Another pay-to-ride scheme, and this might be the worst of all...

Wednesday, June 6, 2007 6:58 PM
rblat:

You just desribed what I've been saying all along...and sincereley believe will happen.

I say skip all the non-sense that you guys are focusing on...THERE IS NO PERFECT SYSTEM!

The best option is to raise prices AT THE GATE and reduce attendance levels to manageable. Otherwise...as this thread demonstrates...you are going to have a lot of pissed off patrons...which is bad for repeat business in and of itself.

Sure rising prices exponentially will make those who cannot afford it mad...but guess what?...they are no longer your customers. Concentrate on making your customers happy. My system is the ONLY one that addresses this issue.

P.S. For an extreme example of how you cannot make everybody happy...what if park made admission and rides FREE! Sounds great on the surface until you get to the park and have a 9 hour wait for the Ferris Wheel! People will be pissed!

Simply stated...it is good business sense to make sure that your PAYING customers are happy. All this half-stepping and tiered clientele is just asking for problems.

Raise the darn prices until you have about 5000 people coming through the doors...and be surprised when these 5000 happy paying customers return again and again to reward you with mucha mucha profit margins and reduced operating expenses!

P.P.S. I admit my theory MIGHT be wrong as there may not be 5000 people willing to pay $200 per day...but my theory has NEVER been tried. All I see is Disney incrementally jacking up prices and MORE and MORE people coming. This tells me they are going TOO SLOW with the price jacks.

On the opposite spectrum is these tiered "pay to cut" systems from regional parks with stagnant attendance...and pissed off clientele that simply cannot and will not agree on what is fair (see this thread). This HAS been tried...and...?

In life...you simply cannot please everybody...no matter how hard you try. This simple sociological process is every bit as engrained as "wait your turn." The regional themers are beating their head against the wall implementing practices that violate all social norms.

The REASON Disney has succeeded while the others are tweaking and tweaking to no avail...is that Disney's Fastpass system does not violate any deeply engrained social norms. Everybody pays their higher admission prices and EVERYBODY gets an opportunity for a Fastpass (I would do away with this and charge more...but that is not important now).

Disney's descrimination happens OUTSIDE THE GATE. The people that go...get a fair chance without "feeling" like they are paying to cut. I'm sure there are some who cannot afford Disney who are mad...but we don't hear from them because they are not IN THE PARK having a crappy time and ruining it for others! Those IN THE PARK are not forced to violate any social norm...in fact the opposite actually happens.

Another deeply engrained social norm is that "the early bird gets the worm." People who arrive late may be upset...but deep down they know they've only themselves to blame. It is hard to stay mad too long. Those using Fastpasses are just happy to be "early birds."

I think...even Disney is making too much effort at crowd control...BUT there is no denying that their system is the best received. It all goes back to social norms!

...I could type all night....but I'm tired now!

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Wednesday, June 6, 2007 7:25 PM
matt.'s avatar

Jeffrey R Smith said:

P.P.S. I admit my theory MIGHT be wrong as there may not be 5000 people willing to pay $200 per day...but my theory has NEVER been tried.


http://www.discoverycove.com

?

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Wednesday, June 6, 2007 8:06 PM
Disney is an anomaly but they do have it right. The key to more revenue is to increase per capita spending, not increase attendance. How do we do it?

Step 1: Make an individual day really expensive. Make a multi-day pass slightly more. Who wouldn’t want to spend an extra $2 for another day in the park? While you’re at it why don’t you stay at our overpriced hotels? We’ll drive you to the park, FREE OF CHARGE!

Step 2: Just for visiting our park we want to offer you a chance to skip some lines. Granted, if you wait in the regular line it’ll be slightly longer. But come on, what’s 10 extra minutes when you can skip the line for some other ride? With all that extra time you have, why not check out our plentiful gift shops? We have wonderful souvenirs that aren’t really that overpriced. Grab a bite to eat! We have plenty of restaurants that serve not sub-standard food at a leisurely pace. After all with a FastPass you have nothing but time on your hands!

And there’s the trick. They offer services for resort guests that don’t really amount to much of anything if you stay off property. Multi-day tickets are cheap so you are more likely to buy them even if you don’t use the last day. That could amount to millions of dollars in the long run. If you want to visit multiple parks in a day you have to add park hopper to your ticket. More money for the mouse.

