Why luxury shoppers are opting for high-end experiences over goods

Hospitality experts define ‘escapism’ as an intense experience that allows individuals to temporarily leave their daily life behind in a pleasurable way.

“During Covid, people were stuck at home and we saw a lot of impulse buying of luxury items as a way to cope with that stress,” Shin says. 

“But post-Covid, we’ve seen more interest in unique experiences, including same-day hotel and flight bookings, by people wanting to escape that mundane daily routine.”

To better understand the difference in the impact of luxury goods versus experiences, Shin and her colleagues surveyed dozens of consumers in the US and Hong Kong on their recent purchases. 

While impulse purchases of goods such as perfumes and sunglasses provided some elevated sense of self, they found purchases of experiences, such as hotel stays and fine dining, brought higher levels of perceived escapism and positive emotions. And the higher the price, the higher the escapism.

Exclusivity must be maintained through higher prices

“The perception of escapism is greater the more someone pays for the experience,” Shin explains. “But exclusivity must be maintained through higher prices, or more people are going to buy into it and dilute the escapism of it. If it’s not special and unique, then it won’t have the same effect.”

Shin adds that while material goods are tangible and physically owned for some time, experiences are intangible and owned as long-lasting memories.

“Because experiences are more personal, more unique to your self-concept, people are relating to them more than ever before,” she observes. “And people who make these unplanned luxury purchases exhibit more positive emotions as they deviate from daily regulations and pressures, if only for a little while.”

The need to ‘escape’ was a major driver in the travel and tourism industry’s post-Covid recovery. According to the World Travel & Tourism Council, in 2021, 75% of hotel stays were booked three days or less in advance, and 48% were same-day bookings. 

Domestic destinations were first to bounce back. But as borders began to reopen, international spending increased. As that trend towards experiences over goods continues, Shin sees a huge opportunity for marketers of luxury hospitality.

“This doesn’t just impact the consumers, it impacts those providing the experiences as well,” Shin says. “Marketers may find shifting their focus to these exclusive ‘escapes’ can increase profits and bring people closer to their brands.”

You can read more about the study, entitled Unplanned Purchases of Luxury Goods and Experiences, here.