room from budget to premium quality services, cater to most need. Located in the heart of New Zealand tourism, one of the busiest city in south island, Queenstown. Facing towards the amazing view of lake Wakatipu. With new generation now being the largest part of consumers, business are now force to change their focus to accommodate millennials customer who value experience above all else. Millennials are more leaned on having great experience with friends and family rather than just obtain a products. When most people spend their money to get a great experience, business are required to innovate themself in order to stay competitive and relevant. In order to cope with the rise of experience economy, Yha Queenstown Lakefront Backpackers should actively review customers feedback, in order to research what things are customers into at the moment, what they like and do not. In addition they also provide customers with a recreation room full of interesting thing from audio visual room for a movie night to a room full of bean bag and massage chair. By designing an unique experience that differ from other competitor, they provide customers with great experience during their stay in the hotel. Third but not least, they should take a closer observation towards a customer breakdown. Breakdowns sometimes happen but easy to miss. Hotel require a system to identify the problem and address the problem in order to make sure it is not a recurring problem. A particular group of students from Dunedin state that they have been enjoying their stay at Yha Queenstown Lakefront Backpackers, in fact they have decide to stay for multiple time, when they plan their annual bond trip, for a reasons that this accommodation has been providing them with a great experience over other hospitality of the same caliber. Many students know about this place mostly from a good word of mouth from others who enjoyed staying in this accommodation and spread the news to another to share the good experience that they taste during their stay. In addition according to a journal article by Seohee Chang, growing number of individuals and families are taking mini vacations, such as overnight stay at a hotel without actually travel out of their home town, in order to only enjoying the experience the hotel provide, such as room services, hotel facilities, amenities and dinning experience (Chang, 2018). The time of hotel just being a place to sleep are now gone, the experience of staying is what people are looking nowadays.

In order for business to stay relevant and competitive, they must create a unique design that people will not forget once they ended their stay, a design formula must be implanted and use in application. According to Aho, a professor of tourism from Preston University, there are seven stages of tourism experience, each can fall into before, during and after stages. The first stages is orientation, can be defined as a necessary starting point of the process leading to customer decisions making. This is the stage where people gained interest over the tour destination. A business should maximize their efforts at this stage by making sure that people aware of their business and what kind of experience that they deliver, this can be done by purchase a brochure or advertisement which enough to gain people attention. The second stages is attachment, this stage is where people gain stronger interest over a destination. This can be achieve by doing a research of what people are after nowadays and doing something unique which not yet available in the area. After deciding to buy and advertisement, a business should design it in a way to show and provide clear explanation of what kind of great experience people will get in this destination. This will led people to build expectation, its the business goal to fulfil customers expectation. After successfully gain people desire to visit the destination, people will plan the trip and will actually led them to book the trip, which bring further to the next step, the actual visit. Visiting is the stage where customers actually engage with the business. The moment where customers will gain a new unique experience as the purpose of their trips, to get away from their daily life with repetition experience. This stage can by improve by made sure the customers get what they expected by inquired if they need anything. It can lead to immediate reactions or longer memory experience that they will not forget. Which led to the next stage, evaluation or comparison. Customers will retain from memory and compare the newly acquired experience with the other experience they had before, if the newly experience can top off the old one, it will leave a good impression in their perspective and vice versa with the bad experience. Whether it is a bad one which people will not come back and resulting a bad review or bad word of mouth to their friends and families which led to the lose of potential future customers , or a good experience which led to a good review and a good word to their colleagues and led to a future new or recurring customers. When people experience something new and unique they will try as hard as possible to keep the memory of the experience alive and memorable. This stage is where people store their experience in many form, physical, social and mental. A good tourism enterprises, should provide the customers with long lasting experience even after the end of the trip. This can be achieve by providing a small memorabilia such as provide the customers with an option to take a picture with something that can relate them with the experience or a souvenir store which customers can buy a range of goods such as, a key ring, display, a mug or a refrigerator magnet related to the place. Unfortunately nothing last forever, everything is subject to an end. Memories are destined to fade away. People wish that something good never meet its end, that what bring the next stage, reflection. In this stage people got a chance to relive the memory by seeing the picture or video taken during the trip, recalling the events occurred, relate to with friends or families who shares the same trip to strengthen the experience. When people experienced a great trip, mostly will tell their friends and families about how awesome their recent trip is, they will cherish the moment of sharing the experience with people who never participated in the visit stage. This stage is enrichment, where people who never participate in the visiting stage will acknowledge the experience, this can led to the first two stages, orientation and attachment. The use of memorabilia strengthen the story and therefore the storing stage also involved in this stage. This can led to a good or bad word of mouth, which again led to a potential new customers in the future (Aho, 2007).