In an ever-evolving, post-pandemic world, more and more consumers of luxury goods are opting for unplanned, high-end experiences instead, according to researchers at the 兔子先生 Conrad N. Hilton College of Global Hospitality Leadership.
In a new study published in the , Minjung Shin, an assistant professor at Hilton College, and her colleagues at Hong Kong Polytechnic University, suggest unplanned purchases of luxury experiences increase positive emotions and a sense of escapism. Hospitality experts define escapism as an intense experience that allows individuals to temporarily leave their daily life behind in a pleasurable way.
鈥淒uring COVID, people were stuck at home, and we saw a lot of impulse buying of luxury items as a way to cope with that stress,鈥� Shin said. 鈥淏ut post-COVID, we鈥檝e seen more interest in unique experiences, including same-day hotel and flight bookings, by people wanting to escape that mundane daily routine.鈥�
To better understand the difference in the impact of luxury goods versus experiences, Shin and her colleagues surveyed dozens of consumers in the U.S. and Hong Kong on their recent purchases. While impulse purchases of goods such as perfumes and sunglasses provided some elevated sense of self, they found purchases of experiences, such as hotel stays and fine dining, brought higher levels of perceived escapism and positive emotions. And the higher the price, the higher the escapism.
鈥淭he perception of escapism is greater the more someone pays for the experience,鈥� Shin said. 鈥淏ut exclusivity must be maintained through higher prices or more people are going to buy into it and dilute the escapism of it. If it鈥檚 not special and unique, then it won鈥檛 have the same effect.鈥�
Shin adds that while material goods are tangible and physically owned for some time, experiences are intangible and owned as long-lasting memories.
鈥淏ecause experiences are more personal, more unique to your self-concept, people are relating to them more than ever before,鈥� Shin said. 鈥淎nd people who make these unplanned luxury purchases exhibit more positive emotions as they deviate from daily regulations and pressures, if only for a little while.鈥�
The need to 鈥榚scape鈥� was a major driver in the travel and tourism industry鈥檚 post-COVID recovery. According to the , in 2021, 75% of hotel stays were booked three days or less in advance, and 48% were same-day bookings. Domestic destinations were first to bounce back, but as borders began to reopen, international spending increased. As that trend towards experiences over goods continues, Shin sees a huge opportunity for marketers of luxury hospitality.
鈥淭his doesn鈥檛 just impact the consumers, it impacts those providing the experiences as well,鈥� Shin said. 鈥淢arketers may find shifting their focus to these exclusive 鈥榚scapes鈥� can increase profits and bring people closer to their brands.鈥