In an ever-evolving post-pandemic world, more and more luxury consumers are choosing casual, upscale experiences instead, according to researchers at the University of Houston, Conrad N. Hilton School of Global Hospitality Leadership.
In a new study published in Journal of Hospitality and Tourism ResearchMengying Chen, assistant professor at Hilton College, and colleagues at Hong Kong Polytechnic University suggest that unplanned purchases of luxury experiences increase positive emotions and a sense of escapism. Hospitality experts define an escape as an intense experience that allows individuals to leave their everyday lives behind in a pleasurable way.
“During COVID, people were stuck at home, and we saw a lot of rushing to buy luxury items as a way to deal with that pressure,” Shen said. “But post-COVID, we’ve seen more interest in unique experiences, including same-day hotel and flight bookings, by people who want to escape this mundane daily routine.”
To better understand the difference in the impact of luxury versus experiences, Chen and her colleagues surveyed dozens of consumers in the United States and Hong Kong about their recent purchases. While impulsive purchases of items such as perfume and sunglasses provided some sense of self, they found that purchasing experiences, such as hotel stays and fine dining, brought higher levels of escapism and positive feelings. And the higher the price, the greater the escapism.
“The perception of escapism is greater the more one pays for the experience,” Shin said. “But exclusivity has to be preserved through higher prices or more people will buy it and run away from it. If it’s not special and unique, it won’t have the same effect.”
Shin adds that while material goods are tangible and actually owned for some time, experiences are intangible and owned as long-lasting memories.
“Because experiences are more personal and unique to your self-concept, people relate to them more than ever before,” Shen said. “And people who make unplanned luxury purchases show more positive emotions because they are away from the regulations and daily pressures, if only for a short time.”
The need to “escape” has been a major driver in the travel and tourism industry’s post-COVID recovery. According to the World Travel and Tourism CouncilIn 2021, 75% of hotel stays were booked three days or less in advance, and 48% were same-day reservations. Domestic destinations were the first to recover, but as borders begin to reopen, international spending has increased. As this trend toward merchandise experiences continues, Shane sees a huge opportunity for luxury hospitality marketers.
“This not only affects consumers, but also those who provide the experiences,” Shen said. “Marketers may find that shifting their focus to exclusive ‘escapes’ can increase profits and bring people closer to their brands.”
YooHee Hwang et al, Unplanned Purchases of Luxury Goods and Experiments, Journal of Hospitality and Tourism Research (2023). doi: 10.1177/10963480231168679
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