Experiential travel is defined by active connection with a destination’s culture, people, and environs. In a world of increasingly homogenized cities and suburbs, experiential travel is a return to the novelty, enrichment, and local moments that collectively create a sense of place. Experiential travel itself is not new; what’s unprecedented is the scale and velocity at which this demand is unfolding along with the level of opportunity and disruption it presents for participants in the travel industry.

Given that the term experiential travel is so encompassing, it is helpful to give some historical context in order to frame where we are headed.

Artisanal Economy (18th century and earlier) - For most of economic history, artisans and apprenticeship were the primary economic engines of global growth and consumption. Almost all experiences associated with travel were unique to a region including food, crafts, customs, and accommodation. Travel was limited to affluent families, and young Europeans in particular were encouraged to go abroad on a Grand Tour to immerse themselves in the arts and culture of a particular destination via extended sessions with local experts.

Industrial Revolution (19th century) - The invention of manufacturing lines – with a relentless focus on standardization and efficiency – created unprecedented growth and increased affluence for the middle class, laying the foundation for a surge in domestic travel along with branding and management philosophies applied to the services sector.

Rise of Global Brands (20th century) - For this newly formed middle class, brands emerged that served as desirable stamps of quality assurance. Brands achieved this - in a world before online reviews or 360-degree videos – and managed growth by applying and enforcing rigorous standards. The resulting efficiency and demand led to a proliferation of brands and increasing levels of homogenization following tourists to many of the most iconic travel destinations in the world.

The Experience Era (21st century) - Technology platforms and societal shifts are creating new ways to discover, consume, and share unique experiences. With 2M+ listings, hosts on Airbnb now offer more accommodation room nights – each one unique – than any hotel chain. Similarly, shifting consumer preferences and distribution networks have led to an explosion of micro-breweries from a total of 90 breweries in 1980 to 2,500+ today. Both illustrate the rapid shift in demand for differentiated experiences and decline in distribution costs for small producers to reach customers.

Experiential travel is driven by the convergence of accelerating macro trends: the unprecedented growth of global travel, a deep seated desire for enrichment, the proliferation of social media, digital curation, and enabling technology platforms.

• Global growth in travel spend: Travel as a whole continues to be a bright spot in the world economy, with the number of international travelers growing from 25 million in 1950 to 1.2 billion in 2016 and an anticipated 1.8 billion by 2030. Emerging markets – fueled by a rise in the middle class – will continue to grow in share from 30% in 1980 to 46% in 2016 to an anticipated 57% by 2030. This is equivalent to over 1 billion international tourist arrivals.

• Deep seated desire: Demand for experiential travel is driven by a desire for novel experiences and self-fulfillment. In a recent American Express survey, 88% of respondents said travel topped their bucket list, ahead of family and financial goals. A growing body of research directly links experiences to happiness above possession of material goods. This is increasingly appreciated by younger and older generations alike.

• Social inspiration: As more people share compelling travel experiences on social networks, it inspires other in their network to venture out and share theirs, stimulating further demand. Meanwhile, via social media, experience providers are empowered to share their experiences and values with anyone, anywhere – which has made them more accessible and interesting. With one click on a phone, you can have a window into the life of a culinary blogger in Vietnam and imagine yourself on a market tour.

• Digital curation: In many ways, experiences are emerging center stage as the currency of status in the 21st century. While sporting a luxury handbag may demonstrate affluence, a picture on Instagram while learning to make homemade pasta in Tuscany conveys affluence, free time, cultural knowledge, and self-improvement. In a world of information overload, many are constantly seeking to “edit” their digital footprints to showcase a thoughtful, meaningful life-- and experiential travel is a powerful way to achieve this.

• Enabling technology platforms: Success in today’s highly connected world relies on expertise in digital marketing, data driven insights, online payment processing, and mobile optimized distribution. While corporations historically had to build these capabilities internally, new technology platforms now deliver all these benefits seamlessly at a fraction of the cost – enabling travelers to find experience providers best suited to their unique needs.

Experiential travel is arguably the most powerful trend defining travel in the 21st century. The vast majority of the travel industry is already benefiting from the boom in experiential travel as it stimulates greater overall demand. While what qualifies as experiential differs from one traveler to another, there will be clear trends and winners as it continues to build momentum:

• Power to the people: Travelers will benefit most with an explosion of choice and transparency into the quality and value of various experiences. Travelers, accustomed to the ease of data democratizing apps like Zillow for real estate, will enjoy new digital tools that help them seamlessly discover and book the experiences that best meet their needs. Experiential travel also doesn’t need to be expensive or hedonic – there are many budget friendly, volunteer, and environmentally conscientious options.

• Resurgence of individual connections and artisanal offerings: Small and individual experience providers are entering a golden era with strong demand and easier access to marketing and distribution channels. Today’s travelers are seeking more than passive observation of a destination’s monuments and sights. They want to meet the winemaker, learn from the local farmer, and understand the inspiration of prominent artists through direct contact. More travelers are transitioning from watching on the sidelines to getting in the game.

• Quality wins: Today’s travelers have scarce amounts of free time and thus place a premium on making the most of it. Providers of quality experiences, who double down on their strengths, will receive disproportionate visibility and business. Those that are digital savvy will amplify these results by garnering attention and customer engagement.

• Intensifying competition at the destination level: As global travel spend increases, destinations will jockey for a growing pool of travelers and seek to define themselves in a more sophisticated and digitally savvy market. Those that highlight both the breadth and depth of local activities and attractions in the planning process will capture greater share of visits and spend.

