71 Tourism Innovation in the Experience Economy

During my primary and secondary school years, most of my peers seemed to have a clear idea of their future careers and academic paths. Meanwhile, I was still exploring, knowing only that I loved travelling. This passion for discovering new places and the memorable experiences travel offers is what sparked my interest in tourism. It also motivated my decision to leave my hometown, a small city in Norway, to pursue higher education down under in Australia.

My research covers many aspects of tourism, including tourism policies, tourism and destination innovation, regional development, and marketing-related disciplines, such as consumer behaviour and marketing communication. It also focuses on business perspectives, especially micro and small enterprises. Additionally, I became increasingly interested in the Experience Economy, a concept introduced by Pine and Gilmore (1998), when I first took on a lecturer and course coordinator role, teaching the course Experience Economy at a university in Norway. Understanding tourist behaviour, why people travel, what experiences they seek, and the roles of experience providers, other stakeholders such as the government, as well as the tourists themselves, are crucial pieces of knowledge. This interest also led to the edited volume on ‘Tourism and the Experience Economy in the Digital Era: Behaviours and Platforms’ (Mei, 2023), where I served as the editor.

The Experience Journey and Innovation with Government Facilitation

Essentially, the shift towards emphasising the Experience Economy marks a crucial turning point in the development of tourism. The simple act of visiting a new place has been fundamentally changed, driven by a revolution in expectations. Based on my own research interests and contributions, this change is fuelled by the rise of the experienced economy as a cultural paradigm, with the tourism industry as its main arena, the relentless pursuit of tourism and destination innovation, and the vital yet often overlooked role of governments as enablers. These elements are deeply interconnected, continuously influencing and being influenced by each other in a mutually beneficial cycle. While experiences have existed since the dawn of humanity, it is the packaging of these experiences into an ‘economy’ that initiated this shift. The change begins with a fundamental shift in what we value as consumers. Over time, we have moved through economic eras characterised by extracting commodities, manufacturing goods, and delivering services (Pine & Gilmore, 1998). Today, we are firmly in the era of the experience economy. In this paradigm, value is no longer solely linked to tangible goods or efficiency but is rooted in meaningful, personal, and transformative experiences (Mei, Hågensen, & Kristiansen, 2020). The core of the experience economy lies in the desire for engagements that resonate emotionally, intellectually, and sensorially. People no longer wish to merely consume, as they want to participate and be part of a story unfolding around them (Koll, 2015). The success of a product or service is now judged not only at the point of sale but by the lasting memories and impact it leaves, thereby redefining the very purpose of travel and tourism.

Tourism, as an experience industry, is naturally a key player in the experience economy, where businesses aim to craft memorable and transformative experiences that engage customers emotionally, intellectually, and physically (Mei, 2023; Pine & Gilmore, 2011). The shift from traditional service delivery to experience-focused offerings has prompted tourism operators to innovate and adapt to changing consumer demands. The experience economy in tourism involves more than just providing enjoyment for tourists. It aims to foster deeper connections between visitors and destinations, enriching the cultural, social, and economic value of tourism activities (Campos, Mendes, Valle, & Scott, 2018; Mei, 2014, 2019). As a sector, tourism is uniquely positioned to embody the principles of the experience economy. A holiday has always been a means of escaping the ordinary, but the motivation behind travel has changed dramatically. Where tourists once sought to see iconic landmarks and collect sights like postcards, they now aim to collect feelings, skills, and stories. The modern traveller does not just want to see the northern lights. They want to feel the magic of it and experience the fascinating, natural occurrence that inspires wonder, taste the local food at the destination, and understand its history and cultural significance through the eyes of a passionate guide. They travel not merely for new scenery but for personal transformation (Sheldon, 2020). This increased demand, driven by the experience economy, has placed significant pressure on traditional tourism products. Destinations can no longer rely solely on natural beauty or historical importance, as a scenic beach or ancient ruin is now viewed as a basic commodity, with the experience surrounding it constituting the ‘true’ product.

This pressure to meet new expectations has become the driving force behind tourism and destination innovation. Tourists are increasingly seeking genuine and personalised experiences, and destinations must highlight their unique cultural and environmental assets. Innovation is the strategic response to this demand, creating new and immersive opportunities for engagement (Breiby & Mei, 2023; Mei, Arcodia, & Ruhanen, 2015). This innovation can take many forms. For example, tourism providers can incorporate local traditions, heritage, and community engagement into their offerings to create experiences that resonate deeply with visitors (Mei, 2023; Mei et al., 2020). The tourism industry consists of many micro and small businesses that can produce such unique and personalised products, services and experiences, which differentiate them from larger establishments (Mei, 2022b; Thomas, Shaw, & Page, 2011). This could involve offering cooking classes as part of a farm-based experience, along with storytelling about the history of the farm and family heritage or providing unique and personalised experiences in unique destinations such as the Arctic Circle (Mei, 2022a). However, over-commercialisation or the commodification of culture can weaken authenticity, potentially alienating both tourists and local communities. It is evident in marketing communication campaigns that they are not just selling a destination but the promise of rejuvenation, adventure, or personal growth.

