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Experience Economy
Hospitality is experience business not service business

Let’s be bold and acknowledge hospitality as a domain of knowledge distinct from service, and to do so, we need to collectively foresee and design the future of hospitality as experience business – hospitality 4.0.

Published : 15.02.2021

The concept of hospitality, in Finnish, remains a mystery to many people. The concept of hospitality applied to business does not have an equivalent in the Finnish language. The term ‘vieraanvaraisuusala’ (hospitality sector) indicates hospitality as a sector/area of economic activity, and the term ‘vieraanvaraisuus’ (hospitality) remains confined to the private sphere. This means that, in Finnish, there is not a clear term for hospitality as a domain of knowledge. In this vein, for the large part ‘restonomi’ is the closest representation of hospitality.

The importance of defining hospitality

The failure to define and understand hospitality as an evolving field of knowledge, will lead to its stagnation as a field of scientific endeavour, and to its absorption by other domains of knowledge.

Haaga-Helia has been at the forefront of hospitality management education for 50 years, and this unique expertise has been put to practice by designing educational hospitality programmes for external higher education institutions such as the Institute of Tourism Studies in Malta. This competence is also of contemporary importance in Haaga-Helia’s ongoing education reform of the bachelor programmes, in which hospitality will be one of the application units available in Finnish and in English to prospective students.

Hospitality is service and more

In the past decade, management/business degree programmes have been influenced by Vargo and Lusch’s seminal paper arguing for a new dominant logic, the service-dominant logic (S-D logic), which postulates all businesses as service businesses. However, the implicit assumptions adopted by S-D logic indicate a rationalistic philosophy, which inadequately accommodates the experiential meaning of people-to-people experiences. In other words, offerings, whether goods or services, are essentially embodied experiences.

If service is “the application of one’s resources for the benefit of another entity” (Vargo & Lusch 2008, 28) and “the application of specialized competences (operant resources – knowledge and skills) through deeds, processes, and performances for the benefit of another entity or the entity itself” (Lusch & Vargo 2015, 43), then we argue hospitality is service and more.

Hospitality is the art of hospitableness in hospitable spaces (physical and digital) for experiences and transformations supported by food, drink, accommodation and/or entertainment services, whilst aiming at communitas within commercial, social and private contexts. This conceptualisation of hospitality highlights its interactionist, relational and affective nature, its entanglement with technology-infused experiences and asserts it as distinct source of value. It is this view of hospitality that has guided our design of curricula for international higher education partners.

Transitioning from service-dominant to experience-dominant logic

When we define hospitality this way, we can see that all types of management degree programmes, and most businesses, are more than service; they are essentially hospitality. For example, ING, the Dutch multinational banking and financial services corporation, is responding to the banking sector’s digital revolution by changing their retail banks into hospitality co-working spaces. The Mercedes-Benz World is a pioneering brand experience centre offering hospitality and driving experiences. The World of Whirlpool is a fun, hands-on experience center offering exciting workshops, a chance to interact with experts, and opportunities to test home appliances. Finally, the CASE Tomahawk Customer Center is a premier year-round hospitality retreat and demonstration facility of backhoe loaders, excavators, wheel loaders, dozers, etc.

In other words, hospitality is as different from service as service is from goods. Everyday transactions of food, drink and shelter belong to the domain of service as they are about saving time. Conversely, hospitality entails the staging by the hosts and guests of a temporary, transgressive, immersive atmosphere in which conventional norms are abandoned, meaningful experiences become memorable and transformations effectual. Hospitality is about embodied memorable experiences and time well spent.

Many businesses need transitioning from a goods-dominant to a service-dominant logic, but many others need transitioning from a service-dominant logic to an experience-dominant logic. Let’s be bold and acknowledge hospitality as a domain of knowledge distinct from service, and to do so, we need to collectively foresee and design the future of hospitality as experience business – hospitality 4.0.

References

  • Lusch, R. F. & Vargo, S. L. (Eds) 2015. The Service-dominant Logic of Marketing: Dialog, Debate, and Directions. Routledge. New York.
  • Vargo, S. L. & Lusch, R. F. 2008. Why “service”? Journal of the Academy of Marketing Science, 36, 1, pp. 25-38.