Right Now is a Great Time to Invest in Physical Experiences

I work in the experience economy. I’ve been creating unique digital engagements, usually in physical spaces, for more than 20 years. Much of that work has been at events and in corporate spaces like customer experience centers. But some of the most exciting are venues where consumers are willing to pay for entertainment. That’s the experience economy, and it includes everything from museums to theme parks to escape rooms.

One thing this disparate mix of themed entertainment venues has in common is that the current pandemic required them all to shut down. And most have not yet been able to re-open, nor do they have much clarity on when they will be able to do so. It’s definitely a difficult time for established venues. They have large structural expenses like rent and payroll that are difficult to reduce, but their revenue model is temporarily broken.

So, it’s understandable to view the experience economy with some trepidation and fear. But set the fear aside for a moment and you see a once-in-a-lifetime opportunity for innovators, upstarts and even established players with strong finances. Once we get past the difficult moment that we’re currently all in, we should see an experiential market with both increased demand and decreased competition. That sounds to me like a dream scenario for entrepreneurs and visionaries.

Cast your mind back to before the world was turned upside down in March. The experience economy was roaring, and much ink was spilled about how the future of entertainment was all about experience. Most of the reasons for those analyses have not changed. The broad societal trends causing people to value things less and experiences more have not been interrupted by the pandemic. If anything, they’ve been accentuated.

We’ve all become even more keenly aware lately just how much we crave human interactions and physical experiences. You just have look at bars and beaches today to see how irrepressible these urges are – even in the face of clear health risks we are all exhibiting significant lockdown fatigue. Eventually it will be safe to partake in the experience economy again. Why wouldn’t demand for exciting in-person experiences come surging back? I’d argue that we’ll see a wave of pent-up demand. More people will want to participate in fun, engaging and meaningful experiences than ever before.

For sure there has been a lot of pain across the entire economy over the past several months. And unfortunately, it looks as though it may get worse before it gets better – there’s a good chance that many businesses across a variety of industries will not survive. And the experience economy will surely not be spared from such hardships.

For those companies forced to fold it’s a tragic outcome. But it’s also be an opportunity for their competitors, and for would-be competitors entering the industry. innovators will surely emerge to meet the renewed demand, and to create different types of experiences than we had before. Those businesses will be able to command a larger share of the market than might have been possible before the pandemic.

There’s still plenty of uncertainty about when things might return to normal, so some would argue for a wait-and-see approach. But that’s just fear talking again. It’s the bold who will be rewarded when the economy recovers, not the fearful.

It takes a long time to plan and build a new physical experience, and to implement the technologies that should enable it. By the time it’s obvious that the coast is clear it will likely be too late. Starting a project then will have you missing the best window of opportunity. Others who were more far-sighted will likely beat you to market.

Those who plan ahead will have other benefits too. Commercial landlords are also suffering through the pandemic so potential tenants have unprecedented leverage right now. Venues that are ready to open as soon as the situation allows will have first pick among talented and experienced workers looking for a new opportunity. For those with access to capital, its cost is at historic lows.

Sure, there’s always some kind of risk in entrepreneurship – but that’s why entrepreneurs are rewarded in the market. Let’s get together for lunch in a couple of years and evaluate who’s innovating in the experience economy. I’ll get the check if most were not born in the depths of the worst economic crisis in a century. You know, right now.