What is The Experience Economy & How Can You Get On Board?
In this in depth article as a part of the Extended Dialog series, we draw on proprietary research, first-hand observation, and years of working at the intersection of design and development to examine the Visitor Experience economy — and the significant opportunities it presents for developers shaping the Middle East's next generation of destinations.
Understanding the Experience Economy:
Beyond Products and Services
The experience economy represents the evolution beyond agrarian, industrial, and service economies to one where businesses create memorable experiences as the primary product.
Pine and Gilmore's seminal framework illustrates this progression: mothers once made birthday cakes from farm commodities costing dimes, then bought premixed ingredients for dollars, then ordered $15 cakes from bakeries. Today, families spend $100+ for venues staging complete party experiences — often providing the cake for free.
This shift reflects fundamental changes in consumer behaviour. Globally, research by Eventbrite found that 78% of millennials would rather spend money on an experience than a material thing — a preference that shows no sign of fading.
In the Middle East, where nearly half the population is under 25 with relatively high disposable income, the implications are profound. The region's strategic positioning between East and West, combined with ambitious diversification initiatives like Saudi Vision 2030 and UAE Vision 2071, creates ideal conditions for experience-led development to flourish.
The Four Realms of Strategic Experience Design
Successful experience economy projects leverage four interconnected realms, each offering specific value propositions:
Entertainment (Passive Absorption) involves visitors passively absorbing experiences through their senses. Dubai Opera — which recorded a record-breaking 250,000 audience members during its 2023–24 season, the highest since its 2016 opening — exemplifies how cultural programming rooted in both local and international tradition can sustain and grow audiences year after year in a competitive entertainment market.
Education (Active Absorption) engages visitors as active participants in learning experiences. NEOM's media training programmes demonstrate this approach: since launching its first collaborative programme in 2020 with the UK's National Film and Television School, NEOM has trained more than 1,000 Saudis, with over 350 placements and internships across the sector. These programmes create exportable cultural value alongside direct economic returns, transforming passive consumers of entertainment into active contributors to a creative economy.
Escapist (Active Immersion) transforms visitors into active participants in immersive environments. NEOM's Trojena mountain destination, featuring Saudi Arabia's first outdoor skiing and vertical village experiences, represents this realm's potential, while Abu Dhabi's TeamLab Phenomena exemplifies the new generation of immersive experiences already operating in the region.
The logic is intuitive and well-documented: when visitors become participants rather than spectators, they stay longer, spend more, and — critically for developers — generate the organic social media content that no paid campaign can replicate.
Aesthetic (Passive Immersion) allows visitors to immerse themselves in environments without affecting them. The Burj Khalifa, Dubai's Museum of the Future, and Atlantis The Royal are all environments where architectural storytelling takes centre stage. These are not just buildings with experiences inside them — they are experiences that spill out to their surrounding areas - raising their values in the process.
The distinction matters for developers: when architecture itself becomes the draw, it extends dwell time across surrounding retail, dining, and hospitality offerings, creating secondary revenue streams and boosting the economics of the locality that surrounds these anchors.
The most compelling developments don't confine themselves to a single realm. They layer all four, creating environments where visitors can shift between passive and active, absorption and immersion, throughout a single visit. That layering is what distinguishes a destination from a location.
Regional Market Dynamics and Opportunity Scale
The Middle East's experience economy is underpinned by strategic national diversification initiatives that are channelling serious capital into experience-based sectors — tourism, entertainment, sports, and culture. The headline numbers demonstrate the momentum:
UAE Tourism is on a record trajectory. According to the World Travel & Tourism Council's 2025 Economic Impact Research, the sector is forecast to contribute AED 267.5 billion to the national economy in 2025, accounting for nearly 13% of GDP and supporting over 925,000 jobs.
International visitor spend alone is projected to reach AED 228.5 billion — 37% above the pre-pandemic peak of 2019. Dubai, whose GDP is now over 95% non-oil-based, has demonstrated that economic diversification through experience-focused development is not aspirational — it is operational.
Qatar's Post-World Cup Legacy illustrates how large-scale event infrastructure can generate sustained returns when properly leveraged. The $220+ billion invested in infrastructure over the twelve years preceding the 2022 FIFA World Cup transformed the country's tourism capacity.
The IMF's analysis found near-term contributions of 0.7–1.0% of GDP from visitor spending and broadcasting revenue alone, while the first nine months of 2023 saw over 2.8 million international visitors — already exceeding full-year figures for both 2019 and 2022. Qatar now aims to make tourism 12% of GDP by 2030, up from approximately 3% pre-pandemic.
