The Experience Economy > The Hospitality Industry

BBH Stockholm
BBH Stockholm
Published in
4 min readAug 9, 2019


The rise of big data, the experience economy & the Hospitality Industry
Illustration by Adam Lindfors

Where are we heading in the hospitality industry? Learn more about the experience economy and its effect on the hospitality industry and how it changes the competitive landscape. Learn about how it changes the guest preferences and their behavior.

The most promising companies within the hospitality sector continue to expand supply in promising growth markets helping them tap into rising global demand for “off the beaten path” experiences — and will likely continue to introduce innovative concepts, products, services, and loyalty strategies to become the go-to brand.

With the hospitality industry reaching almost 10 years of year-on-year growth, and with the potential of broader economic slowdown looming, brands must prepare for the possibility of softening demand. While many proved their ability to drive growth in a bull (boom) market, the bear (bust) market, while typically short-lived, create the environment for loyalty programs, product, and customer experience initiatives to prove their worth. It is at these times brands that can weather any storm by paying close attention to trends and opportunities in the long term can be well-positioned in the next cycle when the bull market returns.

Experience economy

Harvard Business Journal coined the term already back in 1998 and described it as the next step in the progression of economic value. It is as valid as ever before as people increasingly demand a more personalized and tailored experience to participate in a value exchange. While economists have typically lumped experiences in with services, experiences are a distinct economic offering that is as different from services as services are from goods. Experiences are not an amorphous construct but just as much an offering as any service, good, or commodity.

Today, many businesses put emphasis on designing engaging experiences that drive brand engagement which is why companies have to create unique and extraordinary experiences to beat the competition. Thus, it comes as no surprise that the hospitality companies try to design unique brand experiences for their increasingly demanding guests that are based on the guest’s personal experience preferences.

Illustration by Adam Lindfors

Such initiatives include niche activities and tapping into the in-destination activities market to expand the brand journey. The 183 billion dollar in-destination activities industry (by 2020) is undergoing a much delayed digital revolution themselves by standardizing booking and by plugging into vast inventories of real-time local activities content. This gives both incentives and opportunities to connect the guests of hospitality companies to new unique experiences that drive incremental revenue for all players involved.

Sharing Economy

Which leads to the next macroeconomic phenomenon. The sharing economy. In a sense, part of the experience economy.

The sharing economy is based on activities of acquiring, providing or sharing access to goods and services that are often facilitated by a community-based online platform. The rise of big data has changed the competitive landscape and made it easier for asset owners and those seeking to use those assets to find each other.

Companies like Airbnb that don’t necessarily have to comply with the same rules and regulations as traditional hospitality companies are taking full advantage while a few of the more traditional hospitality players are innovating with community-based platforms themselves. A few other hospitality players are already innovating by fusing new rental inventory with hotel-style amenities such as concierge services, elevating product quality, and integrating rentals into different kinds of loyalty programs.

Companies such as Wyndham, the world’s largest vacation ownership, exchange, and rental company has recognized the importance of building digital marketplaces for travelers with a more flexible range of places to stay and more flexible prices to match. Wyndham acquired Love Home Swap, a startup out of London that lets people book a time to stay in other people’s homes, while at the same time list their properties for people to book.

As Deloitte’s excellent report ‘2019 US Travel and hospitality outlook” suggests, the hospitality industry might stand to benefit from rethinking the relationship with private rentals to go from adversaries to allies.

Personalization / Autonomy

The common denominator in the two sections above is the rise of big data and personalization. Big data allows for a more flexible customer experience and new levels of personalization — which has become a key pillar of customer strategy as it redefines the customer relationship.

By tapping into big data analysis hoteliers can reach the end-users through their preferred touchpoints based on behavioral patterns and tailored insights. The modern and hyper-connected guest expects to be able to interact with hospitality companies across a variety of digital channels and receive quick responses. This creates an opportunity for guest decision making — and because all decisions can be captured — the hoteliers get valuable insights into guest preferences. This allows them to understand exactly what each guest wants, and when they want it.

It sets the basis for an autonomous experience where the guest is in control and has the freedom and flexibility to personalize their own guest experience (mobile check-ins, room selection, in-room smart tech, chat concierge services, etc).

By leveraging guest microdata in real-time and in ways targeted throughout the customer journey the hospitality companies can take concrete action to better different touchpoints which naturally leads to more repeat bookings and upgrades for the customer.


Macroeconomic trends have changed the guest — brand relationship and made it ever so important to provide experiences that are based on the preferences of the guest. It’s about building trust for a brand by optimizing each instance, each interaction and every touchpoint that their customers are faced with. Give the guest the power to control their own experience.

Written by Alexander Niléhn and Gül Heper of BBH



BBH Stockholm
BBH Stockholm

We prototype, design, build and scale captivating customer experiences that generate commercial success.