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Experiences vs. Things

• During the pandemic, consumers’ demand for “experiences” declined dramatically due to restrictions in movement

• As pandemic restrictions ease, this demand is returning as life in many ways returns to a degree of normality

• Over the past decade or so, experiential spending has outpaced global GDP growth, and we expect that trend to continue


A recent headline from Nation’s Restaurant News caught the eye: “Restaurants share of food dollar grows to record 54.9% in April”1. With the harshest restrictions from COVID-19 perhaps behind us, people are getting back “out there” and starting to enjoy pursuits that during the pandemic were largely unavailable, which we’ll call “experiences”. This could have a significant impact on the way consumers spend going forward.

In the May 2020 issue of the Journal of Experimental Social Psychology, researchers from the University of Texas-Austin business school published a study with over 5,000 participants and concluded that people were generally happier after spending on experiences such as sporting events, concerts, travel, and dining out over purchases of “things”, or material possessions.2

As pandemic restrictions ease around the world, and consumers start to spend the savings that built up during the pandemic, we believe a long-term trend toward “experiences” vs. “things” will continue.

One of the primary experiences for all of us is travel, and with summer upon us, many families will be planning vacations. During the pandemic travel related spending plummeted, but this summer we expect people to get back on the road. The following chart illustrates how global travel spend has grown dramatically faster than global GDP between 2011 and 2019.

20220607-chartGlobally, travel spend outpaced GDP by 1.3% per year during the period. Obviously the pandemic put a damper on that in 2020 but we’re seeing evidence that travel is coming back in a big way.

A recent survey conducted by Vacasa showed almost 2/3 of Americans will travel this summer and 85% of those expect to vacation more this year than last.3

Airline bookings are up significantly and Google search data shows that searches for keywords such as passports, beaches, and vacation rentals are up significantly even compared to pre-pandemic levels.4

Even as consumers face high inflation and gas prices, the urge to experience life has returned and we expect that the long-term trend of consumer spending will continue to emphasize these experiences vs. material possessions. For investors, companies that benefit from this shift in consumer spending could see attractive growth opportunities in the coming years.

Important Disclosures & Definitions

1 Nation’s Restaurant News, May 17, 2022

2 Kumar, A., Killingsworth, M., Gilovich, T., (2020), Spending on Doing Promotes More Moment-to-moment Happiness than Spending on Having, Journal of Experimental Social Psychology, Volume 88, May 2020

3 Vacasa’s 2022 Summer Travel Trends, April 2022, https://www.vacasa.com/discover/summer-travel-trends-2022

4 Global Insights Briefing: Venturing Back Out with Care, Think With Google, March 2022, https://www.thinkwithgoogle.com/consumer-insights/consumer-trends/travel-and-local-search-trends

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ALPS Advisors, Inc. is affiliated with ALPS Portfolio Solutions Distributor, Inc.


ALPS Portfolio Solutions Distributor, Inc. is the distributor for the Fund.


TVL000140 07/31/2023

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