Economy In The Hospitality Sector Essay


Discuss about the application of the idea experience Economy in the Hospitality Sector.



The management of the hospitality and hotel is an evolving process. The history of the hospitality industry highlights that this industry has transformed from social construct to a commercial phenomenon. However, the hospitality industry is a sector of social integration, where people come from different cultures and religions (Loureiro 2014). A cultural diversity occurs in the hospitality industry, which is an important aspect of the social construction. In the recent years, hospitality sectors are considered as the commercial place as it contributes a good proportion of the economy of a country. This sector is associated with the social development and economic development of a country. This study deals with the role of experience economy approach, which ensures that hospitality differs from past cultural, social and historical meaning of hospitality.

Hospitality industry and the experience economy approach

Experience economy is considered as the fundamental change that is currently going on the modern economy (Ali et al. 2016). In the recent years, service or goods are predominate economic offering in the industrial economy. In the hospitality sectors the goods are treated as the commodity and it can move from the industrial economy to a service economy. For the hospitality sectors, the experience economy focuses on the customer's experience. However, customer's experience refers to the interaction between the customer and the organization based on the service or product. The hospitality sectors provide service to the customers to engage them with their organization. As for example, Hotel Windsor a popular hotel in Australia focuses more to enhance their customer experience by offering innovative service to their customers. They offer the online opportunity to the customers to book the service. This is a significant way of such organization to enhance the customer experience ( 2018). They have various departments to complete their operation, which allows such organization to solve the customer query. However, they have a special department to solve the customer query regarding any service within 10 hours. This enhances their economy by increasing the customer experience.

Experience economy in a hospitality sectors highlights the experience that the customer obtains from the seller in exchange for money (Manthiou et al. 2014). However, experience economy is a new economic era, where the business industry makes a memorable event for their consumers. In the context of the hospitality industry, customers have a high expectation regarding the service. Hence, hotels have to increase their customer service as well as the facility which will make their customer valuable. However, if the hospitality sectors provide excellent service to the customers then it will help them to satisfy their customers and build a good relationship with the customers. Service and products of the hospitality industry play an important role to add value to the customers. However, if the hospitality sector provides a comfortable and spontaneous service along with the effective communication then it will be beneficial to enhance the customer experience in the experience economic era.

Role of “experience economy” approach to understand that hospitality industry differs from the previous cultural social and historical meaning of hospitality

In previous hospitality industry is associated with the social integration. However, social class, status, and ethnicity have a great impact on the hospitality sectors. The hospitality industry provides economic support in the development of the education. On the other hand, it provides protection to the visitors while they are staying in a hotel or hospitality sector. Therefore, the cultural meaning of the hospitality industry refers to the cultural diversity in this industry. People from different cultural backgrounds come to visit in the hospitality sectors. This allows such sectors to bring cultural diversity in their organization. Hence, this industry has a great contribution to the social and cultural development. The historical meaning of the hospitality industry focuses that the term hospitality, which means the taking care, helping and pampering others (Radder and Han 2015). In previous, the aim of the hospitality industry was to provide excellent customer service and to satisfy their customers. There was no account of analyzing the customer experience in this industry. The idea experience economy ensures that hospitality sector is not just the cultural and social development but it has more importance in enhancing the customer experience (Chang 2018). Therefore, to meet the needs of the customers is not one and only motto of the hospitality industry. In the recent years, this sector gives their concern to the customer experience by providing unique service. Experience is the core area of the hospitality industry as by enhancing the customer experience this sector can enhance their economic growth. As for example, Hotel Windsor offers far-reaching service to the customers by creating a unique design in their setting. They have various small departments and each of the department is specialized for a particular service to provide a better service to the customers. Such design in their organization is helpful for them to make their business unique in the global market.

According to the previous concept, the customers buy quality and service from the hospitality industry. However, experience economy approach shows that customers buy experience and memory from the hospitality industry rather than the service quality and service delivery (Harkison et al. 2018). Hospitality industry offers accommodation and catering service to the customers, which highlights the experience economy as it provides more experience to the visitors along with improving the economy. Hence, it can be said that hospitality sectors are not only associated with the cultural and social development and the delivery of the service but also enhances the customer experience. This sector not only just sells the service but also sells the experience to the customers.


The entire piece of the study deals with the experience economy approach in the context of the hospitality sector. However, experience economy focuses on the customer experience. As per the history, the hospitality sector is considered as the place of social and cultural integration, where people from different cultures come and take service. Hence, this sector has great contribution in developing cultural diversity in their business by providing service. However, as per the concept of experience economy, it has been found that hospitality industry is a sector, from where customers buy experience in terms of service.


Ali, F., Amin, M. and Cobanoglu, C., 2016. An integrated model of service experience, emotions, satisfaction, and price acceptance: an empirical analysis in the Chinese hospitality industry. Journal of Hospitality Marketing & Management, 25(4), pp.449-475.

Chang, S., 2018. Experience economy in hospitality and tourism: Gain and loss values for service and experience. Tourism Management, 64, pp.55-63.

Harkison, T., Hemmington, N.R. and Hyde, K.F., 2018. Creating the luxury accommodation experience: case studies from New Zealand. International Journal of Contemporary Hospitality Management, (just-accepted), pp.00-00.

Loureiro, S.M.C., 2014. The role of the rural tourism experience economy in place attachment and behavioral intentions. International Journal of Hospitality Management, 40, pp.1-9.

Manthiou, A., Lee, S., Tang, L. and Chiang, L., 2014. The experience economy approach to festival marketing: Vivid memory and attendee loyalty. Journal of Services Marketing, 28(1), pp.22-35.

Radder, L. and Han, X., 2015. An examination of the museum experience based on Pine and Gilmore's experience economy realms. Journal of Applied Business Research, 31(2), p.455. 2018. Hotel Windsor. [online] Available at: [Accessed 17 Feb. 2018].

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