Casino operator MGM Resorts International Inc is finding that 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-COVID-19-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.
Photo: Reuters
“Our gaming revenues are up, but relatively flat,” MGM chief executive officer Bill Hornbuckle said, adding that 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 such as restaurants, amusement parks and nightclubs globally was up 65 percent in March, the most recent month for which data is available, from March 2019, before the pandemic, Mastercard Inc’s Travel Industry Trends 2023 report showed.
However, spending by travelers on goods such as cosmetics, jewelry and electronics is up just 12 percent, the report said.
“People love experiences,” Airbnb Inc CEO Brian Chesky told investors on a post-earnings call earlier this month.
On the Airbnb Web site, 95 percent of reviews for experiences receive a five-star review, while 84 percent of home stays receive that rating, he said.
“That means that people on a statistical basis like experiences even more than homes,” he said.
About two-thirds of total travel globally is booked online, but just about 30 percent of things to do while on vacation are booked online, Morningstar Inc equity analyst Dan Wasiolek said.
Traditional hotel and flight operators are trying to tap into that business. American Airlines Group Inc in June started giving loyalty members the ability to earn flight miles and points on entertainment purchases when they book through the airline’s Web site.
The company said it has seen a significant increase in members using the site to purchase event tickets.
Hotel operator Marriott International Inc in February named its first “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 such as an auction for members to learn tricks on the field as well as getting manicures with a professional US women’s soccer player in Washington.
Hornbuckle said that MGM’s occupancy level for November, when the Las Vegas F1 Grand Prix is scheduled, is double that in the same period a year earlier, despite a higher price rate.
He also said that 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 Holdings Inc saw a record number of points redeemed for experiences last year, and points redeemed for experiences so far this year have doubled from a year earlier, Hilton Honors Program Strategy vice president Brad Anderson said.
Competitor Hyatt Hotels Corp launched an experience program in November last year with more than 200 experiences such as 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 percent.
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