Saudi Arabia's Entertainment Growth is perhaps the most dramatic long-term play. NEOM's media facilities have hosted 40 productions in just four years since completion, while its training programmes are creating a pipeline of local creative talent. In a country that only lifted its cinema ban in 2018, the pace of change signals a generational reorientation toward experience-based economic activity.
Cultural Authenticity: The Middle East's Competitive Advantage
The region's rich heritage of experience-focused architecture and hospitality provides authentic foundations for contemporary experience economy success. Traditional wisdom offers proven frameworks that international developers often overlook.
The Majlis Principle: Sophisticated Experience Design
Traditional Arabic hospitality spaces demonstrate sophisticated understanding of experience design principles that remain directly relevant for contemporary applications:
Spatial hierarchy creates clear transitions from public to private space, building anticipation and comfort through carefully orchestrated reveal sequences. Modern experience designers invest heavily in technology to replicate what traditional architecture achieved through proportion, materiality, and spatial planning.
Sensory engagement through incense, textiles, lighting, and acoustic design creates memorable atmospheres that engage multiple senses simultaneously. Neuroscience research consistently confirms that multi-sensory experiences build deeper memory formation than visual-only approaches — a principle embedded in traditional Gulf hospitality for centuries.
Social orchestration via seating arrangements and service rituals facilitates meaningful interaction, addressing the fundamental human need for connection that drives much experiential consumption.
Dubai's Al Seef development along Dubai Creek, designed by Meraas adjacent to the Al Fahidi Historical Neighbourhood, represents one approach to applying these principles in a contemporary commercial context — breaking retail and dining into small-scale pavilions that echo traditional arcade and souk typologies.
Its 1.8-kilometre waterfront promenade draws design cues from traditional proportions while accommodating contemporary hospitality programming. Whether it achieves genuine cultural authenticity or merely references heritage aesthetics is a legitimate debate among architects and urbanists — but its commercial success and popularity with both residents and visitors is not in question.
The Souk Experience Model: Proven Commercial Frameworks
Traditional marketplaces offer validated frameworks for experience economy success that contemporary retail developments struggle to replicate:
Discovery journeys through narrow passages create anticipation while strategic widening provides revelation points, optimising the psychological rhythm of exploration that drives extended dwell time. This is not nostalgia — it is spatial psychology that modern retail design is only now learning to articulate in formal terms.
Merchant storytelling creates emotional connection through personal interaction and product narratives, building the authentic relationships that generate customer loyalty impossible to achieve through purely transactional approaches.
Cultural immersion transports visitors beyond commercial shopping into environments that justify premium positioning through distinctive experiences unavailable elsewhere. Kuwait's Souk Al-Mubarakiya — one of the oldest markets in the Gulf, with over 200 years of continuous trade — demonstrates this enduring appeal.
Damaged during the 1990 Iraqi invasion, rebuilt with traditional elements preserved, damaged again by fire in 2022, and now part of Kuwait's $500 million tourism masterplan, it remains a destination precisely because its spatial experience cannot be replicated in a conventional mall. The narrow alleys, warm lighting, traditional cafés brewing tea over coals, and the interplay of spice, perfume, and textile merchants create a layered sensory environment that drives footfall without a marketing budget.
Post-Pandemic Experience Acceleration
The pandemic fundamentally rewired visitor preferences, creating new requirements that experience-focused developments are better positioned to meet. The shifts are well-documented across global consumer research and clearly observable in Middle Eastern visitor behaviour:
Outdoor access and spatial comfort have moved from amenity to expectation. Developments with significant outdoor components — particularly those designed for year-round usability in the Gulf's climate — now occupy a distinct competitive position. The preference for open-air environments, manageable crowd density, and intuitive navigation reflects a lasting behavioural change, not a temporary caution.
Authentic connection has risen sharply in importance. Visitors increasingly seek experiences offering genuine cultural or personal discovery rather than manufactured entertainment. This preference rewards developments that invest in cultural authenticity over generic luxury amenities — and penalises those that rely on imported formulas.
Flexible engagement reflects the desire for controlled social interaction. Environments where visitors can modulate between active participation and quiet observation — the kind of spatial variety inherent in traditional Gulf architecture — outperform single-function destinations that offer only one mode of engagement.
Health and wellness integration now influences experience choices across the board. Developments that incorporate wellness elements naturally, woven into the spatial experience rather than bolted on as separate amenities, respond to a consumer expectation that physical environments should actively support wellbeing.