If people stay longer and visit multiple parks they are going to spend more in the parks. Disney has a recognizable brand and stuff you might actually want in their gift shops. And with the Fast Pass they are giving you the gift of time, or so it appears. Perception is reality. If people believe they are getting something for free then they are.

Another final thought. It seems like the amusement industry, and travel industry for that matter, still operates as a “cash business”. Only recently could you buy tickets in advance on the internet for most parks. We finance everything. Who will be the first amusement park to offer a financing plan? *** Edited 6/7/2007 12:08:19 AM UTC by mulfdog***

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Wednesday, June 6, 2007 8:16 PM
Lord Gonchar's avatar JRS:

You're preaching to the choir on that business model, man.

I think the period we're in is just an awkward transitional phase to what will pan out to be the business model you describe. (and just to note: that I've been championing all along)

No one is going to accept an overnight doubling of prices. Plain and simple. If any park changed their gate from $40 ot $80 or $60 to $120 or whatever next season, there's be a huge backlash.

But what about incremental increases that end up there over the course of several years?

Something else I always usually go on about in these threads is resistance to change and how change becomes the norm and accepted as such.

Right now you have parks like SF attracting customers willing to pay that $60 gate, but also a meaningful segment willing to make that an $85.

But make that $85 for everyone and the bottom will drop out. The masses need time to be conditioned to the price correction.

With each passing year you have more people used to paying the higher price and more and more of those who'd rather not, realizing it's the way to a better day at the park and sucking it up. There's also those that throw in the towel and realize it's not for them. (oddly enough, we have all three types participating in this thread alone) All the while you continue to bump those listed prices a few bucks each year.

At the other end of the tunnel you have a reduced customer base conditioned to paying high sums of money for a day at the park.

I agree with your ideas almost 100% - I've been saying essentially the same damn thing for months and months now. Where I disagree is in implementing the change so abruptly.

The theme park world you (and I) describe is coming. Flat out. There's no doubt it HAS to go that way at the bigger parks. The wheels are already in motion, it's just not going to happen overnight.


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Wednesday, June 6, 2007 11:19 PM
If large regional parks start charging $70 to $100 for admission (with no pay to cut schemes) and there are enough takers, there will now be the matter of those that are priced out of the parks or who just consider them too expensive.

This leaves a big opening for more of those parks that offer good value through reasonable pricing across the board and still have managable crowds allowing you to get plenty of rides in. These are the parks like KW, KG, LC, HW, IB, and some of the smaller parks. What these parks generally lack are the big $25 million dollar coasters that a CP or a SFMM can afford to build but otherwise they have similar offerings.

Right now, someone might think -- HW is a certain price and KI is only a few dollars more. Sure you have the extra food and drink costs but you also around 10 big coasters instead of three -- that might be worth it. So the family goes to KI and resigns themselves to the higher in-park prices. The same might hold in many cases with KG vs HP, LC vs. SFNE, etc.

If the difference in price is double, they might think -KI? -- too expensive -- so we'll go to HW instead. Now you will start to see more KW/KG/HW type parks spring up to fill the niche that the megaparks abandoned.


Arthur Bahl

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Wednesday, June 6, 2007 11:40 PM
Right on with your last response Gonch...that is the WEAKNESS of my system. Phasing is definatley needed. If this is what the parks are doing...I understand!

I know this is what the Orlando parks are doing...:)

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Thursday, June 7, 2007 12:04 AM
Totally right Gonch. You can't just toss a bunch of unsuspecting guests into a pot boiling overpriced services. You got to make them comfortable, then gradually increase costs over time to a low boil. Those who survive will be the top dollar customers under-populating the parks while paying over $120 gate prices, $15 hot-dogs, and $40 parking. Something to look forward to. *** Edited 6/7/2007 4:06:15 AM UTC by rc-madness***
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Thursday, June 7, 2007 1:11 AM
Lord Gonchar's avatar If it isn't obvious already, this topic greatly interests me. I enjoy the personal opinions and I'm interested in the pricing tactics the park use. I just dig the topic at hand.

