Hospitality’s Second Act: Capitalising on the Enchantment Economy

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The successful vaccine rollouts mean global economies are now generally rebounding from the sustained social and travel restrictions of the past year. Consequently, service-hospitality organisations are seeing consumer activity like so-called ‘revenge tourism’ further speed up the recovery. Although demand will undoubtedly be high, so too will customers’ expectations. Having longed for entertainment, enrichment, and escapism, guests will not want to be disappointed. Operators should therefore be hypervigilant ‘wooing, and wowing’ consumers.

At a recent expert forum, organised by Seatrade Cruise and Aethos, panellists – including Agnelo Fernandes (Chief Strategy Officer at Terranea Resorts), Francesca Romana Gianesin (former SVP Experiences at Disneyland Paris), Jim Berra (Chief Marketing Officer at Royal Caribbean International) and James Houran, Ph.D. (Managing Director, Aethos Consulting Group™) – explored the notion of how companies can best meet these challenges for service-product differentiation and guest experience. The emerging consumer research and the panellists alike agreed that hospitality organisations must quickly and deftly answer these elevated guest attitudes by evolving their product and service offering. Gone are the days of the mere experience-led economy. Now, travel and tourism players need to welcome and structure their strategies around the enchantment economy.

Following-up on the panel, Aethos™ spoke with Francesca Romana Gianesin about how the enchantment economy should be approached from a Human Resources perspective. Indeed, organisations should not only strive to enchant external consumers but also their internal customers – i.e., the employees. We thus talked about how fostering deeper connection with the workforce ― and enchanting internal teams — will allow organisations to drive higher engagement, greater productivity, and stronger retention, whilst also strengthening their route to economic recovery.

Enchantment Economy – The Broader Context

‘Lockdown fatigue’ has become a well-known and widespread phenomenon. Having patiently adhered to social and travel restrictions, individuals are now eager to start living again, to socialise and to seek out new experiences. Hospitality companies want to take advantage of this intense pent-up demand, hoping for it to help ‘balance the books’. This poses a key question: “How can organisations best capture the attention, and spending power, of these eager customers?”

The answers lie in a company’s ability to capitalise on the current emotive drivers of the travellers and holiday makers. “For almost 25 years,” says my Aethos™ colleague and industrial workplace psychologist James Houran, Ph.D., “hospitality businesses have conformed to the classic concept of the ‘experience economy’ ― defined by a striving to woo customers by creating new, exciting, and memorable experiences.” But, as he points out, recent research suggests the level of emotional response sought by consumers has deepened and even evolved. “Gone are the days of the thrill-seekers looking merely to ‘escape’, or the socially-conscious looking for ‘authenticity’.” Instead, he says, “consumers seek to completely immerse themselves into settings that offer ‘awakenings’ – that is, disruptions to the mundane or difficult experience of their daily lives that specifically stoke a positive and transformative feeling of connection to a transcendent agency.” Simply put, he concludes, “we are talking about the need to be awed, delighted, and ultimately ‘enchanted’.”

“This quest for enchantment requires hospitality organisations to re-evaluate their brand promise, customer journey, and experience on offer,” says Francesca, who in the past has been VP EMEA for Disney Consumer Products, and who, in 2018, assumed responsibility for the end-to-end guest experience at Disneyland Paris. Continuing, she adds “we observe a marked trend towards ‘revenge buying’ and an increasing demand for unique experiences.” Organisations thus need to make sure to rethink their businesses and organisations, reassess investments and trying new things – in hospitality, we concluded, this will likely focus and centre around the people side of the business which forms such an integral component of the guest experience and brand promise. “A crisis is a terrible thing to waste,” says Francesca, so the roadmap to success needs to be a balancing act of preserving stability whilst breaking the mould and going for the unexpected by turbocharging the human element. We agreed bold moves would be needed.

Applying ‘Enchantment Theory’ to Human Resources

Companies that apply new learnings of the enchantment economy only to product offerings or curated experience packages will fail to fully capitalise on the economic rebound and recovery. This is because the most basic component of guest experiences must also be considered, i.e., the people delivering on brand promises. Sadly, many hospitality organisations across the globe continue to struggle with enticing employees back to work. It is reasonable to deduce that the economic recovery might be at risk if employees themselves are not ‘enchanted’. The obvious question becomes how businesses can effectively accomplish this.

