The7stars’ latest white paper, The Experience Economy Rebound, details the road to recovery for the travel, hospitality and leisure sectors; industries which were placed on life support in 2020 as restaurants closed their doors and events were cancelled, rescheduled, and cancelled again. The past year has told a tale of two halves when it comes to financial stability. While millions were placed on furlough and faced uncertain job prospects, others built up savings. According to ONS data, between April and June 2020, households saved an average of 29.1% of their income – smashing the record set three decades ago.
However, personal finances are not the only factor likely to impact the rebound of the experience economy. Even as the vaccine rollout progresses, many remain reluctant to indulge in experiences until they are assured of their safety. Following the government’s announcement of the roadmap for de-escalating lockdown, Lightbox Pulse research found the emergence of three distinct groups, each of which will be crucial to an economic rebound in 2021.
The most lucrative of these groups is the Experience Enthusiasts, comprising 28% of the population. This group is desperate for a big summer and is willing to splash savings to achieve that. Experience Enthusiasts worry less about coronavirus and are comfortable with visiting virtually every location as soon as they reopen, including airports; making it a matter of when, not if, they book their next holiday. With this group so willing to engage in experiences, the time for brands to convert their enthusiasm into sales is now.
Around half (49%) of Brits are Pragmatic Participators. While they are cautiously optimistic of a return to normality, members remain to be convinced. Their summer will initially revolve around domestic trips – though they could be swayed if vaccine passports become the norm. Negotiating with this group will undoubtedly prove challenging for brands; however, they are there for the taking. By boosting confidence through cancellation guarantees and flexible rebooking, this group’s long-term potential can be unlocked.
The Social Sceptics will be the toughest for brands to convert. Social Sceptics are unconvinced of the safety of travel and are nervous about booking until they are assured their plans will go ahead. This group is keeping it local in 2021 through smaller, family-oriented experiences. This does not mean, however, that brands should simply ignore them: rather, through targeted messaging in trusted sources, they will be persuaded to eventually return to the experience economy. And with many in this group potentially saving up disposable income two years running, the onus is on brands to be at the forefront of their future plans.
Come the end of 2021, the ‘winners’ of the experience economy will be those brands that not only recognise the varying financial challenges facing the nation, but also react to the nuances in how each of these groups is willing to participate in travel and experiences.