With high spenders eschewing possessions for experiences, hoteliers might want to redirect their focus.
What makes us happy? Money? Yes, to be happy you need to cover the necessities of life, but after that it appears that happiness doesn’t grow in line with income. Richard Easterlin, an economist who studied happiness data in 1974, theorised that as countries got richer, they didn’t get happier. Known as the Easterlin Paradox, the implication is that happiness is based on how we compare ourselves with those around us and that although life satisfaction rises with income, it is only to a certain level – after that, the marginal gain in happiness declines.
The World Happiness Report 2019, edited by John F Helliwell, Richard Layard and Jeffrey D Sachs, endorsed these earlier findings and determined that income counted for life satisfaction, but only in a limited way. Other things matter more – community trust, mental and physical health, and the quality of governance and rule of law.
Are you experienced?
As what makes us happy comes under ever greater analysis, it seems it likely won’t be found in what we buy but in what we do. There is a movement away from materialism, and that trend is beginning to be reflected in the hospitality industry, too. The emphasis is now on getting customers to part with cash for unique experiences rather than possessions. If some hoteliers have their way, happiness will always be in the memory rather than in the hand (with the added benefit that the experience might be plastered over Instagram by guests in an act of free marketing).
Research from Barclaycard in its October 2018 report found that more than half of consumers would rather spend money on entertainment and events than things. And many in the hospitality business are beginning to focus more keenly on experiences rather than just accommodation. Marriott International has linked its reward programme, Bonvoy, to a host of categorised opportunities, creating an “experience marketplace” for curated activities. The Bonvoy site opens the door to unique entertainment, sports and lifestyle events. A VIP ticket to the Singapore Grand Prix? See The Who in Boston? Maybe an exclusive “Da Vinci” dinner in the Louvre Paris? Other companies are following on. Wyndham now offers a taco and mezcal tour in Mexico City, a desert safari in Dubai and a pizza walking tour of New York City, all delivered by local agents.
The trend has been quickly adopted by Airbnb, which encourages hosts to add ideas for different encounters to their accommodation offer, and it is not alone. Even automobile companies are getting in on the act. Jaguar Land Rover’s In Motion Ventures (inmotionventures.com) is rolling out an app, The Out, that allows Londoners to experience luxury cars without having to buy one. Order from the app and it will be delivered to you for one or two days’ rental.
If happiness isn’t a Jaguar, maybe tickets to Glastonbury will fit your well-being bill. This year, Bristol hotels partnered with Sincura, a luxury concierge company, to offer clients a chauffeur service to the Glastonbury festival and VIP passes to mingle with the stars. All very enjoyable, and all very expensive.
Stuffocation
So is it true? Has the wealthy business traveller reached a stage of “stuffocation” – that state where the garage at home is so full to overflowing with things that are no longer needed that the car won’t fit in? Or is there still space for the well off to keep buying bits and pieces to fill the shelves? The general consensus of the credit card companies is that personal spending for those on a high income is swinging in the favour of progressive hoteliers who provide something different, unique and truly memorable along with a room.
So why aren’t more hotel groups grasping this opportunity? In the Barclaycard report, the top reasons given by brands for not prioritising experience was a shortage of expertise (31 per cent), followed by a lack of financial resources (26 per cent). It seems that it might be time to wake up. The drive for new ideas and entrepreneurship is most acute where there are business needs. Given the state of the UK hospitality industry, which is currently threatened by potential negative outcomes from Brexit, now would be a good time to focus on something more adventurous than bed and breakfast.
Derek Picot has been a hotelier for more than 30 years, and is author of Hotel Reservations.