Technology integration expectations have matured. Visitors expect seamless digital enhancement — intuitive wayfinding, personalised recommendations, frictionless transactions — without overwhelming complexity. The most successful implementations are invisible: they enhance the human experience rather than competing with it. Dubai Mall's implementation of indoor positioning and turn-by-turn navigation through its app, powered by Mappedin's beacon technology with over 2.8 million wayfinding sessions to date, exemplifies technology that serves the visitor experience rather than showcasing itself.
Technology-Experience Convergence
The convergence of technology and experience design is creating new categories of value for Middle Eastern developers:
Smart experience orchestration is moving beyond novelty into operational infrastructure. Indoor positioning, predictive analytics for crowd flow management, and personalised digital layers are becoming standard tools — not differentiators. The competitive advantage now lies in how seamlessly these technologies are integrated into the overall experience, not in their mere presence.
Hybrid physical-digital experiences blend architectural storytelling with interactive digital narratives. NEOM's Utamo venue combines physical construction with technology to redefine traditional entertainment, while Dubai's Museum of the Future seamlessly integrates digital enhancement with physical space. These are not technology demonstrations — they are experience design projects that happen to use technology as a medium.
The implications for developers are significant. Technology-experience integration creates competitive advantages that are expensive and complex for competitors to replicate — not because the technology itself is proprietary, but because effective integration requires the kind of deep experience design thinking that cannot be purchased off the shelf.
The Business Case for Experience-Led Development
The financial logic of experience-focused development rests on well-established commercial principles, observable across the region's most successful projects:
Premium positioning is the most direct mechanism. When a development offers an experience that cannot be found elsewhere — whether through cultural authenticity, spatial design, or programmatic distinctiveness — it escapes pure price competition. Tenants pay more for space within a destination than within a building, and visitors spend more when they are engaged than when they are merely present.
Extended dwell time translates directly to secondary spending. Every additional minute a visitor spends in an environment represents an additional opportunity for food, beverage, retail, and entertainment revenue. Experience design that encourages exploration, discovery, and lingering creates the conditions for this revenue multiplication without requiring any additional marketing spend.
Organic advocacy is perhaps the most undervalued financial benefit. Visitors who have memorable experiences share them — through social media, word of mouth, and repeat visits with friends and family. This organic promotion is more credible, more targeted, and more cost-effective than paid marketing. In a region where social media engagement is among the highest globally, developments designed for shareability generate marketing returns that compound over time.
Competitive resilience distinguishes experience-led developments during market downturns. Authentic cultural experiences, distinctive spatial design, and established community attachment are difficult for competitors to replicate and resistant to commoditisation. Developments competing solely on specification or price are inherently more vulnerable to market pressure than those competing on irreplicable experience.
Operational benefits are less visible but equally real. Well-designed experience environments tend to attract higher-quality tenants, generate stronger staff satisfaction and retention, and experience fewer security and maintenance issues than environments designed purely for function. When people enjoy being somewhere, they behave better — a principle that has direct operational implications.
The Opportunity:
Transforming Development Through Experiential Value
The experience economy represents more than a trend — it reflects fundamental changes in how people value their environments and make decisions about where to spend time and money. Middle Eastern developers who embrace this shift position themselves to capture disproportionate market share while building sustainable competitive advantages that pure scale or luxury cannot match.
The region's trajectory makes the opportunity clear.
The UAE's tourism sector is forecast to contribute nearly AED 287.8 billion to the economy by 2035. Saudi Arabia is investing at an unprecedented scale in entertainment, culture, and tourism infrastructure. Qatar is leveraging its World Cup legacy to build a diversified visitor economy. Across the Gulf, national strategies are aligned around experience-based economic diversification.
Success requires recognising that effective experience economy implementation is not about adding entertainment to existing developments — it demands fundamental rethinking of how developments create value. The most successful projects treat buildings as frames for experiences rather than standalone objects, prioritise community engagement over individual consumption, and integrate cultural authenticity as a competitive differentiator rather than a decorative element.
The frameworks, technologies, and market conditions are aligned.
The question for developers is not whether the experience economy is relevant — it is whether they are designing for it intentionally or hoping to retrofit it later.
Like What You’re Reading?
These articles are a small part of our research and strategic advisory Services.
The insights shared in Extended Dialog are designed to challenge assumptions, inform strategy, and spark new thinking around how destinations are experienced. But insight is most valuable when it's applied. Our role is assist our partners to turn vision into reality with frameworks that shape real decisions — from early masterplan thinking through to the details of how visitors navigate, connect with, and remember destinations.
If what you've read here has raised questions worth exploring, we'd welcome that conversation.
