Dynamic pricing comes to Major League Baseball

Every once in a while, one of our price-b!tching threads gets around to the idea that amusement park pricing ought to be more flexible. Why should it cost the same to get into the park on a cold, windy, rainy Tuesday in May as it does on a warm sunny Saturday in July?

Well, the SF Giants have asked the same question about tickets to their games. From today's NYTimes:

http://www.nytimes.com/2009/05/18/sports/baseball/18pricing.html

There has been talk of doing this in the concernt industry as well. The objection of course is that it may make these events so much of a luxury item that "normal people" can't afford them. I'm anxious to see what kind of response they get.

The Cleveland Indians are doing it as well. For certain games, you can get Diamond Box seats for $35. Normally they're $85-$90. For the games with reduced pricing, you save more for the more expensive tickets. The cheaper seats have minimal discounting.

I always thought it was funny that a $5 hot and ready little ceasers pizza, is $18 at a Detroit tigers game.

The company that owns the tigers, owns the little ceasers pizza.

The Giants thing is different than just some cheap days, though---they update prices for games daily, depending on how factors change over time. And, unless I misunderstood the article, it's not just lowering the price---it could also be raising it.

The power of Information Technology is that all consumers and all suppliers can have up-to-the-minute data regarding supply and demand at all price points for virtually any goods and services available in the marketplace. As far as I can tell, this helps all consumers...and all businesses that are willing to adapt to the new realities (CF not necessarily included, LOL).

Well, it's only 2000 seats in left field (of the 41,000 at the stadium), but it's a start.

We talked about stuff like this years ago. If anything, it shows how knowledgable and understanding some of the people around here are when it comes to this sort of thing.

And while the article focuses on higher sales with lower ticket prices, if you click through the link at the beginning to the original SF Examiner article is explains more clearly that the $13 seats in question now sell anywhere from $8 to $40. (that's anywhere from a 40% decrease to a 300% increase) I'd be willing to bet that when all is said and done, the average price of those tickets is more than $13 under the new system.

Seems like a no-brainer for amusement parks. Jack up the prices on weekends when demand is high, drop it on rainy days to put people in the park. Hell, you don't even need software to figure it out. :)

I wonder how far baseball will go with this. Would it get to the point where the marketing people tell the manager he has to pitch Joe Schmoe on 3 days rest, in order to achieve a "premium" pitching match-up against the ace pitcher for the opposing team coming to town? Of course, owners would do kind of thing all the time years ago, before there was a players' union.

Would you get a partial refund if you bought a ticket for a game where Cole Hamels was supposed to pitch but you find out the day before he's on the DL?

Kennywood did this back in the 90's. It was $2 or 3 less to visit on weekdays. Not sure why they went back to the one-price-fits-all model.

The article mentioned price increases on days where promotional items are given away. Kind of defeats the whole purpose of getting the item for free if you pay more for the seat.

Otherwise, if it means cheap seats on slow days I like the idea. Not so much for parks though since it would mean days where the park would typically be empty would be a lot more crowded if tickets were heavily discounted.

For both Dorney and Great Adventure most weekdays in May and early June are empty except for event days like music and physics days because it is a school day and lines are usually short or nonexistant. If they lowered the gate price to $15 - $20, it might convince a lot of people to go to the park on those days.

If they lowered the gate price to $15 - $20, it might convince a lot of people to go to the park on those days.

I can see what you're saying, but would the volume of people arriving on those slow days offset the lost revenue on thr busy days?

How would this work in an amusement park sense? I'd have to imagine low attendance days would drive the price up.

Lord Gonchar said:

Seems like a no-brainer for amusement parks. Jack up the prices on weekends when demand is high, drop it on rainy days to put people in the park. Hell, you don't even need software to figure it out. :)

I see what you're saying, but it might sound better to the public by charging "regular" price Friday-Sunday, and a discounted price Monday-Thursday.

