Technology Impact on the Experience Economy


Each wave of economic development so far has been characterised by a particular feature. For instance, the agrarian economy relies on farming, whereas the service economy thrives on services rather than manufactured products. The term “experience economy” was first used in 1999 to describe the emerging step in economic development (Pine & Gilmore 2013). In an experience economy, customer experiences become the main driving force behind purchasing decisions and thus influence the growth of the business. As explained by Frias (2014), customers are no longer satisfied by products and services only; they want to have an excellent experience throughout the process of selecting, buying and using a product or service. The implication of this wave of development for businesses is that they have to develop and offer new, exciting features to distinguish their products or services from the ones provided by competitors.

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The development of technology is also a significant trend that affects the growth of businesses all over the globe. New technologies can help businesses to improve efficiency and to provide services that satisfy the customers’ evolving needs. In the age of experience economy, technologies can also offer ways of delivering experiences to customers. However, there are also many concerns among businesses about the technology backlash, which was triggered by people’s negative experiences with some technologies. The present paper will attempt to review the impact of technology on the development of the experience economy, as well as comment on the role of technology backlash in the use of technology.

Operations and Technology

First of all, operational technologies can be used by businesses to improve specific processes or make them automatic, thus reducing costs and improving profitability. In tourism and hospitality, technology is used to enhance a variety of processes, including customer service, security, marketing, and market research. For instance, hotels widely use technology to improve information security (Law, Buhalis & Cobanoglu 2014). Online technologies are also important in tourism and events management, as they enable guests to make bookings online, check-in for their flights in advance, and access customer services quickly when needed. Internal processes can also be enhanced using technologies. For example, as facial recognition is growing in popularity, it may find application in events management, allowing for improved security and smoother check-in of guests.

Another essential trend in tourism that became possible due to the advancements in technology is smart tourism. According to Gretzel et al. (2015), smart tourism includes the use of applications to enhance tourists’ experiences. As part of smart tourism initiatives, hotels can build apps that provide personalised recommendations regarding locations to visit, dining, and recreational activities based on the user’s profile and available data. Besides, these apps can be used for contacting customer services and submitting requests without contacting the hotel’s reception. The use of smart technologies in tourism thus allows enhancing customer experiences while at the same time improving the hotel’s operations, thus contributing to the development of the experience economy.

Delivery of Experiences

Technology can also be used to improve the delivery of experiences to customers. As noted by Neuhofer, Buhalis, and Ladkin (2014), customer experiences can be enhanced using virtual reality or technology mediation. Further development of virtual reality, for instance, can open an entirely new market niche in tourism and events management by allowing companies to bring experiences to customers from other locations. Using virtual reality devices, customers can participate in various events or visit locations without leaving their home. Further development of virtual reality technology would make it possible to convey a sense of place, thus enabling customers to have a full experience of visiting a particular event or destination. Therefore, virtual reality is a promising technology that will most likely facilitate the growth of the experience economy.

Another way to improve the delivery of experiences to customers is by using technology to tailor experiences to the needs of individuals. The development of technology has facilitated the exchange of information, allowing companies to gather data about users’ preferences and interests. This data can be used to personalise services, thus delivering experiences directly to customers before they make a request. Therefore, using technology, companies can improve customer satisfaction and earn more profits, thus also supporting the experience economy.

Technology Backlash

Technology backlash is a growing concern for businesses that rely on the use of technology to improve customer experience. Technology backlash is largely focused on the worries of users regarding the development of technology in the future, as well as its misuse today (Sutcliffe & von Kameke 2018). For example, many people have concerns about the privacy and security of information, especially in the light of recent data leaks from Facebook and other large companies. Others also worry that technologies will replace real-life communication and experiences. The technology backlash could have an adverse effect on the use of technology, especially if it forces people to limit the use of particular technology or oppose new developments in the tech industry. This can happen if users’ concerns are not addressed by businesses that are actively using technology to deliver services.

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Nevertheless, it is also important to note that the share of people who embrace technology and use it on a regular basis despite having some concerns is still prevalent. Very few people refrain from using devices or the Internet, which means that there is an opportunity to reverse technology backlash. In order to do that, it is crucial to work on the aspects of technology that cause it. For instance, improving information security and promoting a safe online environment could help in addressing technology backlash and encourage trust in new technologies. By using an appropriate strategy to address the users’ concerns, companies can improve their reputation and facilitate the use of technology, reversing the backlash.


Today, many businesses, especially in the field of tourism and events management, operate in an experience economy. Whereas in the previous steps of economic development, customers’ buying behaviour rested mainly on their needs for products and services, today, customers make purchases based on the experiences they provide. Therefore, companies should seek to enhance customer experiences and find new ways of delivering them. Technology can help companies to generate more profits by improving operations and customer experiences, thus contributing to the growth of the experience economy. Future development of technology could also provide new ways of delivering experiences, such as virtual reality technologies. Nevertheless, the technology backlash that is evident in today’s society could affect the use of technology and halt the development of the experience economy. To prevent this effect, it is critical for companies to address the users’ concerns and to offer secure and reliable technologies that enhance customers’ experiences.

Reference List

Frias, A 2014, ‘Marketing in the “total experience” economy’, Forbes, Web.

Gretzel, U, Sigala, M, Xiang, Z & Koo, C 2015, ‘Smart tourism: foundations and developments’, Electronic Markets, vol. 25, no. 3, pp. 179-188.

Law, R, Buhalis, D & Cobanoglu, C 2014, ‘Progress on information and communication technologies in hospitality and tourism’, International Journal of Contemporary Hospitality Management, vol. 26, no. 5, pp. 727-750.

Neuhofer, B, Buhalis, D & Ladkin, A 2014, ‘A typology of technology‐enhanced tourism experiences’, International Journal of Tourism Research, vol. 16, no. 4, pp. 340-350.

Pine, BJ & Gilmore, GH 2013, ‘The experience economy: past, present and future’, in J Sundbo & F Sørensen (eds), Handbook on the experience economy, Edward Elgar Publishing, Cheltenham, pp. 21-44.

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Sutcliffe, H & von Kameke, C 2018, ‘Why we need to embrace the tech backlash’, World Economic Forum, Web.

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