Consumer Blog: Experience Economy

It seems consumers are more inclined to spend their money on doing rather than purchasing these days. The UK leisure market is growing nearly twice as fast as the retail sector, with consumers craving experience-led activities.

Whilst traditionally young adults placed value in buying a car or a house, today they are opting to spend their money on a broad repertoire of leisure activities. Of course, the chance to tell the world about their experiences via social media is one of the main drivers behind the growth; we live in a world where something is only as good as the number of likes on Facebook and Instagram. The older generation are too spending more time and money on leisure activities.

It appears that the market growth is also linked to happiness. Booking an experience, whether a holiday, gig or thrill seeking activity, provides excitement and something to look forward to, making consumers happier for a longer period of time when compared to buying material things.

Experience-led companies are seeing strong growth-rates and are becoming increasingly attractive targets. Just last month we saw the acquisition of Virgin Experience Days by Inflexion Private Equity. Virgin Experience Days offers curated experiences to consumers and corporates, selling over 750,000 annually, and has seen revenue double in the last three years driven by this shift in consumer spending.

US-based Live Nation Entertainment, owner of Ticketmaster, one of the largest ticketing businesses in the world, has made 13 acquisitions in the last two years, including Ticketpro, a leading ticket agent in the Czech Republic. Mergermarket claims the entertainment group is also interested in buying Australian ticketing and entertainment company, TEG; further evidence of intent to add additional experience-led businesses to its portfolio.

There are options for corporates to make acquisitions to drive both global coverage and to diversify into additional activities. Private equity continue to seek opportunities to invest in this high growth sector. While millennials are busy becoming ‘Instafamous’ sharing their experiences, we expect to see this trend to continue.