With that said, I was sitting here looking up some stuff and want to tie a couple of others ideas together - just stick with me here, I'll try to do this with as much brevity as possible:


Arthur said:
Now you will start to see more KW/KG/HW type parks spring up to fill the niche that the megaparks abandoned.

Except that you'll now have 75% of the big park audience now looking to the small parks - won't they face the same issues the big parks currently are with crowd control and quality of experience?


JRS said:
Disney and the better run privates are growing just fine. The regional themers seem stuck in reaction mode…or worse…inaction mode. They are sitting on a gold mine in terms of the inelastic property of their product.

You know, I wasn't totally buying this until I looked into some info, but you're probably exactly right.

Let's look at some numbers. (I know, I know - I'll keep it simple)

I wanted to compare prices now with 10 years ago (seemed like a good time frame), but 1997 numbers are pretty much impossible to dig up. I was able to do numbers from 1998-2000 depending on the park so 7-to-9 years will have to do. Keep in mind all gate prices are 'list' and don't factor in any available discounts now or then.

Let's start with Disney. Since 1998 their gate has gone up 56% to where it sits now at $67.

That's some solid price moving and at a park that (as JRS said) continues to grow in attendance and generally please their customer base.

So how does that compare to some of the bigger regional theme parks?

- CP has only raised their gate 10% compared to 7 years ago.
- KI has had a 15% increase during that same time.
- SFGAdv has gone with a 33% increase since 2000.
- BGE visitors have seen ticket prices rise 48% since 1999

Interesting. Especially in comparison to what's happening in Orlando. But it gets even better. Let's revisit Arthur's quote:


If the difference in price is double, they might think -KI? -- too expensive -- so we'll go to HW instead. Now you will start to see more KW/KG/HW type parks spring up to fill the niche that the megaparks abandoned.

Hmmm. What about those golden 'value' parks that always get mentioned? We all know and love them and they're the bar by which others are often judged on these forums. What have they been doing with the gate?

- KW has bumped up the gate 63% compared to the RAD ticket of 1999
- KG's ride all day with wood has increased 60% since 1998
- HW's listed gate price is now 65% higher than it was 8 years ago

Very interesting again. The parks that generally are treated as value parks and among the most loved are outpacing the big parks in terms of price increases at the gate. In fact, they're even outpacing Disney. All of these parks that are raising the gate at much higher rates than others are also among the most well received.

Which leads us to rc-madness and his overplayed sarcasm card:


You can't just toss a bunch of unsuspecting guests into a pot boiling overpriced services. You got to make them comfortable, then gradually increase costs over time to a low boil...$120 gate prices, $15 hot-dogs, and $40 parking. Something to look forward to.

Dude, it's already happening...and not where you expect it.

Let's look into the future.

The future, Gonch?

Yes, let's look all the way to the year 2015! (Conan fans?)

Assuming the trends of the past 7-9 years hold steady what are the gate prices at these parks going to look like 8 years from now. Well, here's the future pricing of the parks I already outlined (rounded to the nearest dollar) from highest to lowest in 2015:

WDW - $99
BGE - $81
HW - $62
PKI - $58
KG - $53
CP - $51
KW - $50

Wow, that doesn't seem right at all does it? Or maybe it makes perfect sense?

Which parks are being the best received? The ones that are gradually, steadily, persistently tacking on more and more dollars to the entry fee.

Which are people pissing and moaning about? The ones looking for additional revenue streams when the easy one (ticket price) is right there in front of them lying half dead in the sun.

Which now goes back to JRS's comments:


Disney and the better run privates are growing just fine. The regional themers seem stuck in reaction mode…or worse…inaction mode. They are sitting on a gold mine in terms of the inelastic property of their product.

Indeed.

I can't see the gate prices playing out that way (as in my 2015 example) at all, yet if you look at the past 8 years (give or take) and project ahead using the same general price increase trends, that's exactly where the chips fall. It's clearly not right and something probably has to give sooner than later.

With all of that said, I need to go see if I can pre-purchase a Q-bot for my upcoming visit to SFStL. ;)


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Thursday, June 7, 2007 2:24 AM
Looks like I better invest in a wagon by 2015...to roll myself down a hill every time I get the urge for a thrill.