Moreover, innovation in the tourism industry does not happen in isolation. It requires a stable foundation, supportive infrastructure, and a shared vision. This is where governments play a vital role, not as creators of experience, but as facilitators of success (Mei et al., 2015). Governments provide the platform on which the private sector and communities can thrive. Their contributions range from building and maintaining critical infrastructure, such as airports, public transportation, proper roads, and digital networks, to crafting policies that balance investment opportunities with the protection of cultural heritage and natural resources (Mei, Arcodia, & Ruhanen, 2013). Governments often lead strategic marketing efforts through tourism boards, promoting cohesive narratives that individual businesses cannot achieve alone. Forward-thinking governments foster collaboration among various tourism operators, such as hotels, tour operators, and experience providers, to create a diverse tourism ecosystem. By acting as facilitators, governments create the conditions for innovation and sustainability, ensuring long-term benefits for local communities and businesses (Mei et al., 2015; Mei, Lerfald, & Bråtå, 2017). The interaction between the experience economy, tourism, innovation, and government forms a virtuous cycle. For instance, the experience economy raises traveller expectations, prompting the tourism industry to adapt and innovate. This innovation creates offerings that meet the demand for memorable experiences, while governments provide the structure and support needed to ensure these innovations are sustainable and inclusive. Governments themselves are also evolving, introducing policies that address pressing global challenges such as climate change and overtourism, further enriching the system. This interconnected cycle not only sustains the current model but actively transforms it over time. In addition, it is important to consider consumers, tourists, in this process, as unique experiences are co-created with them (Mei, 2020). Tourism enterprises alone cannot dictate how and what tourists experience on their holiday. They can stage, facilitate, and lay some foundations for specific experiences to occur (Mei et al., 2020), but only they understand their customers.

Tourist Expectations through Co-Creation and Diversity Needs

As tourists increasingly seek experiences that are both enriching and transformative, the tourism industry must respond by adopting co-creative approaches and embedding creativity, authenticity, and sustainability into its core practices (Andrades & Dimache, 2014). Unlike passive consumption models, the experience economy enables tourists to actively shape their own experiences. For instance, instead of simply visiting a destination, tourists might engage in immersive activities such as cooking classes, storytelling sessions led by locals, and cultural and educational workshops (Mei et al., 2020). These participatory methods not only enhance the value of the experience but also foster a sense of personal ownership for the traveller, making the experience more meaningful and memorable. Furthermore, the varied needs and preferences of different types of tourists mean that the experience economy is not a one-size-fits-all approach. Tourists’ expectations are influenced by factors like age, cultural background, and personal interests. For example, older tourists may have markedly different expectations compared to younger travellers. While younger tourists often seek adventure and technology-led experiences, older tourists may prefer personal contact and face-to-face interactions over new technologies, such as mobile apps or self-service kiosks (Hole, Mei, Engh, & Engen, 2023). This suggests that offering options such as personal assistance, guided tours, or culturally immersive activities may be more appealing to this demographic. As a result, tourism businesses must adopt a flexible approach that balances innovation with inclusivity, ensuring experiences meet the diverse needs of tourists. Creativity and innovation are essential for developing experiences that stand out in a competitive global market. Successful tourism operators can also harness technology and storytelling to enrich their offerings (Mei, 2023). For example, technologies such as Augmented Reality (AR) and Virtual Reality (VR) can transform traditional sightseeing into immersive, multisensory experiences (Gössling & Mei, 2025; Mei, 2023; Mei & Slettli, 2022). They can also provide immersive previews of experiences, enticing travellers to visit physical locations. Consequently, these innovations have the power to bring historical or natural sites to life, allowing tourists to interact with destinations in new and exciting ways. Ultimately, these technologies present new opportunities for personalisation, allowing destinations and tourism operators to co-create with tourists to craft experiences that are uniquely tailored to individual preferences and values.

External Catalysts

The impacts of technology and the much-discussed Artificial Intelligence (AI) tools should not be overlooked (Gössling & Mei, 2025; Mei, 2023). Since they influence tourist behaviour, they also undoubtedly alter experiences, ranging from pre-travel to during-travel and post-travel stages. This shift requires not only innovative business models but also a commitment to collaboration with local communities and stakeholders to ensure long-term success (Breiby & Mei, 2023). Socio-cultural trends also play a significant role in shaping the landscape of tourism. The global push for sustainability has influenced travellers to seek responsible tourism options that minimise environmental impacts and support local communities. As discussed, the integration of sustainability within the framework of the experience economy is essential. While creating unique and memorable experiences is central to the experience economy, tourism providers must also balance these goals with environmental and cultural preservation (Breiby & Mei, 2023). Sustainable practices include reducing waste and supporting local economies, as well as balancing the needs of locals and tourists, as parts of social innovation and sustainability (Wistveen, Breiby, & Mei, 2024), are vital to ensuring that tourism experiences remain valuable and viable in the long term. Global challenges, such as climate change and overtourism, further emphasise the need for collaboration and innovation within the tourism sector. These pressures demand proactive governance and creative solutions to manage visitor flows, protect natural and cultural assets, and ensure the long-term viability of destinations. Governments, in particular, play a critical role in addressing these challenges by implementing policies that promote sustainable tourism practices (Mei et al., 2015).

The interaction between the experience economy, innovation, and government drives the tourism industry, while technological progress will continue to influence its development. However, it is also important to consider the diverse range of consumers and their changing needs and behaviours, as discussed, and how technology significantly affects smaller operators, such as micro and small tourism and hospitality businesses (Gössling & Mei, 2025). Recognising diversity, encouraging collaboration among different actors, both private and public, and prioritising innovation and authenticity are crucial for creating meaningful and memorable experiences through social sustainability, as well as supporting economic growth and environmental initiatives. This approach promotes deeper connections between people, cultures, and destinations, moving towards a sustainable future for all and further emphasising the vital role of the tourism industry.

Contributed by Xiang Ying Mei, University of Inland Norway
Read Xiang’s letter to future generations of tourism researchers

References

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