Price discrimination comes to restaurants

Thursday, April 14, 2011 8:23 PM

Restaurant sells advanced (non-refundable!) tickets to meals. Cool idea. Even cooler idea: Same restaurant. Same chef. Presumably "similar" meals. But, "busy" nights cost more, "slow" nights cost less.

We already see a little of this---Cedar Point is discounting tickets that are good only during May, and Disneyland does something similar for its slow winter season. But, how much longer before some park truly embraces this idea in a big big way?

And, when they do, will there be a secondary/scalper's market? I get all tingly just thinking about it.

http://www.npr.org/blogs/money/2011/04/14/135413767/restaurant-sell...ts-go-wild

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Thursday, April 14, 2011 9:15 PM

This has always and will continue to make complete sense to me. Better restaurants are always more expensive, so why shouldn't better days or better time slots be, too? If there was no such thing as "transaction cost", I would say that everything should be auctioned off to the highest bidder.

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Thursday, April 14, 2011 10:14 PM

It is a quite common business technique that is used to maximize profits and encourage people to dine in the park on the slower days. From a park visitor perspective, it may be annoying and irritating, but from a park business perspective it will always make perfect sense.

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Thursday, April 14, 2011 10:25 PM

I like the idea, to a certain extent, with parks changing the price according to the time of year. It seems to help disperse crowds, making slow times just a little bit busier, and busy times just a little bit slower. In other words, it evens things out.

But at an extreme level, it would kind of irk me. People should know the prices of something way before hand so that they can plan accordingly.

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Thursday, April 14, 2011 11:47 PM

This restaurant idea works fine if you're lucky enough to run an establishment that is capable of selling out every night. Chef Achatz's Next is destination dining, at least for now, and may be considered by the gourmands of Chicago to be an event - like going to a ball game, concert, or a hit show. Patrons will check for availability, pay in advance, and know to a degree that a certain experience awaits when the date arrives.

But seriously, how many restaurants can lay claim to all that? Even the nicest places in great cities have slow nights, so what then? Ticket prices for those nights plummet and the place loses money (provided Chef guarantees the same fine dining experience no matter what the ticket cost - and in theory that's how this should work to keep the scalpers and the onlooking economists buzzing) Ok, so the obvious fix to this is to open up those evenings to reservations and walk - ins, and ticket prices may vary. Nobody in their right mind would turn away business, right? But then the house is left to hire those additional employees they claimed they'd never need, the chef runs the risk of over-ordering, and we're back to square one . Meh. I mean, good luck to Next, I'd love to eat there, all that, but I don't see this as an enduring trend, even for the most in-demand table.

As for the amusement park, I love to take advantage of early or off season pricing, but many times I feel like I get what I pay for. Rides can run at reduced capacity, if at all, shops are closed, certain food items aren't available, shows aren't open, and weather is iffy. A "slow" day at the park can easily turn into a pain in the butt with long waits and little help from a reduced force of employees. In the end I'm not so sure it's really helping to even things out.

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Thursday, April 14, 2011 11:56 PM

Hotels have been doing this since forever. Having been married the hotel woman for as long as I have, I'm really convinced it's the purest form of supply and demand.

I don't see why any non-commodity business can't run that way. All it takes is knowledge of your market and all the details and weirdness (like RCMAC's examples) become as clear as day.

I often think we don't give enough credit to the businesses (and especially amusement parks) for how much they really do know exactly what to expect on any given day...variables included.

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Friday, April 15, 2011 12:24 AM

Every buffet in Vegas, as well as the one at Cedar Point, charges differently based on demand. No shockers here.

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Friday, April 15, 2011 12:29 AM

...Now that you mention it Jeff, buffets like Ponderosa and Golden Coral charge a little bit more for the weekends, and movie theaters charge differently according to demand also.

