AI Can't Replace the Joy of Being There: A Portfolio Manager Makes the Case for Investing in the Experience Economy
Looking to insulate your portfolio against AI disruption? One thing it can't replace is the enduring delight of theme parks, live entertainment and other areas of the experience economy.
Artificial intelligence can do some remarkable things.
It can write software, generate images, analyze data, answer customer service questions and perform tasks that once required highly trained professionals.
As AI technology improves, investors are understandably spending a lot of time thinking about which businesses will benefit — and which ones might eventually find themselves obsolete.
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But there's another way to think about investing in the age of AI.
Instead of asking only what AI can do, consider asking what it can't replace.
- A cruise through the Caribbean
- Seeing your favorite band in concert
- Riding a roller coaster with your kids
- Skiing down a mountain
- Spending a weekend in Las Vegas
AI could change how these businesses market to customers, set prices, manage staffing or operate behind the scenes. But it's unlikely to replace the fundamental experience they're selling.
That makes the experience economy an interesting hunting ground for investors concerned about technological disruption.
AI-resilient doesn't mean risk-free
Before going further, an important distinction is necessary.
These businesses can still have bad years. Weather matters; so do gas prices, airfare, consumer confidence, labor costs and the health of the overall economy.
But those are very different risks from technological obsolescence.
A ski resort can have a bad year because it doesn't snow enough. That's very different from waking up one morning and discovering that a new technology has made skiing obsolete.
For long-term investors, I think that distinction is increasingly important.
Here are five areas of the experience economy worth understanding.
1. Cruises: A vacation you can't download
Few industries were hit harder by the pandemic than cruise lines. Ships stopped sailing, revenue disappeared, and operators took on enormous amounts of debt simply to survive.
What happened next has been striking.
Cruise demand didn't merely return; in many respects, it came roaring back. Carnival recently reported record second-quarter revenue, record net yields and an all-time high $9 billion of customer deposits. Royal Caribbean has similarly reported strong demand, record pricing and bookings running ahead of last year's levels.
That recovery says something about the value consumers place on experiences.
A cruise combines lodging, dining, entertainment, recreation and travel into a single vacation. AI might help cruise companies market cabins more effectively, personalize offers or operate ships more efficiently. It's much harder to imagine AI replacing the reason people take cruises in the first place.
Investors looking to understand the space will quickly come across the three major publicly traded operators: Royal Caribbean Group (RCL), Carnival Corp. (CCL) and Norwegian Cruise Line Holdings (NCLH).
Cruise lines still have traditional industry risks. Fuel prices matter, geopolitical conflict can disrupt itineraries, airfare affects the cost of reaching departure ports, and ships require enormous capital investment.
But those are familiar risks investors can analyze. The core experience itself remains difficult to replicate.
2. Theme parks: Technology can improve the ride, not replace it
Theme parks might be an even easier example to understand.
Disney can use technology to improve reservations, reduce wait times, personalize offers and manage its parks more efficiently. But no chatbot is going to replace taking your kids to the Magic Kingdom.
The same is true for SeaWorld, Busch Gardens or Universal Studios.
For investors, Walt Disney (DIS) offers exposure to some of the world's best-known theme parks, although its much larger business also includes entertainment, sports and streaming.
Comcast (CMCSA) participates through Universal, although theme parks represent only one part of the company.
United Parks & Resorts (PRKS), the parent of SeaWorld and Busch Gardens, offers more concentrated theme-park exposure.
Recent results also provide a useful reminder that technological resilience is not the same thing as business immunity.
Weather, airfare, gas prices and household budgets can all affect park attendance. Operators must also continue investing in attractions, labor and the overall guest experience.
Those are meaningful considerations.
But AI does little to diminish the underlying appeal of spending a day at a theme park.
3. Ski resorts: Sometimes the problem really is the weather
If there is one business that makes the thesis especially tangible, it might be skiing.
There is no digital substitute for standing at the top of a mountain on a beautiful winter morning and skiing to the bottom.
Vail Resorts (MTN) is the most recognizable publicly traded way for investors to gain exposure to the industry, with a portfolio that includes Vail, Breckenridge, Park City, Whistler Blackcomb and other resorts.
Vail has also recently provided a perfect example of the distinction we are making.
The company described the most recent western U.S. ski season as one of the most challenging winters in history, with poor snowfall hurting visitation at resorts in Colorado, Utah and Lake Tahoe.