Francesca talked about the foundation of Disney’s focus on aligning an employee’s body, mind, and soul with a company’s vision. Our very own ‘enchantment recipe’ boils down to three key steps:

• Always be re-energising: In a post-pandemic environment, boosting employee morale is more important than ever. “It takes people to make the dream a reality,” says Francesca, reminding us of the words of Walt Disney“. “At Disney,” she noted, “employees are trained to be enablers of the enchantment.” To perform in their jobs, they need to become an active part of the story making – and this is true for most employees in the hospitality sector. No one can excel, though, if they are drained or exhausted. “The unprecedented impact of the pandemic has caused huge stress, anxiety, and uncertainty for staff members,“ we agreed. Even if employees are now starting to return from furlough or part-time work, chances are individual workload will have increased with companies under pressure to do more with less. This, in combination with continued instability in the market keeps stress levels and frustration high. “The need to constantly work in ‘crisis mode’, the novelty to work from home and/or the necessity to adjust to new technologies is causing a lot of exhaustion and frustration,” Francesca says. This, in turn, negatively impacts productivity and engagement.

Managing fatigue is thus mission critical. Reinforcing leaders so that they themselves can make better decisions is a key step in ‘re-energising’ an organisation and its leadership. As Aethos’ workplace psychologist recently put it in an article published by the Boston Hospitality Review, leaders should “critically reflect on the impact they tend to have on their direct reports, peers, stakeholders […]. Does one’s efforts, relationships, and outcomes consistently ‘invigorate’ other people or ‘snap’ them? Ultimately, enchantment involves ‘inspiring vibes or energies’ from experiences or interactions – and that energy is just the jolt needed to propel us forward.”

• Routinely be engaging: Leadership teams and employees alike are so intertwined with the product and service delivery in hospitality that it is impossible to succeed without an engaged workforce. “One tends to think of Disney as the theme parks, rides and attractions,” says Francesca. “In fact, though, the ‘Disney Magic’ happens with and through its employees (‘cast members’) – they are the brand experience.” We agreed the same principle applies to the broader hospitality industry – whether it is hotels or other type of operations. The interaction between employees and guests can make the difference between success or failure, a happy and loyal customer versus a disgruntled one. “After years of financial struggle [at Disneyland Paris], we got record-breaking revenues because employees loved what they did and where they were and that transcended to customers loving what we did.”

Driving employee engagement requires company leadership team to be aware of the pressure points. When was the last time a pulse survey was taken? If so, how do results stack up compared to expectations? What trends or broader topics are being brought up, and are actions taken to work on identified issues? Engagement often comes with strong personal bonds between staff members and buy-in into the overall company mission and vision. Communication is thus key. “Disneyland Paris launched WeCast,” says Francesca, referencing a social media platform for cast members to be inspired, entertained, and engaged through podcasts, blogs, videos, and tutorials. “During lockdown, it helped sustain a sense of pride, belonging, and optimism, and it boosted advocacy during a challenging time.” She also references the importance of providing leaders with a ‘playbook’ to get employees involved in tackling ‘daily life hassles’, evolving around business processes and/or digitalisation, for example. “Concrete actions, she says”, help employees to see their contribution to the overall success of the company.

• Consistently be purposeful: Many individuals have re-evaluated their priorities and purpose in life during the pandemic. Employees are thus increasingly looking for organisations who reflect their views and principles. Companies who understand how to convey meaning to the work being done are better positioned to enchant their employees. Purpose and meaning can relate to society, the community, or other more holistic entities or beliefs – including sustainability. All too often, though, organisations are preoccupied with ‘control and processes’ – so much so that, as Aethos’ practice leader for leadership and performance management recently put it, “excessively rational or transactional corporate cultures […] dehumanise an organisation.” Instead, says James Houran, Ph.D., leaders need to create enchanted workplaces that promote meaningful and empowering experiences.

“At Disney, over the past twelve months, teams have done an exceptional job of helping local and national associations, hospitals, and many partners with donations of all kinds – food, protective equipment, medical equipment, and derivatives,” highlights Francesca. The key, here, is to be genuine, and to engrain such initiatives into the company culture which is lived and breathed. “Not every company will be able to reference a longstanding track-record in supporting local authorities or communities but Disney’s VoluntEARS [a team Francesca has been a part of for almost two decades working behind the scenes to give back and support those in need] also started small – taking the first step is what is needed!”

Closing Thoughts

In the quest to enchant employees, there is an as-yet unmentioned skill which successful leaders will know how to deploy – it is the ability to be empathetic. Empathy allows for more meaningful, engaging, and genuine conversations and business relationships. It comes with emotional intelligence which further allows leaders and staff members alike to be more affective at ‘reading a room’ – identifying potential stress scenarios, exhaustion, or other pressure points. It therefore also helps to proactively combat ‘pandemic fatigue’ – and re-energising teams is not possible without being emotionally connected to them. “At Disney,” says Francesca, “we have always said that we [the leaders] serve our cast members […]. Only through empathy and best in class relationships can we lead the change and transformation needed to come out of a crisis.”