POW! My mind is blown. ;)

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Friday, April 15, 2011 7:04 AM

Even decent-to-high end restaurants charge difference prices (often times for identical meals) depending on whether you're eating it before or after 4:00PM (or whenever "dinner" starts). Makes total sense to me, and always has.

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Friday, April 15, 2011 8:02 AM

Demand-based pricing has happened at restaurants for many years. I've lost count of the number of places that have identical lunch and dinner menus, except the dinner menu charges $10-15 more per plate and the only difference is an extra side dish or something.

Tickets are really a great idea, as long as the demand holds out. The chef knows in advance how much to order (reduces waste), and still gets the money for no-shows (reduces loss).

Last edited by GregLeg, Friday, April 15, 2011 8:06 AM
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Friday, April 15, 2011 9:27 AM

To be clear: I'm not talking about just the restaurants *in* the park. I'm talking about the price of admission.

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Friday, April 15, 2011 10:46 AM

LostKause said:


But at an extreme level, it would kind of irk me. People should know the prices of something way before hand so that they can plan accordingly.

But you can easily run a system that fluctuates prices, but all fluctuations are known in advance. Just look at Universal Orlando's Express passes. They vary from $26/person/day to $90 (wow!). Park admission shouldn't really be any different. Multi-day tickets would become an issue, though.

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Friday, April 15, 2011 11:09 AM

The express passes are good example. They are dated, non-refundable, and their price goes *up* as demand increases---it is not just set once and left there.

For example, I bought my family VIP passes for their President's Week trip to UO/IOA. They start at about 2x the price of regular park-to-park tickets, but include unlimited access to Express. The price I paid was one or two notches lower than the price they were ultimately listed for as the day drew near.

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Friday, April 15, 2011 12:09 PM

Wasn't Subway doing some sort of "after 5pm" deal or something like that to create demand at night? They knew their BUSY times were lunch hours - so they attempted to drum up business during their slower times. Once they went away from that model (with their $5 footlong campaign), then they started trying to attract breakfast business.

Clearly, Doctor's Associates knows their market, and is busy figuring out how to take advantage of their busy/slow times to try and level out their business throughout the day...that's just smart.

Note also that Disney has begun running deals at various eateries where you can get discounts IF you are willing to eat either before or after the lunch rush...they've been busy on the FB with that kind of stuff lately. ;)

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Friday, April 15, 2011 12:17 PM

Swim, I was talking about the surprises associated with the price of something the moves up and down, that I would be against. As long as I would know the price a month or so before hand, I'd be okay with it. But I don't want to go on a park website and see that tickets for the day I want to go will be somewhere between a and b and we will bill you credit card accordingly. That would be more trouble than it's worth.

What might be cool is that if a park offered a lock in for the lowest price if tickets are bought online before a certain date prior to arrival. Paying now could guarantee a certain price.

On the other hand, I prefer simplicity in pricing, and what the parks do now, even the ones who charge more in the busier season, seem fine to me. Who wants to go through the hassle of fluctuating admission prices for anything?

Welcome to TravisLand's website:

Admission - between $19,99 and $59.99, depending on anticipated daily crowds formulated by group reservations and nearby hotel occupancy. Please see our updated admission page for daily admission the day before your arrival. Admission rates can change at noon, two-o-four, and six-fourty-three each operating day. The current admission price will be displayed at the main gate.

Credit card users - we will charge your credit card the day before your arrival date, at the discounted rate, which the two-o-four rate for the day of your arrival. To see how much you paid for your tickets, please look at your statement.

SuperSpeedy Line-cutter's Pass customers - Please see current prices at SuperSpeedy Line-cutter's Pass window. Depending on crowds, rates can also change at nine minutes past the hour, throughout the day. Approximate prices for SuperSpeedy Line-cutter's Pass are:

- between $29.99 and $109.52 for regular SupersSpeedy Line-cutter's Pass per person

- between $59.99 and $149.52 for Gold SuperSpeedy Line-cutter's Pass per person

- and between $99.35 and $189.53 for Ultimate SuperSpeedy Line-cutter's Pass (recommended) per person, depending on crowds.