Here's a question though. With a lot of ticket sales already being done online with varying discounts, how would you get people to use those tickets on off days? Would you offer tiers of tickets online, noting that these tickets can only be used certain days? That is, if the park's intention is to divert some of the customers from more crowded to typically slower days. If the park just wants the money, then they wouldn't care what day you show up with your online tickets.

The assumption being brought into this discussion is that pre-sale is the dominant form of ticket acquisition, and as we know, that's not even remotely the case with theme parks. Witness the lines at the ticket booths on any given day. Given that arrangement, there is an expectation that you'll arrive and pay a certain price. While paying less might be a nice surprise, you can't get away with paying more.

Well, how are the Giants pulling it off?

Maybe you buy your ticket for a certain day? Seems pretty easy to me.

I mean, there's not many questions as to if this would work. If I'm led to believe the article Brian linked to - it is working.

Simply adapt that for amusement parks. Take the variables (expected crowds, weather, rides down, etc) and create a moving price point based on demand and offered experience.

Next Tuesday is some big weeklong festival event in town, the weather looks to be rain and the big coaster is waiting for a part to arrive? You're in for $20

Sunny Saturday with no problems and a special free concert by teen sensation Chip Skylark? Looks like it's a $50 day.

Heck, even the Giants seats that aren't 'dynamically priced' have three different price points based on Regular, Feature or Premium games. Start there. Regular, Feature and Premium days at the park. Dorney already kind of does this based on times of year. Early season is a lower ticket price - presumably because of the lack of water park. Later in the season you'll pay more.

I guess I don't get where any confusion comes from. The price fluctuates. Simply tie a ticket to a specific date (or price point like the "Regular, Feature, Premium" thing. If doing date-specifi pricing, maybe even offer an open-date ticket at the maximum price (minus a small discount for online pre-purchase) that's good for any day. If doing the three tiers, then a ticket gets you in for that level of day or below. The possibilities seem pretty endless to me.

If people can use a color coded calendar to figure out park hours, then they could do the same for pricing.

"Chip Skylark"? Nice Fairly Odd Parents reference. :)

Anyway, this is not new to baseball. The Colorado Rockies were one of the first teams to charge differently based on the opponent. I remember reading about it in the paper years ago. You paid more for the better teams, and less for the Pirates. :)

-Tambo

You're ignoring the fact that there's an expectation gap there, Gonch, when it comes to an amusement park. I've never bought concert or sporting event tickets day-of, and I suspect as a percentage of sales, these are small. They're also for tickets that you expect to vary in price by seats as well. It's totally different from an amusement park.

Well guys, a rain storm on a week day can kill a baseball game, but that's 1/8 the total time a park is open. Why should a park discount tickets to 1/2 price or so when it's pouring?

Sesame Place does the best with rain I've seen. Buy your tickets, if it rains and they have to close rides/water slides for over an hour, you leave the park and get a voucher for a free visit.

As for pre-sales, the ONLY parks I see that don't suffer from the long lines at ticket booths are the Disney parks since they hit you up before the whole thing at the resorts or another park. Most people who buy before they get to the parks at regional parks did so online or at a discount at the grocery store or something like that...

Not sure I'm following completely, Jeff.

Are you saying people are going to show up expecting to pay one price and find another listed at the gate?

RatherGoodBear said:

Here's a question though. With a lot of ticket sales already being done online with varying discounts, how would you get people to use those tickets on off days? Would you offer tiers of tickets online, noting that these tickets can only be used certain days? That is, if the park's intention is to divert some of the customers from more crowded to typically slower days. If the park just wants the money, then they wouldn't care what day you show up with your online tickets.

Well, currently the Hershey discounted tickets you buy at Giant are set for $36.95 and can only be used in May. Starting June 1st, when you buy the tickets at Giant they will be $41.95. I don't know if there will be another increase for July/August or not. I'm guessing the same idea could be used for on-line sales.

But either way, it sounds like in some cases this idea is being implemented in some form already. It's just not currently a dynamic system that will adjust pricing by the day, as necessary to maximize profit and influence attendance.