2015: "I belong to ADWA...Enthusiasts of Downhill Wagonriding of Americia." (I know I know, Wagon Riding is two words.)

Kidding, of course.

I can't see why some of you are excited at the idea that admission prices may be over $100 within the next 10 years. It quite baffling, actually. The only reason I see for you to be so happy about it is that you won't have to wait in line as long, because all of the "poor people" will be at home. I personally don't think that non-discounted admission prices could go too much higher without severe backlash.

I personally don't see a problem with where some parks prices are now when I find a nice discount. I saw a $25 KI ticket at my local gas station yesterday, and they are advertising on TV an early season discount admission of $34.95, IIRC.

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Thursday, June 7, 2007 3:10 AM
This is an important thread, and It's nice to see the ideas popping around.

I am, like dexter, totally and utterly confused as to why you guys don't hate the fact that prices might go up that much. If it gets to be that much, I'm going to get thrills some other way. Heck, at that point, it's almost cheaper to skydive.


Chattanooga needs a [B][I]ITG2[/I][/B] Machine!
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Thursday, June 7, 2007 3:35 AM
Lord Gonchar's avatar

dexter said:
Looks like I better invest in a wagon by 2015...to roll myself down a hill every time I get the urge for a thrill.

Ha! That's great. :)

As for why I'm not upset about prices potentially being that high - I can afford it! ;)

No seriously, I can't speak for anyone else. For me it's because I've already dealt with the exact same price changes the past 8 years. I remember paying $40-something bucks to get into Disney World. I remember paying less than $20 to do Kennywood. For me (and anyone visiting parks for at least the past 8 years) those changes have already happened. And they'll happen again...and again...and some more.

If you'd have told someone back in 1971 when WDW opened that it'd be $67 for one day there in just 35 years time - imagine the reaction.

Back then general admission to the park was $3.50 with ride tickets ranging from 10 cents for an 'A' ticket to 90 cents for an 'E' ticket.

Think of how silly cheap that sounds 35 years later. It's funny isn't it? $3.50 to get into the Magic Kingdom!

That's how silly cheap today's prices will sound 35 years from now. :)


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Thursday, June 7, 2007 6:09 AM
Actually KWs regular price went up for the first time in 5 years this year. They are also doing more discounting than was the case a number of years back.

HW 10 years ago was a much different park without Legend and Voyage and that darkride and with fewer water attractions. They charge more now bacause they have much more than they used to have. They're not the little "kiddie park" that they once were.

As for the big parks, those super expensive, super thrilling rides and attractions are what leads to the higher price. $25 million dollar coasters, etc. They bring in the crowds and also raise the overall costs. The situation with amusement parks has been a lot like health care. Both general inflation and new, expensive innovations compound the price increases. The difference is that health care is a necessity and has inelastic demand.

If the parks go too high, attendance will ultimately tail off sharply as many people choose other entertainment options instead. What is more likely to happen, however is someone coming in to fill that unsatisfied demand for parks at moderate prices (Mc Parks, anyone?). These parks would focus on less costly rides instead of the super expensive coasters, etc. Look at minor league baseball as an analogy. Its thriving in many cities because its affordable (often general admission is around $5 and food and drink prices are more reasonable than in the big leagues) and it's accessible locally in smaller cities. Altoona is a good example of this analogy playng out in both parks and baseball. The Curve is a big draw locally and the city has not one, but two small and affordable amusement parks.

Some parks already reach out to those that otherwise can't afford them already through their discounting system or by having special "bargain days". Others deliberately remain inexpensive because they know their market well enough.

A park like KW is well balanced in terms of attendance vs capacity and has some visitors spending as little as $20 while others may be spending $75 or more (in admission, food, games , merchandise, etc.). They reach out to many income levels and this appears to work well for them. Many big parks use the pay to cut to achieve a similar variation in spending among income levels but at a higher level.

Then there is Knoebels with its free gate and different ride pricing options. You can ride all day for about the same price as other mid-sized parks (except on summer weekends). On the other hand you can spend much less and still have a good time. (eg. $10 would get you rides on Phoenix, Twister and about 4 or 5 other rides).

