Posted Monday, November 19, 2012 10:32 AM | Contributed by Jeff
The idea of boosting revenue with dynamic pricing and other types of variable-ticket systems has been getting some attention with theme parks. Last week, for example, the topic drew scores of park operators to a panel discussion in Orlando during the annual meeting of the International Association of Amusement Parks and Attractions, the industry's largest trade group.
Read more from The Orlando Sentinel.
We started discussing this before the turn of the millennium. Hard to believe it's taking as long as it has for the idea to go mainstream, esp. considering that some parks have been doing this for special events for quite some time.
Now, how long until we start seeing higher prices for weekend admissions?
Lance at screamscape was not happy with this. I think it's great. It likely won't affect season passes, though I could see different tiers of those, like Disney, with blackout dates coming as well.
Don't cry because it's over, smile because it happened.
Amazing how many things we discuss in depth around here eventually come to fruition within the industry.
In terms of the business side of the amusement industry, I don't think you'll find an enthusiast forum more knowledgable or insightful than our little group.
(consider our horn tooted)
The more I think of it, the more I can't believe we haven't already gotten to this point already, especially in the bigger resort parks. We already see this pricing in airlines, hotels, restaurants, ski resorts, and even major league baseball games as well as many more entertainment places.
Perhaps a dynamic pricing system will also do a better job spreading out the crowds. Season passes contributed to this at the park I work at, but there is still a great contrast between weekdays and weekends. I know Saturdays will always take the cake as the busiest day, but incentivising weekday/early-season visits when the park is less hectic could increase guest satisfaction overall. From a business standpoint, higher guest statisfaction=more repeat visits=more money for flashy new rides.Last edited by AJFelice, Monday, November 19, 2012 12:28 PM
When it comes to regional parks, I don't think a weekend price increase would shift attendance patterns significantly, primarily because many people have to visit on weekends because of their work schedule. If you literally cannot afford to take a day off from work (say for example you don't receive paid days off), and the cost to visit on a weekend is even higher, it's going to be more difficult to make it work. If anything I think increasing the price on weekends would just deter some low to medium income families from going at all.
The problem I have with this idea on a customer service basis is that you have people paying more for peak days, which means there is a lower level of access than on a non-peak day. I don't think this is directly comparable to flying or getting a hotel room because the product you are receiving (a seat on a plane for example) is independent of the demand for that seat. The only way I could get behind higher priced weekend tickets is if the park was also willing to limit the number of people admitted into the park in order to preserve the experience (aka perceived value).
Disney sort of does this already if you view the Florida property at a place you stay. Consistently, the variation in cost and discounting is placed on the rooms while the admission and meal plans are pretty much inflexible. For our upcoming trip, Disney wasn't really even on the radar until we got a mailer that promised 30% off during specific weeks. Not only did this get us to commit, but we even opted to stay at a deluxe resort. But try to go the week of Christmas, and you'll pay the top rate for sure.
Sure, all hotels do this, but when that's such a key component of your revenue, and ability to keep people locked in on the property, it's an important aspect of their overall pricing.
Agreed that the most interesting story would be to see this at a regional park. We've already seen it in play with higher prices during Halloween events.
This is such a no brainer. If you're filled to a point that your guest satisfaction suffers, you're leaving money on the table. You could either increase the price AND guest satisfaction - basically it cost 10% more to go on a weekend, but there will be 10% less guests (which may be a wash for value, but you'll get more money in your pocket) - or you can incentive going on a weekday and have the same amount of cash, but higher guest satisfaction - it costs 5% more to go on a weekend and 10% less to go on a weekday (everyone is happy because the weekenders have less crowds and the weekdayers get a big discount). Either way, I can't believe how long parks have been overrun by crowds on Saturday, ghost towns on Monday, and been okay with it.
Is there something I'm not seeing (like staff availability during the week or something)?Last edited by ApolloAndy, Monday, November 19, 2012 3:49 PM
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."
The White Sox have given Dynamic Pricing a try for the past year or two. The results have been crappy, and they're doing away with it for the most part in 2013. This past season- in what was supposed to be a rebuilding year with low expectations, they held on to 1st place in their division for 120+ games. Typically when that happens, you see ticket prices go up the following year. Instead, they're slashing tickets and parking significantly. In a conference call for ticketholders, the head of marketing blamed a lot of it on Dynamic Pricing without actually saying as much.
