The study’s aim is to examine the mediation effect of consumer perceived value on the relationship between escapism experience components and tourism development. A purposive sampling technique was used to collect data from various hotels in Arusha. One hundred twenty-three questionnaires were distributed, and only 78 were retained for analysis throughout the study. Statistical Package for the Social Sciences (SPSS 27) through descriptive statistics was used to analyse respondent profiles and the normality test of the data. Structural Equation Modelling through AMOS software was used to analyse the relationship of the variable and to test the mediation effect of customer perceived value on the relationship between arousal experience, memory experience, perceived quality, and tourism development. The main findings reveal that customer-perceived value fully mediates the relationship between memory experience and tourism development while partially mediates the relationship between arousal experience and perceived quality in tourism development. With the guide of the experience economy theory, the study’s novelty lies in the mediation effect of customer perceived value on the relationship between the escapism components and tourism development. With these findings, tourism stakeholders, including the hotel industry, are advised to focus on satisfying customers in the whole customer travel experience value chain, which includes before experience, during the experience, and post-experience
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