• Product innovation: A need for new innovation will emerge as the first wave of experiences becomes commoditized. Countless operators are now offering group food or beverage tours. The next frontier will be a morning scouring the farmers market with a local celebrity chef. Leading experience providers will need to push the boundaries to develop new, creative experiences that can’t be found anywhere else and will continue to stimulate new demand.

• Volatility: Volatility will be a prominent feature driven by changes in consumer preferences, geopolitical forces, and environmental risks. Experience providers need to be prepared to weather the ups and downs of travel flows and take a long-term view in order to be successful. Investments made now should be for the long haul while retaining flexibility to accommodate abrupt changes to travel patterns.

The following 11 actions can help hospitality and travel industry leaders make the most of the significant growth in demand for experiences:

1. Embrace digital: Social networks, mobile payments, media formats, and distribution channels are advancing at an accelerating pace. Those that keep up with and lead the digital frontier in travel will earn disproportionate share of mind with travelers and stand out as a digitally savvy and traveler friendly brand.

2. Promote breadth and depth of local experiences: A travelers’ perception of a destination is largely colored by both the breadth and depth of experiences on offer within the destination. All industry participants have a role to play in promoting unique local experiences within the destination and benefit via increased spend and repeat visitation.

3. Double down on your strengths: Know what you are best at – be it delivering a perfect on site experience or bringing together stakeholders in a destination – and invest internal resources in making that world class. A local artisanal cheese maker, for example, will gain more from focusing on perfecting his or her recipe than learning the latest in mobile online payment processing.

4. Leverage partnerships for growth: Technology is moving too rapidly for anyone to stay on top of let alone build internally all aspects that may be beneficial for their business. Savvy companies and destinations are leveraging the investments and knowledge of specialist services to rapidly and significantly enhance their offering. These partnerships are often with cutting edge start-ups given the capabilities unlocked by new technology.

5. Put the media in social media: Experiences are best comprehended visually and through shared stories – both well suited for social media. Those that choose not to engage online through sharing media or starting discussions are missing the center of gravity for travel planning and lose the ability to influence downstream behavior and bookings.

6. Rethink your competitive set: Globalization and technology have redefined sources of competition. In many ways OTAs are more formidable challengers for traveler loyalty than hotel brands are with each other. With the increased ease of travel, destinations are now in competition at a global level for leisure travel. New Zealand, Alberta, Wyoming, Patagonia, and hundreds of other top notch destinations compete for a common pool of adventure enthusiasts. The bar is rising as are the benefits for being the best.

7. Play a larger role in the traveler journey: Those that take an expansive view of their role in the traveler journey will delight guests and grow their business. OTAs seek to become the trusted destination guide in every traveler’s pocket. Hoteliers who just view their role as providing a place to sleep should not be surprised to find their costs of distribution on rise and mindshare with guests on the decline. Those who reassert their role in connecting travelers to experiences in the destination – in a mobile ready form - will be rewarded for playing a larger role in the journey.

8. Deliver options and embrace personalization: What one traveler finds to be an exciting adventure may be boring to another. Similarly, standard recommendations or a static list of things to do won’t fully meet the unique needs of a multi-generational family, romantic couple, or high roller. Success comes from knowing the traveler with insights from thousands of interactions and providing personalized recommendations based on what they want, not what you or others think they want.

9. Benefit from data and customer research: Those who will win – whether a DMO, a tour operator, or a hotel – will be those who can use data to understand customer preferences to more effectively reach the right customer at the right time while using data driven insights to deliver exactly what they want.

10. Empower visitors for self-discovery: The current generation of travelers generally prefers not to be labeled a tourist, shunning brochure racks and other packaged offerings. Instead, they thrive on self-empowered online discovery and want to explore and discover a destination – not just see it. Help provide the tools to meet these needs.

11. Test and learn: The accelerating pace of change and intensifying levels of competition favor those that adopt a test and learn mindset. The only way to know the benefits of an initiative is to put it in place and measure the results.

The experience era presents incredible opportunity for participants in the travel sector and risks to those who don’t adapt. Over the next decade, entirely new types of experiences will move into the mainstream including activities currently considered off the beaten path, peer-to-peer offerings, and virtual reality. Forward thinking leaders can position their organizations for success by reimagining the role they play, seeking partners to stand out from the competition, and making the most of the surge in demand for experiential travel.

About PlacePass:

PlacePass.com is a travel and technology company driving innovation in the global tours and activities market. Headquartered in Boston, Massachusetts, PlacePass provides online access to the world’s largest collection of experiences for industry leading partners and digitally savvy travelers. From food tours to boat cruises to museum passes and more, PlacePass connects people to unique and quality activities in more than 180 destinations.

Visit us at PlacePass.com

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Ethan started his career with Ministries of Tourism and the private sector in Jamaica, Zambia, and Lebanon on e-commerce and distribution topics. Most recently, he spent 7 years as a leader in McKinsey & Company’s global travel and hospitality practice advising Fortune 500 executives on customer experience and growth strategy topics. He graduated from Cornell University (BS, MBA) with a degree in Hotel Administration and enjoys maple sugaring each spring with his family in Vermont.

Emily has more than 9 years of experience in marketing, sales and communications. She was most recently VP of the international sales team at The Foreign Policy Group, where she led the nation brand consulting practice. She began her career as a travel writer and food critic. Emily holds a BA from Harvard College and a Master’s degree from the Fletcher School at Tufts University. She is an avid sailor and enjoys hiking in New England with her husband John and dog Milo.