Study shows theme park customers not fond of dynamic pricing

Posted | Contributed by Jeff

A study published last month by researchers Ady Milman and Asli Tasci at the University of Central Florida and student Gaurav Panse at the University of Waterloo in Canada surveyed parkgoers’ feelings toward dynamic pricing. It found consumers don’t like it, especially when it means they know they paid more than others.

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We all accept dynamic pricing with airfare, and varied pricing based on, let's say proximity to the stage, is also something we generally accept. Why do you suppose tiered access is such a big deal in theme parks?

Jeff - Editor - CoasterBuzz.com - My Blog

Because it's not always been that way? Or because it's (in theory) the same product, just on a different day?

I get it and support it for sure. But I think some people that would agree "this airplane seat is more valuable on the day before Thanksgiving" because of excessive demand wouldn't necessarily say the same thing about a high capacity outdoor theme park.

The consumer doesn't see a change in the value of the park/attraction based on the day. Even if a park is busy or not, I don't see that as a 'value' for the park to charge more/less for. Just my two cents.

"I don't like paying more than the next guy for something" is (a) completely unsurprising, (b) immaterial if enough other people either don't care or don't let it bother them, and (c) the goal of dynamic pricing in the first place.

The entire point of dynamic pricing is to discourage some people from coming at the busiest times, but make up for that lost revenue through others.

Last edited by Brian Noble,

http://cse.umich.edu/

Brian hit the nail on the head. "Consumers don't like dynamic pricing" is a predictable result with a survey like this. I can't think of a single product or experience where a majority of consumers would say they like it because they would not feel they are directly benefitting from it (even if in reality they are). The much more relevant and interesting question is how dynamic pricing affects consumer behavior and choices and I'm guessing the parks have enough data to paint that picture pretty clearly.

And in other news, jumping into a volcano will cause third degree burns followed by death.

Did someone actually get paid to research and write this article?!?

But then again, what do I know?

Agree with Diamondback- the parallel between number of seats on a plane or number of rooms on a cruise liner just doesn’t translate to number of people clicking through a turnstile at a park.

Perhaps it’s because the consumer can physically see the limitation of number of available seats/rooms.

I think there's also a very practical aspect to it; you look into booking flights and or arranging a vacation at a high level, and then once you've set your dates you look into booking activities. In a lot of cases, the day you choose to visit a theme park is out of your control based on those constraints. I imagine they largely align with weekends and holidays.

Obviously, the above example is for the general public, not the savvy consumer nor enthusiast. Even myself, for a regional park, would I necessarily take a random Wednesday off work to save a few bucks (and wait shorter lines)? I guess it depends, but I'd wager I'd just choose the most convenient date.

I know I’m not in the group they’re discussing, and I keep a SF & CF subscript…err…membership/season pass.

However, I like it at this point most of the time. As an enthusiast, I can plan trips around the cheaper prices. Granted, I’m single, no kids, work for the gubment so I get a lot of days off for vacay, so I’m super flexible.

I especially like it for skip the line at SF & CF parks. I know if it’s expensive and I decide to go anyway with my pass or membership to a park that I may as well pay for skip the line.

Last edited by Tekwardo,

Don't cry because it's over, smile because it happened.

I don't know how this adds to the mess, but in some ways theme parks are self correcting already. If the price on a particular day is too expensive for the demand, crowds will be low and the people that attended will get a lot done. If the price on a particular day is too cheap for the demand, the crowds will be high and the people that attend won't get much done at all (see: WDW during Xmas). Obviously the company can benefit by charging more instead of letting the park get crowded beyond tolerable (or having to turn people away at the gate, which is a lose-lose) but there is some aspect of a negative feedback loop already.

Last edited by ApolloAndy,

Hobbes: "What's the point of attaching a number to everything you do?"
Calvin: "If your numbers go up, it means you're having more fun."

From the article:

Reece said the study should be viewed in context, since some customers might not understand what dynamic pricing is or the different types of pricing strategies. They also might not know how they benefit from it.
“If you ask a customer what they want, they want something to be lower cost and higher quality, which doesn’t always make for a profitable business,” he said. “The parks need to provide a good experience.”

I agree with this. People see dynamic pricing all the time all around them and don't give it much thought. Point it out to them though and some people will complain about it. How its presented to people does matter (how the questions are asked in a survey does as well). Making it less about paying more for given dates and more about less for other dates will help with some people.

Higher prices will be charged on high demand dates. If you don't want to pay the higher price for peak demand days (such as weekends in the summer in seasonal parks), you can visit earlier in the year. But I really want to go when the weather is warmer, kids are off school, landscaping is in full bloom and on a weekend. Exactly.

As with any pricing decision, some people will balk. That's ok (at least if you have done your homework on your pricing decisions and your data/analysis is good).

Last edited by GoBucks89,

GoBucks89 said:

Making it less about paying more for given dates and more about less for other dates will help with some people.

And this is exactly the way it used to be presented - ten or fifteen years ago, you used to be able to bring a Coke can to Six Flags and get $20 off a weekday, or $10 off a Saturday, and it was perfectly obvious why that was the deal. And yeah, I guess it was a little annoying if the only day you could go was a Saturday, but the impression was you were still getting a discount.

Maybe on their websites they should just post "enter coupon code CHEAPO for $10 off weekday tickets" and people would feel happy about it.

hambone said:

And this is exactly the way it used to be presented - ten or fifteen years ago, you used to be able to bring a Coke can to Six Flags and get $20 off a weekday, or $10 off a Saturday, and it was perfectly obvious why that was the deal. And yeah, I guess it was a little annoying if the only day you could go was a Saturday, but the impression was you were still getting a discount.
Maybe on their websites they should just post "enter coupon code CHEAPO for $10 off weekday tickets" and people would feel happy about it.

This is the ticket. Consumers see the park as a static value and see perceived savings in getting a 'deal' this way. This becomes a double win with the park getting 'extra' revenue for those that aren't worried about the deal!

Guests will always be happier thinking that they're getting something free or at a discount.

$50 weekdays, $70 weekends is a big nope. $70 every day with a coupon to save $20 on weekdays = bargain!