Games and Concessions - Prices fluctuate 12 minutes after the hour for games (except for games in kiddyland, where they may change 21 minutes before the hour), and 42 minutes before the hour for connsessions (except at Amazing's County Buffet, where prices could change 6 minutes before the hour on odd days of the month, and 32 minutes each hour on even days of the month) This excludes stand-alone drink stands.

Stand-alone Drink Stands - Prices are determined with the outside temprature for hot and cold beverages. Each drink stand has a digital temperature display, which shows the current temperature. Please see display for current prices

Gift Shop - Discounts on ponchos and umbrellas given at Umbrella's Unlimited on sunny days. Discount determined by weather predictions from our sponsors www.accuweather.com . The price of toys and plushies at Plushies-R-Us will be determined by the amount of daily child tickets sold within the park, updated to the minute. Prices at Ice Cream / You Scream soft serve stand are determined by how many lactose intolerant patrons or diabetic patrons are present within the park. This information is collected by a questionnaire given to each guest before entering park at the admission gate.

Coin-operated Restrooms - Prices fluctuate between ยข27 and $2.68 (correct change only), and is determined by food and drink sales within the park.

:) :) :) Enjoy your day at TravisLand!!! :) :) :)

I hope someone enjoys that outburst of creativity. lol

Last edited by LostKause, Friday, April 15, 2011 12:18 PM
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Friday, April 15, 2011 12:46 PM

I'm going to TravisLand with a cooler full of food and water in the car, and a catheter so I don't have to pay to use the restroom. How you like those apples?

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Friday, April 15, 2011 1:00 PM

LostKause said:
Swim, I was talking about the surprises associated with the price of something the moves up and down, that I would be against. As long as I would know the price a month or so before hand, I'd be okay with it. But I don't want to go on a park website and see that tickets for the day I want to go will be somewhere between a and b and we will bill you credit card accordingly. That would be more trouble than it's worth.

Which is why it would never happen that way.

Worst case scenario - if it happened to be too far out, you wouldn't be able to purchase tickets until pricing was set. (like flights or hotel rooms)

You keep going back to this goofy idea that pricing changes by the moment. It doesn't work that way in the real world.

Flight tickets, car rentals, hotel rooms, restaraunt reservations - it would not be any more confusing or difficult to buy park tickets under fluctuating pricing than it is to do purchase any of those other things that do it already.

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Friday, April 15, 2011 2:02 PM

Raven-Phile said:
I'm going to TravisLand with a cooler full of food and water in the car, and a catheter so I don't have to pay to use the restroom. How you like those apples?

That will look really sexy when you wear shorts on hot days....

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Friday, April 15, 2011 2:03 PM

TravisLand should auction off line-cutting passes at the exit ramp of each ride to the highest bidder. And you could have a plainclothes employee bid against people, just to see how much Gonch is willing to pay. :)

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Friday, April 15, 2011 2:24 PM

Lord Gonchar said:

LostKause said:
Swim, I was talking about the surprises associated with the price of something the moves up and down, that I would be against. As long as I would know the price a month or so before hand, I'd be okay with it. But I don't want to go on a park website and see that tickets for the day I want to go will be somewhere between a and b and we will bill you credit card accordingly. That would be more trouble than it's worth.

Which is why it would never happen that way.

Worst case scenario - if it happened to be too far out, you wouldn't be able to purchase tickets until pricing was set. (like flights or hotel rooms)

You keep going back to this goofy idea that pricing changes by the moment. It doesn't work that way in the real world.

Flight tickets, car rentals, hotel rooms, restaraunt reservations - it would not be any more confusing or difficult to buy park tickets under fluctuating pricing than it is to do purchase any of those other things that do it already.

Doesn't the stock market work this way? (I'm kidding of course but couldn't resist this example)

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