That can be painful for shareholders.
But again, consider the nature of the problem.
A ski resort can have a bad year because it doesn't snow enough. That's very different from waking up one morning and discovering that a new technology has made skiing obsolete.
4. Live entertainment: Being there still matters
Music provides an interesting contrast between digital and physical experiences.
Technology has repeatedly transformed how we consume recorded music — from vinyl to CDs, downloads and streaming. AI might represent the next major change, making it easier than ever to create and distribute digital content.
Yet people continue paying substantial sums to see musicians perform live.
Live Nation Entertainment (LYV), which owns Ticketmaster and promotes concerts around the world, reported that nearly 49 million fans attended its shows during the second quarter, up 10% from the prior year. More than 143 million tickets for 2026 shows had been sold through mid-July.
Live Nation CEO Michael Rapino summed up the appeal particularly well when the company reported second quarter results:
"In a world of endless screens and AI-generated everything, the one thing that can't be copied is being there."
I rarely build an investment argument around somebody else's quote, but this one gets directly to the heart of the thesis.
AI can create a song.
It can't recreate standing in a packed stadium while 50,000 people sing the same song together.
For investors, Live Nation is the clearest publicly traded way to study this theme, with exposure spanning concert promotion, venues, festivals and ticketing.
Ticket affordability, artist availability, cancellations and regulation still matter. But strong demand for live events suggests that an explosion in digital entertainment has not diminished the value consumers place on physically being there.
Perhaps in some cases, the more time people spend looking at screens, the more valuable an experience away from them becomes.
5. Casinos: Own an operator — or be their landlord
Casinos provide another variation on the theme.
Modern destination casinos are much more than places to gamble. Las Vegas properties combine hotels, restaurants, nightclubs, concerts, conventions, sports and gaming into enormous entertainment complexes.
Investors interested in the operators have several familiar choices, including MGM Resorts International (MGM), Caesars Entertainment (CZR) and Wynn Resorts (WYNN).
These companies give investors direct exposure to the operating economics of the experience itself — room rates, gaming volumes, entertainment demand, conventions, restaurants and nightlife.
There is also another way to participate.
VICI Properties (VICI) is a real estate investment trust that owns many of the most recognizable experiential properties in the country, including Caesars Palace, MGM Grand and the Venetian on the Las Vegas Strip. Its broader portfolio includes gaming, hospitality, wellness, entertainment and leisure assets.
Rather than operating most of these businesses itself, VICI generally owns the properties and leases them to operators under long-term agreements.
That creates a different risk-and-return profile.
A casino operator participates directly in changes in room rates, gaming volumes and operating margins. A landlord such as VICI is more focused on rent collection, tenant credit quality, interest rates, leverage and deploying capital intelligently.
Neither model is inherently superior. They simply represent different ways for investors to participate in the same broad experiential theme.
And that leads to an important point.
Finding the right industry is only the beginning
Identifying industries that appear resilient to AI disruption can be a useful starting point.
It's not an investment strategy by itself.
Two companies operating in the same industry can have dramatically different balance sheets, management teams, valuations and growth prospects. One might be appropriate for an investor seeking long-term capital appreciation while another might better suit someone prioritizing income or lower volatility.
Price matters, too.
A wonderful business can still be a poor investment if investors pay too much for it.
That means the next step is evaluating the individual opportunities within attractive industries and understanding the role each investment would play within a broader portfolio.
For investors who don't have the time, resources or inclination to do that work themselves, this is one area in which a thoughtful adviser can add value.
At Meristead Wealth, we start by understanding each client's goals and financial situation. From there, we determine an appropriate mix of investment strategies, choose the industries and individual exposures within those strategies, and actively manage them as conditions change.
That last part matters: Markets change; businesses change; valuations change. Clients' lives change too.
The fact that an investment appears resilient to one particular threat doesn't mean it should be owned at any price, in any amount or at all times.
Invest in what still requires showing up
AI is likely to create enormous opportunities. It will also create disruption. Investors should spend time understanding both.
Amid all the excitement about what AI might eventually be capable of doing, it's worth remembering that people still like to travel, gather, explore, celebrate and experience things together.
- We still want to ride the roller coaster
- We still want to ski the mountain
- We still want to see the concert
Sometimes, one of the most useful questions an investor can ask isn't what will be replaced by a new technology.
It's what probably won't be.
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