The trick was to surrender to the flow.
Isn't it interesting about how we set our expectations? For health care, we can't really shop and have no idea what anything will cost up front. For airfare, we make our best guess about when the best deal can be had. For amusement parks, we likely want to know the cost at least somewhat well in advance. For a movie, if you don't have the prices consistent (matinee vs. evening), forget it.
Some parks like Morey's have been doing this for years and it seems to work well. A wristband is around $50 but if you are willing to go to the piers on a Tuesday during the day (when most people are on the beach), you can get a wristband good from 12 - 6 for $20. Even with such a big discount, it didn't seem to increase crowds that much any of the years I have gone to Morey's (except for once over Memorial Day weekend, I always go on a Tuesday for the wristband deal). The coasters are at most a 2 - 3 train wait during that time.Last edited by YoshiFan, Monday, November 19, 2012 11:06 PM
As someone who likes to visit parks in the shoulder season anyways, I would benefit from a price structure like this. However, I don't care either way, because while I like the idea of using it to help spread out the crowds, the price would have to be pretty drastic either way to really work, in my opinion.
...or you can incentive going on a weekday and have the same amount of cash, but higher guest satisfaction...
Exactly. I've not been paying a lot of attention, but it seems that's sort of how many parks are doing it already, although it's mostly been by advertising special offers through social media. From a customer satisfaction standpoint, I think it makes a lot more sense to advertise your highest price and then discount from there. I think you risk pissing a lot of people off if you make it obvious that they're paying $x more to visit on a weekend, but you'll make a lot of people happy if you tell them they'll save $x visiting at a slower time.
And then one day you find ten years have got behind you
No one told you when to run, you missed the starting gun
Lord Gonchar said:
...Dynamic Pricing has been a success for the Giants...
While I have no doubt that dynamic pricing works, it's somewhat disingenuous to use the Giants' first World Series-winning season in 56 years as an example.
According to Forbes, Giants' revenue increased 2.6% in 2010. However, the team also played 8.5% more home games in 2010 as compared to 2009 (when they didn't make the playoffs). All of those games were the of the ultra-lucrative playoff game variety.Last edited by djDaemon, Tuesday, November 20, 2012 6:35 AM
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You got the point and understand that it works. Don't cherry pick one link and scrutinize it. If it demonstrates a truth does it matter if it's an anomoly? You're not even arguing my point, you're arguing how I presented it.
I used that as the example because they were the first team and 2010 was the first year they did it stadium-wide. It was a lot of the basis for everyone else really jumping on board. They're still using it in 2013 if that's any indication of it's success.
And then there's the other article I linked to in that post.
And the Cubs had success with it so dynamic pricing in Chicago doesn't seem to be the problem as much as the White Sox fan base.
I could link articles all day. Do any number of google searches with some combination of "MLB, baseball, dynamic pricing and/or various team names" and you'll find plenty of coverage. But you knew that.
The point is, that for MLB dynamic pricing seems to have been a huge success with more teams jumping on each year. It was interesting to me that the White Sox were supposedly blaming it. It's clearly working for the rest of MLB.Last edited by Lord Gonchar, Tuesday, November 20, 2012 1:22 PM
Although the Mets suck, they've been doing that (dynamic pricing AND sucking) since the Shea Stadium days....i.e, weekend games cost more, games vs. Braves are more expensive than a Wednesday night against the Pirates, etc.
The amusement park rises bold and stark..kids are huddled on the beach in a mist
Lord Gonchar said:
You got the point and understand that it works. Don't cherry pick one link and scrutinize it. If it demonstrates a truth does it matter if it's an anomoly?
No, you're right - I agree that the system works. I just was puzzled by that example, since it doesn't demonstrate a truth. The team had 8.5% more home games, and only 2.6% more revenue to show for it. Taken at face value, isn't that a testament against the system's success?
Obviously the team has more data, so I have no doubt about their belief in the system. And again, I'm not arguing the point (or your presentation thereof), I just thought it was strange.
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