The simple reason the experience economy is booming

This article was originally published in The Australian Financial Review by Lucy Dean.

In a world where more people have more money than ever, modern consumers are choosing to buy memories and social connection instead of yet more stuff.

If every Australian who tried to buy tickets to Taylor Swift’s Eras Tour stood in a queue, it would stretch from Brisbane to Perth and then another 400 kilometres into the Indian Ocean.

That’s a long way. But similar, albeit much shorter queues have also sprung up in recent years among fans wanting to buy tickets to Oasis, Coldplay, Kendrick Lamar and Lady Gaga. And with country-spanning lines comes the question: What would you do to jump to the front? What would you pay?

The wealthy and well connected have always used exclusive access to premium events, first-class cabins and champagne-drenched private boxes to signal their status.

But as more people have more money than ever before, it’s reaching a new level, according to high-end event and trip planners, economists, psychologists and the growing number of businesspeople coming up with creative ways to separate you from your money in return for a memorable experience.

At one end you have the Boomers and Gen Xers emboldened by property wealth, inheritance and the certainty of a healthy superannuation account. At the other there are younger people spending because they’ve given up on saving to buy a home.

Mix in a desire to “make memories” by sharing experiences, or connect with others in an increasingly online world, and you get the booming experience economy.

Against that backdrop, it’s possible to buy almost anything.

At its most basic, the experience economy can be a $52 cinema ticket with reclining seats and wine delivered at the halfway point. But it ramps up almost vertically from there across entertainment, sports, leisure, travel and adventure.

The most dedicated of those Taylor Swift fans could drop up to $1250 for A-Reserve seats and an array of merch. Ashes cricket fans who pay enough can emerge from the masses and be chaperoned onto the field by a former player during the tea break. Champagne lovers can spend $2500 a day to get inside the top French wineries.

Or, in an example of one of the latest trends, journey into the Upside Down.

“Brands are seeing the value of putting people in a world,” says Lucy Keeler, an artist and experience designer who has put together events such as Sydney’s Vivid festival and the Stranger Things and Squid Games immersive experiences at Sydney’s Luna Park.

“The most exciting thing about the experience economy is that we are seeing many different types of creatives, from all corners of the creative industries, working together – in some cases for the first time. There is no specific boundary for experiences. This is a new way to be entertained.”

How to bottle collective effervescence

If your life is generally going OK, it’s likely that the last time you screamed at the top of your lungs was either at a music concert or when your team scored the winning goal. And it probably felt great.

In 1912, French sociologist Émile Durkheim gave this feeling a name: collective effervescence. It relates to that heightened sense of oneness and awe when people come together.

But the joy we derive from experiences isn’t just in those heady peaks, says psychologist Tim Sharp, founder of The Happiness Institute.

“At checkout, buying ‘things’ triggers quick excitement and quick comparison. Buying experiences creates less buyer’s remorse because we don’t compare them as much,” he says.

“We anticipate experiences with more joy and patience; we wait for material items with more anxiety and impatience.”

And after having received the product or enjoyed the experience, we have different feelings too. “Experiences age well. They become stories and memories. Material goods fade into the background as we adapt to them,” Sharp says.

“Cultural capital now comes from ‘I did this’, not ‘I own this’. Curated experiences offer belonging in an increasingly lonely world.”

It’s against this backdrop that experience and tourism company Big Red Group values the Australian experience economy at $1.75 billion, and anticipates it will tip over $3 billion by 2030.

“People are coming out of a tougher time and discretionary spending is improving – people are choosing to spend on experiences again,” says Big Red Group chief executive David Anderson, noting that the company recently recorded its best Black Friday weekend.

“If we wind back 70 years to the postwar era, what made people happy was having a fridge, having a Holden in the front yard, having a TV.”

— Terry Rawnsley, KPMG economist

The amount that Australians spent on recreation grew 1.6 per cent in November, according to CommBank household spending data. That was mainly as people spent money on the Ashes cricket series, concerts by AC/DC, Oasis and Metallica, and the release of the film Wicked: For Good.

Economist Terry Rawnsley of KPMG analysed ABS spending data for 2013-14 and 2023-24. He says that while we’re spending less on discretionary items than we were 10 years ago, thanks to growing rent and mortgage expenses, experience-associated discretionary spending is slightly higher for all groups younger than 65.

There are a few things going on, he says. “COVID-19 made the fear of missing out a bit stronger in people,” Rawnsley says. “It’s also reflective of what’s making people happy. If we wind back 70 years to the postwar era, what made people happy was having a fridge, having a Holden in the front yard, having a TV.”

But each of those things were relatively more expensive than they are today. Around the turn of the century, globalisation delivered for most middle-class people more stuff at more affordable prices than ever. As many people would have experienced at Christmas, trying to find “things” your loved ones actually need is not easy.

