Experiences vs. Things: Where the Money’s Going

23.07.2024 - 14:31 / skift.com

You can’t go too far in travel industry circles without hearing that activities and experiences represent one of the biggest (and often untapped) opportunities for multiple businesses across the industry. 

Its potential should come as no surprise: Going back to the 1980s, consumers, particularly in affluent countries, have shown an increasing preference for spending their money on experiences over possessions. That spending crashed during the pandemic, but it has been rapidly recovering.

This trend is particularly prominent among Millennials and Gen-Z, who spent a portion of their teenage or young adult years constrained by Covid-related travel restrictions. A recent survey by GetYourGuide indicated that guided tours are gaining popularity among these generational groups. They’re driven by a desire to get closer to the society or geography they are visiting, to immerse themselves in the culture, and to engage with locals. Social media has also influenced this trend, with consumers seeking shareable experiences.

This also plays out in the booking motivations for tours and experiences. Our research shows that exploration, immersion, and creating new memories are the order of the day. Again, this is particularly prominent among Millennials and Gen-Z: A January 2024 Skift Research report showed a higher propensity for adventure spending, with 64% of these age groups allocating more than $200 on adventure activities during their last trip. When engaging in adventure tourism, these generational segments are primarily driven by a desire to connect with nature and explore new and unfamiliar destinations.

These trends have not gone unnoticed by the financial sector. According to Skift Research’s recent Venture Investment Trends in Travel 2024, venture capital investment in the travel sector hit a decade-low in 2023. But the experiences space was among the few pockets of growth. 

Tours and experience online travel agencies, Klook and Get Your Guide, made up almost half of the top 10 VC-funded companies in the travel sector in 2023.