What is the "experience economy"?

The experience economy refers to a market where consumers prefer spending money on experiences (like travel, concerts, or events) rather than physical possessions. It's driven by a growing trend, especially among younger generations, to value memorable moments and shareable experiences over material goods. Companies in this sector provide services that create these experiences or facilitate access to them.

Why are cruise lines included in this investment theme?

Cruise lines are quintessential experience-based businesses. They sell all-inclusive vacation experiences rather than physical products. They provide temporary access to luxury accommodations, entertainment, dining, and destinations—all packaged as a memorable journey. As consumers increasingly value experiences over possessions, cruise companies like Carnival (CCL), Royal Caribbean (RCL), and Norwegian (NCLH) directly benefit from this spending shift.

What is "revenge travel" and how does it affect these stocks?

"Revenge travel" refers to the surge in travel and tourism spending that followed the lifting of pandemic restrictions. After years of limited mobility and canceled events, consumers are "taking revenge" by splurging on trips, cruises, concerts, and other experiences they missed. This phenomenon has created strong demand for companies in this collection, helping to drive revenue growth as people prioritize making up for lost time with memorable experiences.

How might economic downturns affect these experience-based companies?

Experience-based companies typically sell discretionary services (non-essential purchases), making them more vulnerable during economic downturns when consumers cut back on non-essential spending. Travel, entertainment, and leisure activities are often among the first expenses reduced during tough times. However, the strength of the underlying trend toward experiential spending has shown resilience, with many consumers maintaining some experience spending even when budgets tighten, choosing to cut back in other areas instead.

What's the difference between ticketing companies like EB and event producers like LYV?

Ticketing companies (like Eventbrite/EB) primarily provide the technology platform that enables event creators to sell tickets and manage their events. They make money through fees on each ticket sold but don't typically own or produce the events themselves. Event producers (like Live Nation/LYV), on the other hand, actually create, promote, and manage live events such as concerts and festivals. Live Nation is unique in that it combines both roles—it produces events and owns Ticketmaster, a major ticketing platform, allowing it to capture value at multiple points in the live entertainment chain.

16 handpicked stocks

Ephemeral Experiences

Invest in companies creating lasting memories through fleeting moments. These carefully selected stocks represent leaders in the experience economy, from sold-out concerts to dream vacations. As consumers increasingly value doing over owning, these companies are positioned to capture this powerful spending shift.

Han Tan | Market Analyst

Updated 2 days ago | Published at juin 17