“If people are looking to add something to their daily life, it’s now about, ‘Let’s go and have a nice meal. Let’s go and climb the Sydney Harbour Bridge’,” Rawnsley says.

This trend, he reckons, can be an economic multiplier.

Think about it this way: if someone had $5000 to spend on fun stuff, and they used it to pick up a flat-screen TV, a PlayStation 5, a couple of Labubus and maybe some clothes, there’s a good chance that most of that $5000 will be funnelled into businesses overseas.

“Whereas if I’m going down and doing an experience where I’m going into the bush, cooking locally sourced products and sleeping in a tent – all of that money is kind of captured by the Australian economy.”

The art, the science and the business machine

Adam Mortimer is the Designteam Head of Experience Design.

“The episodic memory comes alive when it’s driven by senses ... the episodic memory is absolutely geared to those moments that would probably be quite transformational.”

The experience economy is undergoing a revolution as organisers better understand the psychology of what’s driving interest in large-scale, communal experiences, and how to best deliver these moments, Mortimer says.

“There’s a festival in India called the Kumbh Mela, which has a combined 400 million people who attend,” he says. “The scale of these experiences, at a spiritual level, is really fascinating.

“We’ve reset the value chain around what experiences mean to us because we were deprived of them [during COVID].”

Meanwhile, technological advancements mean large events such as concerts are also more advanced, with synchronised light shows and even sound production tailored to each seat.

“Audiences want more from where they’re sitting. Brands want a lot more from the experiences they create – they want commercial outcomes, they want cultural belonging, they want content,” Mortimer says. “As an industry, we’ve got to be ready to deal with the hard news that a lot more is expected of the experiences we design because audience expectations have really shifted.”

John Hughes says that when he stepped into the chief executive role at Luna Park in 2022, he wanted to bring a balance between the best of the old and the new.

“We stumbled across the rise of immersive experiences and the experience economy. We found the younger audiences wanted to engage in these highly social, highly engaging experiences where they can be – in some respects – in the screen or in the world of the IP.”

The transition involved a $15 million redevelopment of the park’s Big Top into an immersive venue, he says, and Luna Park is now constantly on the hunt for stories it can fold into the venue.

“We started a process many years ago to figure out what was happening in this space globally … and essentially, we set about a strategy to try and bring in some of the higher value IP to Luna Park. It was bringing the Netflix team out here to show them what we were doing, which helped us get it over the line.

“As we move into the future, with the demand coming from Gen Z and Gen Alpha – they want these highly technical, highly immersive experiences. We’ll see a pretty seismic shift towards the experience economy from younger audiences.”

In November, Netflix opened Netflix House – a 9300-square-metre immersive centre in Philadelphia that allows visitors to step into the worlds of shows such as Wednesday and One Piece. The streaming giant hasn’t disclosed how much it’s spending on Netflix House, but describes it as a “significant investment in the local community”.

”This opening marks an exciting milestone for Netflix – we’re transforming how audiences experience our stories in real life,” Netflix chief marketing officer Marian Lee said in November. It opened another Netflix House in Dallas on December 11, and plans another for Las Vegas in 2027.

Lucy Keeler, who created the Stranger Things and Squid Games experiences at Luna Park before focusing on her roles as a board director at the National Art School and Artform board member at Create NSW, agrees. She says the growth of immersive experiences is a good thing for local creative industries.

Experiences have gone from being about “Look how amazing my lights are”, she says, to “How does this make you feel?”

The Stranger Things experience in Luna Park has employed about 100 creatives and technicians, and it’s about the same for the Squid Game experience, Keeler says.

“What I’m finding is that a lot of the creatives I’ve hired are funding their way through other really interesting, experimental projects on the side, through the work they’re doing on immersive experiences. So instead of diversifying your artists out of art … they’re actually working within the creative industries to further explore the creative industries.

“It’s been said that Netflix House is the Disneyland of Netflix. They’re relating those two as, ‘What is the future of amusement? What is the future of content consumption? What is the future of brand immersion?’ And it’s back into amusement, it’s back into escape, it’s taking you out of your world.”

Perhaps ironically, it comes as Netflix mounts its controversial bid to buy Warner Bros entertainment. Netflix is the world’s biggest streaming service, and while it pushes into the experience economy, it also has a tricky relationship with cinemas – arguably one of the largest and longest-running sectors of the experience economy.

“It’s not like we have this opposition to movies into theatres,” Netflix chief Ted Sarandos said. “My pushback has been mostly in the fact of the long exclusive windows, which we don’t really think are that consumer-friendly.”

It wants to own the whole experience.

The sparkly, pointy end

Over the phone, Kyla Kirkpatrick can be heard opening champagne boxes. She’s preparing for a busy weekend ahead. The chief executive of champagne wholesale and retail distributor Emperor Champagne and events business The Champagne Dame has a private tasting to host – one of many these days.

