3 Stocks Fueling The Experience Economy
Updated: Sep 30, 2019
In a world of cheap travel and social sharing, modern consumers — especially the younger ones — are increasingly valuing experiences over products. Here are three companies that are tailor-made for this new trend.
For previous generations, any jump in disposable income might have gone towards the mortgage or been stashed away in a rainy-day fund. For millennials, that money is more likely to be spent on plane tickets to an exciting destination, or at least on a trip to the local boutique coffee shop for a photogenic flat white. Amid a global housing crisis and a rising cost-of-living, young people are investing in moments, events, and adventures: the backbone of what we’ve come to call the experience economy.
As one young business person told CNBC: Millennials “aren’t spending our money on cars, TVs, and watches… We’re renting scooters and touring Vietnam, rocking out at music festivals, or hiking Machu Picchu.” The following three companies are the ones enabling experiences like those, and helping customers share them with the world.
Founded by husband-and-wife team Kevin and Julia Hartz, Eventbrite (NYSE: EB) allows creators and entrepreneurs to promote and sell tickets for local events, including concerts and comedy shows. Popular with the young, the company draws all of its revenue from fees associated with the sale of tickets.
Eventbrite has just celebrated its first birthday as a public company, and it’s been a rough one, with three quarterly misses and several high profile cancellations on its platform. However, the company did distribute an astonishing 265 million tickets in the period, and it remains the service of choice for small and medium-sized event planners worldwide.
2. Booking Holdings
While Eventbrite makes it easy to organize and attend shows, Booking Holdings (NASDAQ: BKNG) does something similar for travel. The company, formerly called Priceline, provides customers with travel-related services and is the market leader in matching customers with hotel rooms, car rentals, and restaurants. It operates in almost every country, with its apps and brands including Booking, KAYAK, Priceline, and Agoda.
Last year, the company spent more than $1 billion in strengthening its partnerships in China, which is already one of the world’s largest markets for travel. Following a better-than-expected earnings report in August, CEO Glenn Fogel reaffirmed the company’s interest in maintaining a presence in the region, despite recent political setbacks. “In the long run, there’s going to be a lot more Chinese travelers outbound, so it’s important that one doesn’t just pull back because of any sort of short-term blip.”
Airbnb might have more brand power, but Booking Holdings has positioned itself well to take advantage of almost any trend in the travel space.
It would be impossible to talk about our modern hunger for experience without mentioning Facebook (NASDAQ: FB). Though the company’s original ‘Big Blue App’ played a central part in turning a whole generation into social media users, desperate for attention and ‘likes,’ the truly defining app of the experience economy is, of course, Instagram. One might go as far as to say that many people use Eventbrite and Booking.com just so they can use Instagram. In other words, they live to take photos.
Obviously, no tech company has been more widely vilified in recent years than Facebook, and often for good reason. But it’s worth remembering how massively popular the company’s social apps actually are. Every day, more than 2 billion people use either WhatsApp, Messenger, Facebook, and Instagram, for either personal and professional reasons. If any company can be charged with inaugurating the era of the experience economy, and helping the concept of ‘sharing’ go mainstream, it really has to be this one.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in Bookings Holdings, Eventbrite and Facebook. Read our full disclosure policy here.