Note that some of Cedar Fairs parks have lower admission prices tham they did several years ago. This means that not all parks are going to go up dramatically in the future. The place where sharply higher pricing can and will occur is with some of the desination parks and with parks making the transition from small parks to larger parks.

The destination parks have done this in the past and can continue to do it because the park admission is only a small fraction of the overall vacation cost for visitors when you consider travel to the parks (often from 500 or 1000 miles away), lodging, food (both in and out of the parks), etc. Also, these parks are places that dont depend as heavily on annual or more frequent repeat visits. For many, these parks are a once in a lifetime esperience.

HW represents an example of the second case I mentioned. An interesting question: how much will Waldameer raise their prices once RF2 is up and running?

There can and will be different approaches to pricing in parks. No single trend will dominate except that general overall pricing will rise somewhat because costs continue to rise. What works for Disney may not work for Six Flags or Holiday World or Waldameer. Each park will tailor their pricing to their market.


Arthur Bahl

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Thursday, June 7, 2007 8:38 AM
Perception is key. If I set my gate price to $120, you say "Wow, that's expensive!". Now I offer a $20 coupon to take it down to $100. Now you say, "Wow, I saved a ton!" (And it didn't even involve switching your car insurance!) If my gate price today is $50, I bet I can double it in the span of three years using the above idea without losing significant business.

Of course, using the RCT business model, I can increase my profits significantly by charging hefty fees to use the restrooms. :)

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Thursday, June 7, 2007 10:25 AM
This is where I bring Jeff...and his "perception of value" into the equation. As I surmised earlier (and rather subjectively...but with a keen sense of what is happening) and Gonch demonstrated objectively...Disney and the better run independent are raising prices through the roof.

Yet...these parks are universally loved by the masses and enthusiasts alike. At the end of the day…you usually have to search long and hard to find something to complain about. Notice than in the grand scheme of things Disney and Holiday World/KW are nothing alike. Some rely on excessive theming, others integrate food and “old-school” charm with classic ride technology. The only parallel is that they each offer a strong perception of value (and often don’t rely on yearly ride installations). When you leave the gates at the end of the day…you almost have forgotten what you paid…and instead concentrate on the good times. That is magic my friends. It is hard to put a dollar amount on it…but as we have seen…the ceiling is nowhere near.

The regional themers just do not seem to “get it.” The “pay to cut” variations fit into this equation in the sense that they piss off a lot of people. For every happy playa/Gonch there are tenfold people upset. A good chunk of the people leaving your average regional themer at the end of the day…regardless of how much fun they might have had on individual rides…do not have to look far to find reasonable excuse not to come back. The common emotional response is “it’s not worth it.”

Until the regional themers get a basic understanding of typical human emotions…they will find themselves in the unenviable position of relying on Coke-can admissions, under-priced season passes, and over-priced mega-rides just to pay the interest on the debt. Short-term “pay to cut” schemes are only going to hurt them worse. The key for regional themers is to find a way that they can be the ones raising prices every six months…for this, they must change their perception of value.

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Thursday, June 7, 2007 12:10 PM
Lord Gonchar's avatar

The regional themers just do not seem to “get it.” The “pay to cut” variations fit into this equation in the sense that they piss off a lot of people. For every happy playa/Gonch there are tenfold people upset. A good chunk of the people leaving your average regional themer at the end of the day…regardless of how much fun they might have had on individual rides…do not have to look far to find reasonable excuse not to come back. The common emotional response is “it’s not worth it.”

Well, now I get to play the flip side of the coin.

I'm not sure what you describe is exactly happening either. Look at the news story that just popped up on the main page - SF attendance is flat and revenue is up.

Granted we're not really into peak season yet and the article doesn't mention whether that's on a same park basis or accounts for the sold parks, but so far it looks like people aren't being scared away & Per Cap spending continues to rise.

We still have a litle ways to go before we get a clearer picture, but for now it looks good.


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Thursday, June 7, 2007 2:00 PM
There's this vast, vast chasm between 'I don't like it' and 'I don't like it, therefore America doesn't like it and everyone will react in the same way I do.'