While champagne sales boomed over COVID-19, Kirkpatrick has noticed a significant swing away from product consumption into experience. “That’s where people are spending their money, and really being quite lavish about it,” she says.

For example, a five-night tour of Champagne with transfers, food, drink and château accommodation will set a single person back $12,550 before airfares.

“If I look back at what I was selling in 2019, 2020, a Champagne tour would have been about $7500 per head. People are happy to pay a higher ticket price for an elevated experience,” she says.

Kirkpatrick used to host two of these tours a year but will host at least four next year as demand surges.

“[People] want to feel. They want to have something that’s emotive,” she says. “People are happy to pay a really high price for that experience you normally can’t have.”

While the experience economy is largely fuelled by people’s desire to come together, in the ultra-high-end experience economy, the most valuable currency is exclusivity.

Wealthy travellers have higher expectations than ever, says Drew Kluska, managing director of luxury travel planning firm The Tailor. “People came out of the pandemic with a deeper appreciation for their time, and for the people they choose to spend it with. Travel is no longer just a break; it’s a chance to reconnect, recharge, and feel something again,” Kluska says.

“To be honest, I don’t think it’s about status at all, not for our clients. Many of them live in homes more impressive than most Australian luxury hotels. They can eat at Michelin-starred restaurants any night of the week. What they’re really looking for is access – privileged, behind-the-scenes moments they can’t find anywhere else.”

Consider this: for $65,000, the Four Seasons Sydney will fly you and four friends on a private jet to Uluru and back. The 12-hour day trip includes a scenic lunch and a guided tour with a local expert, and is the new frontier for five-star and beyond hotels.

“Embark on an opulent outback journey via private jet to the sacred land of Uluru,” the brochure reads. “A blend of cultural immersion and luxury awaits.”

Four Seasons internationally launched its Experiences by Four Seasons product in late 2022, and rolled out its Australian offerings in April 2024. That includes the Uluru trip, a luxe Blue Mountains bushwalk day trip ($7500) and an outback opal mine adventure ($28,000).

“[There is a] desire for our guests to have a one-stop shop, when they’re booking their luxury accommodation,” says Four Seasons Hotel Sydney senior marketing manager Erin Oliver. “They want to be able to book that, book their tours, book their dining experiences.

“People are still booking Four Seasons for Four Seasons, but maybe down the line, if we are the only ones in market offering these experiences, that definitely gives us a leg up.”

What to get the person who has everything

On April 14, this year, Amazon founder and sometimes-world’s-richest-man Jeff Bezos shot an all-female crew including pop star Katy Perry and his now-wife Lauren Sánchez Bezos into space.

The trip lasted 11 minutes, and while Blue Origin – Bezos’ aerospace company – stayed mum on how much the whole thing cost, the deposit alone for a Blue Origin seat is currently $US150,000 ($225,759).

It’s impossible to talk about the rise of the experience economy without talking about extreme wealth.

Bruce Keebaugh is the director of The Big Group, one of Australia’s largest catering and event management companies. The business, which he runs with his wife Chyka, has worked across banner events such as the Australian Open and the Melbourne Cup, but also has a glittering portfolio of private parties.

Think weddings and bat mitzvahs across Toorak, the Mornington Peninsula and also Saint-Tropez, the Amalfi Coast and even the Musée Rodin in Paris (for the wedding of chicken heiress and shoe designer Tamie Ingham and chef Guillaume Brahimi in 2023).

He’s been running The Big Group since 1990, but the appetite for high-end fun is “definitely supercharged” today.

“Work environments have never been more different. You’ve got this population of younger people … who are working from home two days a week, they’re going to pilates in the morning and starting work at 10, and they’re probably much lonelier in the way they work.”

Since 2001, the percentage of people who get together socially with friends or family at least once a week has fallen from 63.3 per cent to 50.4 per cent, according to research by senior research fellow at the Melbourne Institute Inga Lass.

Events, for this group of people, are an opportunity to get together and dress up, says Keebaugh. Their parents are having fun, too.

“The wealthier have never been wealthier than they are in Australia right now,” he says.

“The postwar migrants who came here – many as refugees – they created vast fortunes and shaped the way the country looks today. They are now of an ageing population, and their heirs are all the benefactors of that.

“[Their children] are people who are very globalised, and who aren’t afraid to spend money.”

But there’s another group of customer who isn’t necessarily ultra-wealthy, or the child of the ultra-wealthy, Keebaugh says.

“We’ve got a generation of customer – the younger guests – who will go, ‘I’m going to Saint-Tropez. I’m going to eat a ham and cheese sandwich every day because I’m going to Saint-Tropez’.”

