What Are You Actually Buying When You Invest in the Experience Economy?
Consumers are spending more on travel, concerts and leisure, but the investment exposure varies sharply between hotels, cruise lines, live entertainment, streaming and the funds that group them together.
McKinsey estimates in its State of the Consumer 2026 Report that the global experiences market grew 2.6 percent between 2023 and 2025, compared with 0.8 percent for non-essential goods. Luxury hotels grew by almost 6 percent, against roughly 3.5 percent for hotels overall. Consumers are still spending on experiences, although the strongest demand sits in very different parts of the market.
An investor looking for exposure to that spending has a less tidy choice. Live entertainment, cruises, luxury hotels, theme parks, gaming and streaming all qualify as experience businesses in one form or another, yet they do not share the same customers, margins or balance sheets. A portfolio built around the theme can end up carrying more exposure to technology, airlines or general discretionary spending than the label suggests.
Experience Spending Has Held Up Better Than Goods
Experiences grew 2.6 percent between 2023 and 2025, close to their pre-pandemic growth rate. Non-essential goods grew 0.8 percent, well below the 2.3 percent recorded between 2015 and 2019. Cost still ranks as the main consideration in experience purchases across generations, so higher demand has not removed price sensitivity.
The split is visible inside travel. Luxury hotels grew by almost 6 percent from 2023 to 2025, while the hotel market overall grew by about 3.5 percent. Affluent households have kept spending on premium travel while other consumers look harder at price, bundle value and lower-cost entertainment. A wealth portfolio therefore needs more precision than a general view that consumers prefer experiences to possessions. A luxury resort, a concert promoter and a streaming platform all sell leisure, but they earn money from different budgets and respond differently when consumers cut spending.
Live Entertainment Shows How Strong Demand Can Coexist With Different Margins
Live Nation reported USD 7.7 billion of revenue in the second quarter of 2026, up 9 percent from a year earlier. Almost 49 million people attended its concerts, 10 percent more than in the same quarter of 2025, while international attendance at stadiums, arenas and festivals rose by more than 20 percent. Event-related deferred revenue reached USD 6.4 billion, up 25 percent.
The operating figures moved differently inside the company. Concert revenue rose 8 percent, but concert adjusted operating income fell 14 percent as show timing, pre-opening venue costs and investment in new international festivals weighed on earnings. Ticketmaster adjusted operating income rose 14 percent. One company therefore gives investors exposure to promotion, venues, ticketing and sponsorship, each with different margins and capital requirements.
Even a business closely associated with the experience economy needs to be read line by line rather than treated as a simple bet on concert attendance.
Travel Puts Different Risks Into the Same Theme
Cruise lines depend on occupancy, ticket prices, fuel, financing costs and a large physical fleet. Hotel groups range from property owners to operators and franchisors with much lighter balance sheets. Airlines add aircraft, labour and fuel exposure. All three benefit when people travel more, but their economics differ sharply.
Disney adds another layer. Its Experiences division generated USD 9.1 billion of revenue in fiscal Q3 2025, up 8 percent, while segment operating income rose 13 percent to USD 2.5 billion. Domestic Parks & Experiences operating income rose 22 percent.
Buying Disney for theme-park demand still gives an investor exposure to entertainment, streaming, sports and intellectual property. Parks may be performing well while another division moves in the opposite direction. The share price reflects the whole company.
Fund Names Often Say Less Than Their Holdings
Broad consumer-discretionary indices are not experience-economy indices. They include automobiles, clothing, e-commerce and other businesses far removed from travel or entertainment. Some consumer-trend funds also carry technology as their largest sector exposure, while European travel-and-leisure indices mix hotels with airlines.
For a client, the holdings matter more than the fund name. The ten largest positions, sector weights and geographic exposure show whether the portfolio owns the businesses the investor had in mind.
Someone looking for affluent travel spending may find airlines or mass-market booking platforms taking a large share of the allocation. A fund associated with entertainment may hold large technology positions. A broad consumer fund may derive much of its return from companies whose earnings depend more on advertising, online retail or software than on leisure spending.
Customer Income Matters as Much as the Product
Premium travel has grown faster than the broader hotel sector, yet consumers across generations still rank price as the main factor in experience purchases.
A luxury hotel operator therefore depends on a customer with very different spending power from the audience of a cinema chain or a low-cost streaming service. Live entertainment sits elsewhere again: blockbuster tours can support high ticket demand among fans prepared to spend heavily on a limited number of events.
Two companies may both benefit from experience spending while carrying very different exposure to household income, inflation and discretionary budgets. The customer profile belongs in the investment case alongside revenue growth and margins.
Price Still Decides What the Investor Earns
Live Nation entered the second half of 2026 with revenue up 9 percent, attendance up 10 percent and deferred event revenue up 25 percent. Investors still have to judge those figures against the valuation, expected earnings growth and capital required for venues and festivals.
Hotels, cruise operators and entertainment groups face the same test. A company can operate in a growing market while its share price already assumes several years of strong earnings. The experience economy describes where consumers are spending. It does not tell an investor what price to pay for that growth.
What to Check in a Portfolio
Start with the revenue mix. How much of the company or fund actually comes from the activity you want exposure to? A diversified entertainment group or consumer fund can contain several businesses that dilute the original theme.
Customer income comes next. Premium travel, mass-market entertainment and digital subscriptions depend on different spending pools. Fixed costs and debt determine how quickly weaker demand reaches profits. Cruise operators and venue owners carry more physical assets than streaming platforms or hotel franchisors; airlines add fuel and fleet exposure.
For funds, concentration deserves a separate look. Sector weights, the ten largest holdings and geographic exposure often reveal more than the strategy name.
Numbers to Keep in Mind
2.6 percent — global experiences-market growth between 2023 and 2025.
0.8 percent — growth in non-essential goods over the same period.
Almost 6 percent — growth in luxury hotels.
Around 3.5 percent — growth in hotels overall.
USD 7.7 billion — Live Nation Q2 2026 revenue.
9 percent — year-on-year revenue growth.
49 million — concert attendance in the quarter.
10 percent — attendance growth.
USD 6.4 billion — event-related deferred revenue.
25 percent — year-on-year growth in deferred revenue.
USD 9.1 billion — Disney Experiences Q3 FY2025 revenue.
USD 2.5 billion — segment operating income.
13 percent — year-on-year growth in operating income.
The experience economy is not one exposure. A client buying into the theme is choosing between businesses with different customers, debt, fixed costs and valuations. The portfolio needs to show which of those risks it actually owns.