Or perhaps don't react, to be more exact. How many folks here who are dead-set against Q-bots, VIP, Platinum rerides, etc have stopped attending those parks because of their policies? Anyone?

If no one has, then perhaps they DO react just as you would: With a sigh, a shrug and a resumption of previously scheduled plans.

-'Playa


NOTE: Severe fecal impaction may render the above words highly debatable.

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Thursday, June 7, 2007 2:12 PM
Gonch, the man who puts the ANAL into analysis :) ... You did a thorough job of telling us what percentage prices were raised at a number of parks since 1998 or so. I was curious to see how that translates into actual dollar increases. Because obviously, percentage increases don't mean much without knowing the baseline on which the increase is based.

Just to take two of your numbers (I'll let you do the others), Disney's price of $67 is a 56% increase. That means their "baseline" price was about $43, an increase of $24 over the time period. Knoebels POP w/ coaster option is $34.50, which you tell us is a 60% increase since 1998. That means their "baseline" price is around $21.50, or an increase of $13. So I really wouldn't say that Knoebels is "outpacing" Disney when it comes to increasing its prices. In fact Disney's increase was almost twice Knoebels' in terms of actual money.

The math is simple. If you raise the price of something that costs $10 by $10, you've increased the price by 100%. If you raise the price of something that costs $50 by $10, your increase is only 20%. Or, you need to raise your price by $50 for a 100% increase.

Here's a few questions. Since of train of thought here is that parks should raise prices astronomically and deal with fewer people willing to pay a much higher price-- do you think any parks have seriously bought into that yet? If so, why are attendance figures still considered a major part of a park's performance?

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Thursday, June 7, 2007 2:13 PM
Looks good? Hell, it looks fantastic! Because every one wins if the parks make tons of money. I'm sure we've all seen the incredible improvements of customer service over the past few years. But for those who seem concerned some will be left out in the cold during this increased value on thrill-parks, fear not. It won't be long before the amusement credit card will give everyone a chance for all the thrills they can possibly muster. Folks can go to all the parks they want for a year, and not owe a thing. And when Amusement parks end up owning a few extra mortgaged homes from those in debt, these properties can then be used to expand more parks. Everybody wins! *** Edited 6/8/2007 4:23:54 AM UTC by rc-madness***
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Thursday, June 7, 2007 2:52 PM
Lord Gonchar's avatar Technically true, RGB, but that's not generally how I think things are looked at.

$13 and $24 increases mean nothing without a baseline.

Say one park sells tickets for $13 and another for $75. Both increase their prices by $13. There's a big difference there. One is essentially doubling their price while the other is just raising them 17%. While it's technically just $13 either way, there is a big difference there.

Imagine that's your income. Would you rather have the percentage or the actual dollars? Makes a big difference in money coming in, so why shouldn't you look at money going out the same way?

However, if you want to deal in actual dollars, then here's the same list done that way:

WDW - $91
BGE - $73
HW - $52
KI - $52
KG - $47
CP - $47
KW -$44

The playing field still levels quite a bit. Actually, the parks land in the exact same order...the dollar amounts are just a hair lower overall.


...do you think any parks have seriously bought into that yet? If so, why are attendance figures still considered a major part of a park's performance?

1. No, not really.

2. I don't think attendance is that big of a deal. Those numbers pretty much only get spouted by the publicly held parks that must report everything. Attendance x per cap = revenue. They kind of have to list it.


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Thursday, June 7, 2007 3:02 PM

RatherGoodBear said:


Since of train of thought here is that parks should raise prices astronomically and deal with fewer people willing to pay a much higher price-- do you think any parks have seriously bought into that yet?


No. And in my opinion, they shouldn't.

GL dropped the price at the gate and didn't raise their attendance at all. CP tried it last year to no avail. If anything, that should teach a lower price doesn't mean higher attendance, despite high-school economic curves generally teach us.

If that's true, who's to say a higher price would net lower attendance? Without any hard evidence to support it, I'd speculate it would only mean lower per-cap spending behind the gates.

It's more about right product, right price if you ask me. People will spend for what they want. It's more about having what they want behind the gates.

But that's just my thinking.

-'Playa


NOTE: Severe fecal impaction may render the above words highly debatable.

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