Researchers from Northwestern and the University of Chicago in America recently studied the link between a household’s perceived probability of achieving home ownership and consumption patterns. And as perceived likelihood falls, households consume more relative to their wealth, reduce work effort and even take on riskier investments.

Worth noting is that this trend is more pronounced in lower-income groups, the researchers found.

Keebaugh thinks a similar trend is playing out here, but he also thinks it’s not necessarily so grim: some young people just don’t want to buy.

“The prestige items of the past aren’t necessarily those of the future. And it’s the same with housing. There are a lot of people who are prepared to rent rather than own, and so they’re using their disposable income on experiences. And if they’re wealthy, it’s just par for the course.”

Big Red Group has also reported a shift towards wellness, particularly among this younger cohort, with demand for wellness experiences up 34 per cent year-on-year over the winter period. Massage and day spas have been a Red Group mainstay for years, but breath work, yoga and spirituality-focused experiences are gaining in popularity.

“Our kids drink far less than we ever used to … they invest in health, they’re very focused on what they eat,” says Red Balloon and Big Red Group co-founder Naomi Simson. “Social media has changed people’s insights into what is healthy for them.”

Dynamic pricing and the economics of access

If you stare into the Ticketek virtual queue long enough, eventually it will stare back. Or something like that.

Anyone who has tried to buy tickets to a major event in the past couple of years has experienced the highs of securing tickets and the lows of sharing a virtual waiting room with one million others, only to end up spending hundreds (if not thousands) on tickets because all the cheaper ones sold out, if they get to the end of the queue at all.

Dynamic pricing is one of the more annoying phenomena to accompany the rise of the experience economy. It’s the practice of varying the price of a service or product to match the demand and is used extensively across ticketed events with high demand. Prime Minister Anthony Albanese said he would ban dynamic pricing in October last year, after Green Day tickets jumped to $500.

Ticketek and Ticketmaster say demand-driven pricing exists to fend off scalpers. Airlines also use dynamic pricing, but this isn’t necessarily the same thing as a concert ticket though, says Rawnsley.

“The thing about aeroplanes is that people up in first class pay an extreme premium for the privilege, but they kind of cross-subsidise the cheap seats down the back.

“In some ways, if you have dynamic pricing, and you can work out what everyone wants to pay in the niche you’re trying to fill, you can have lower-income people being brought along too.”

But if it’s a one-night-only concert, it’s a bit different. “People will miss out because there’s a lack of space, and that’s less to do with what people are prepared to pay – it’s just the supply and demand economics coming through.”

Uncomfortable also is the fact that as our devices learn more and more about us, the companies we’re purchasing from will too. With the help of AI, they can price accordingly. This is called surveillance or personalised pricing. If the algorithm decides you’re more likely to pay, you’re given a higher price. Suddenly, the problem of dynamic pricing seems quite quaint.

A five-year inquiry by the Australian Competition and Consumer Commission published in June 2025 warned about pricing and algorithmic transparency. It said: “Current laws are insufficient and regulatory reform is urgently needed.”

But that’s another story. Because as Glen Turner, the head of health and wellbeing at Parkrun Asia Pacific reminds us, not all experiences have to cost money.

Every Saturday morning, up to 1.3 million Australians lace up their runners and head out for a 5-kilometre walk or run.

Parkrun’s slogan is “free, for everyone, forever”.

It’s no coincidence to Turner that this has occurred at the same time as the loneliness crisis dominates one national discussion, and the dangers of too much time on social media another.

“There’s a cliché, which is that Parkrun is the new church for people. I come from a small town that was centred around the cricket club, footy club, fishing club, tennis club or bowls club. And everybody is involved, whether you’re making sandwiches or doing scoreboards, officiating or volunteering,” says Turner.

“Where Parkrun fits the void for people is that it’s the same: everybody is welcome and everyone can be involved.”

As business big and small sees dollar signs in bringing people together for shared or exclusive moments, he says the opportunity to be together for free remains important.

“We lead busy and chaotic lives, and you can’t always put time in your schedule for yourself. But knowing that there’s something in your local community at 7, 8 or 9am every Saturday that you can be involved in however you want to – it’s really important for people’s health and their social connections.”

World Experience Organisation’s Mortimer says we are still living in the shadow of COVID-19. And he agrees that there is a tension between exclusivity and the drive for a collective experience. But the experience economy has to stay focused on giving people connection.

“You’re not going to get around that [friction]. But I think we can tap in and out of both,” he says.

“It’s not just about going to the Melbourne Cup or the Australian Open. There are layers of experiences [like concerts and art] that are actually about healing, and about togetherness, and about making a better society.”

Adds psychologist Sharp: “Small experiences matter most. Daily micro-moments with others, like a chat, a walk, a shared laugh, have a bigger long-term impact than expensive, occasional experiences.

“Experiences only boost wellbeing when they offer connection, novelty, or personal meaning. Price matters far less than intentionality.”