Microsoft Word 2007 ichrie conference Proceedings Final-Final 06-06-07. doc

 
INTRODUCTION 
The hospitality business has always been an industry in which the consumer’s experience is at the core. A 
consumer’s experience has been around in many types of businesses but until now, this concept has gone largely 
unrecognized. Pine and Gilmore (1999) introduced the concept of “experience economy” via 
The Harvard Business 
Review
, and the concept later expanded into 
The Experience Economy: Work is Theatre & Every Business a Stage
. 
Pine and Gilmore (1999:11) explained that “experiences occur whenever a company intentionally uses 
services as the stage and goods as props to engage an individual in an inherently personal way.” Pine and Gilmore 
(1999) differentiated the service business from the experience business. According to them, when a customer buys a 
service, he or she purchases a set of intangible activities customized for individual consumers. But when the 
consumer buys an experience, he or she pays to spend time enjoying a series of memorable events that a business 
stages to engage him or her in a personal way (Pine and Gilmore, 1999). 
In the new millennium, the focus has started to shift from a service- to an experience- economy. Because of 
today’s advanced technology, consumers’ increasing expectations, and increasing competition, however, services 
today are starting to look like commodities (Knutson and Beck, 2006). That is, offering quality products and service 
are expected in today’s competitive world. They no longer suffice to establish a competitive advantage. Businesses 
need to move beyond goods and services to create memorable experiences for each guest, since each guest’s 
experience is unique and individualized (Gilmore and Pine, 1997). Thus, Pine and Gilmore have argued that, in an 

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