Airlines, hotels branch out with experiences to lure travelers
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[August 14, 2023] By
Doyinsola Oladipo
NEW YORK (Reuters) - Casino operator MGM Resorts International is
finding Formula One's inaugural stop in Las Vegas is as much of a draw
as its slot machines this year, and it is not the only company realizing
that travelers are increasingly seeking out experiences beyond the
traditional draws for tourists.
Global travel has rebounded in a big way in the post-pandemic period,
but travelers are no longer plunking down as much cash on souvenirs, and
instead splurging on sporting events or concert tickets in new
destinations.
Airlines, hotels and travel operators are increasingly capitalizing on
that, venturing beyond their usual services to arrange bookings for
special experiences to keep customers.
"Our gaming revenues are up but relatively flat," MGM Chief Executive
Officer Bill Hornbuckle told Reuters, saying revenue growth was being
driven by entertainment, and luxury food and drink experiences. "There's
just this appetite for experience at a higher level that people seem to
be prepared to pay for."
Tourist spending on experiences like restaurants, amusement parks and
nightclubs globally was up 65% in March 2023, the most recent month for
which data is available, from March 2019, before the pandemic, according
to Mastercard's Travel Industry Trends 2023 report. But spending by
travelers on goods like cosmetics, jewelry and electronics is up just
12%, the report said.
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"People love experiences," Airbnb's CEO Brian Chesky told investors on a
post-earnings call in early August. On the Airbnb website, 95% of
reviews for experiences receive a 5-star review while 84% of home stays
get that rating, he said.
"That means that people on a statistical basis like experiences even
more than homes," he said.
Chesky said Airbnb, a website that allows travelers to book short-term
room or home rentals, plans to expand its experience offerings in coming
years.
Other companies have also found revenues from experiences are growing.
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Online travel company Tripadvisor's experiences platform Viator posted a
59% rise in second-quarter revenue to $216 million. The platform
accounted for about 44% of the company's revenue in the quarter, up from
33% a year ago, according to company figures.
"2023 is on track to be another record-breaking year for our category.
We’re outpacing last year’s and pre-pandemic bookings," said a Viator
spokesperson.
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![](../images/081423PIX/busine8.jpg)
A heart is formed with window
lights at the MGM Grand hotel-casino during the shutdown of all
casinos and nonessential businesses, an effort to slow the spread of
the novel coronavirus, in Las Vegas, Nevada, U.S. April 3, 2020.
REUTERS/Steve Marcus
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Around two-thirds of total travel globally is now booked online but
just about 30% of things to do while on vacation are booked online,
said Dan Wasiolek, Morningstar equity analyst.
TRADITIONAL OPERATORS MUSCLE IN
Traditional hotel and flight operators are trying to tap into that
business. American Airlines in June started giving loyalty members
the ability to earn flight miles and points on entertainment
purchases when they book through the airline's website. The company
said it has seen a significant increase in members using the site to
purchase event tickets.
Hotel operator Marriott International in February named its
first-ever "chief customer officer" to develop and execute the
company's global consumer strategy.
"We've been showcasing our experiences, which to me is about giving
people access to things that they either couldn't necessarily plan
or organize themselves," the new executive, Peggy Roe, said in an
interview.
She cited examples like an auction for members to learn tricks on
the field as well as get manicures with a professional U.S. women's
soccer player in Washington.
Hornbuckle said MGM's occupancy level for November, when the Las
Vegas F1 Grand Prix is scheduled, is double that in the same period
a year ago, despite a higher price rate. He also said the biggest
booking day of the year for the company in Las Vegas was the day the
National Football League's Las Vegas Raiders released their yearly
schedule for games.
Hilton Worldwide saw a record number of points redeemed for
experiences in 2022, and points redeemed for experiences so far this
year have doubled from a year ago, said Brad Anderson, vice
president of Hilton Honors Program Strategy.
Competitor Hyatt Hotels launched an experience program in November
2022 with over 200 experiences like foraging in a Hungarian forest
for truffles with expert hunters and their dogs or taking a spritz
cocktail masterclass in Venice. The company said it has since
increased its offerings by about 25%.
(Reporting by Doyinsola Oladipo in New York; editing by Deepa
Babington)
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