The power of experience economy in tourism sector

NAIROBI, KENYA: Millennials more likely to buy experiences than commodities, forcing market players to invest in more customer-centric models.

In 2015, leisure spending in Kenya stood at 67.5 percent almost double that of business spending at 32.5 percent in the local tourism sector. This is according to the United Nations World Travel and Tourism Council’s (UNWTTC) report published every year. In the same period, local (domestic) spending stood at an impressive 59.0percent, significantly higher than the foreign spend at 41.0percent; no doubt that Kenyans are steadily moving away from ownership to experience.

The travel sector has probably bore a huge impact of the experience economy ecosystem more than any other; travelers now demand for something beyond a travel service, to a memorable experience that will be shared with friends. To add to this, travelers are now more than ever searching for user generated activities and local experiences as compared to signing up already established and ‘boring’ itineraries. For instance, the age of travel communities on social media and online forums is slowly becoming a reality, with travelers crawling the web to find like-minded people on discussing either their past, or recent experience or their expectations of the subject destination.

Estelle Verdier, Managing Director for Jumia Travel highlights some interesting revelation; visitors booking on the online portal are increasingly keener on the kind of experience to be sampled on the destination. Bed size, in-room entertainment, and room service are somehow less popular on the frequently asked questions, coming only after touching on the need for ‘personal’ recommendations for staff members known to give outstanding customer experience.

“For instance, free airport pick up is one of the most sought after value-add on our travel.jumia.com, but while a guest may not necessarily come back to the hotel merely because of the service, a human connection with the chauffeur, warm welcome and wistful is more likely to earn a comeback, and more potential customers from the resulting sharing of experience”

Increasingly, CMOs (Chief Marketing Officers) are attaching more value to the human factor and its position on the value chain. This has led to a progressive shift in branding; companies have to invest more in the experience as this is what separates them from similar providers and affords them an upper hand in a saturated market. Customer experience goes beyond the automated instructions on where to insert packing fees, to the need for a cheerful and knowledgeable person to man the lot, and direct drivers.

The shift from a product-driven economy to an experience-central kind of culture is perhaps supported by the growing middle class in the country that now has more disposable income to share, and the right to choose their supplier, supported by an influx of vendors. A Q1 report on Kenyan economics by World Bank predicted a growth and rise in the economy from 5.9 percent in 2016, to 6 percent in 2017.

For vendors to capture the new budgets allocated to household travel and adventures, they must then move from a product-centric model to embrace a more customer-centric structure that will not only match, but supersede customer expectations.

The absorption of technology into tourism and travel industry has played a great role in the shaping of this ecosystem; providing a medium for sharing and an interface to relay feedback. In a recent Customer Experience Management Africa conference held in Cape Town, Author and VP for Customer Experience Professionals- Qaalfa Dibeehi noted that “Digitally empowered customers have given rise to a new era, the age of the customer. This is forcing companies to become customer centric,” The CX guru, who has authored yet a second book on customer service excellence candidly remarked “Whether your business is B2B or B2C, every business is in fact, person to person,” according to a post published on Siliconcape.

The Experience Economy was made popular by James Pine and Joseph Gilmores, gaining tremendous fame and support after a 1998 publication in the Harvard Business Review.

The two keenly observe that consumers are evolving from the commodity-driven phase, thus a need for sellers to distinctively separate goods, service and experience as offering independent of each other; but which put together total into a wholesome, unforgettable experience.