Designing and Delivering Memorable Experiences in the Luxury Hotel Sector

Abstract

There is general agreement within the literature that high customer satisfaction leads to profitable companies (Kotler, 1991) particularly for those that provide consistent quality in products and services. Over the last three decades managerial interest in hospitality and tourism has begun to centre on the link between customer satisfaction and the experiential elements of service consumption (Janiszewski, 2009) motivated, in the main, by the notion that providing unique guest experiences can add value to the consumption experience resulting in a series of positive outcomes such as customer loyalty, positive word of mouth communication and premium prices (Schulze 1992). Schulze' concept of " experience creation " was among the first major academic contributions to highlight the need for businesses to better understand and prepare for a fundamental change in future consumer behavior, a theme that was furthered by Pine and Gilmore's 1998 article and subsequent book published in 1999. Pine and Gilmore proffered that economical subtleties are established between experiences and services and that they should be seen as two distinct economic offerings, whereby " experiences " must be understood as a progression of 'economic value (J. Pine & Gilmore, 1998). In this way experiences are seen as a new form of economic value, that have the potential to delight the consumer, who in return is willing to pay a premium for the " experience " offering. Pine and Gilmore (1999) contend that a product that is customized is automatically turned into a service and a service that is customized is automatically turned into an experience. It is the level of customization that generates " memorable experiences " that customers are willing to return for (B. J. Pine & Gilmore, 1999, p. 2). This suggests that producers of experiences have to recognize and act on the correlations between customer expectations, actual customer experiences and economic value drivers that not only generate a return on investment but drive profits on existing products and services to new levels while at the same time ensuring that customers perceive the experience to have been value for money. The notion of added value is not new; it has been a central tenet in agriculture and resources for some time. Dairy producers, for example, are well aware that transforming milk into high end products such as yoghurt and cheese provides far better returns to the seller. Pine and Gilmore's innovation, therefore, is in customizing services to transform them into experiences and presenting or staging those experiences to create additional value for the customer. According to Lorentzen (2009), however, affluence is a key condition of the experience economy because 'the locus of development of the experience economy is determined by factors of affluence, lifestyle, leisure, and demography' (p.10).