Universal Studios Hollywood adopts dynamic pricing

Posted | Contributed by Jeff

Universal Studios Hollywood is anticipating huge crowds for the April 7 opening of the Wizarding World of Harry Potter. If you want to be one of the first to experience it, be prepared to pay more than if you want to go, say, on a slow Tuesday in September. So-called demand, or variable, pricing is nothing new to airlines and hotels.

Read more from The LA Times.

Lord Gonchar's avatar

Here it comes.

The article doesn't really say anything the good experts here at CasterBuzz haven't considered over the years.

High Five!

slithernoggin's avatar

We need to monetize this :-)

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Life is something that happens when you can't get to sleep.
--Fran Lebowitz

Still looks like its a discount for certain times rather than a premium for others. Will be interesting to see if they go with straight out premiums for peak times or simply increase normal/every day price more but continue to discount off that for off-peak times.

slithernoggin's avatar

I'd say it's more likely an easier sell to say "You are a smart consumer getting a discount by choosing this day!" than "If you want to come this day so badly you get to pay us extra money!" (so to speak).

Dynamic pricing, really, isn't selecting a price and then discounting it, it's more determining what the maximum price that can be charged with the least pushback by consumers for each individual performance/theme park day/etc. How those prices are promoted are a different part of the process.

Life is something that happens when you can't get to sleep.
--Fran Lebowitz

I agree that discounting will appeal to more people. You can double your price and provide a discount of 25% and people will love it because its "on sale" even though they are paying more than they were before the price increase/discount.

But it seems to me that to truly get the benefit of dynamic pricing, you need to increase prices faster than you otherwise would. Otherwise its just discounting in off-peak times which isn't a new concept for really anyone. And those increased prices will be negative PR (even though only peak customers will pay them). Just because "prices skyrocketed" even though few are paying the skyrocketed prices.

People aren't rational like that.

slithernoggin's avatar

Back in the day I worked for the evil empire of the ticket-selling world. Probably shouldn't say the name outright on social media, but it rhymes with ThicketBlaster :-)

Anyways. Their dynamic pricing model allows venues to have quite literally hundreds of price tables, which can be easily changed with a few clicks by venue management. For example, your venue could have price tables offering tickets at $51, $63, $75, $87, $99 or $114.13. Based on sales, you can move up or down that range in real time.

Short story long, I suspect that Uni Hollywood is easing the public into the dynamic pricing model by initially presenting it as an either/or proposition with an end goal of being able to adjust prices quickly up or down on a day-by-day basis.

Life is something that happens when you can't get to sleep.
--Fran Lebowitz

janfrederick's avatar

I'm good with this. Good idea to spin it as a discount for certain days...

"I go out at 3 o' clock for a quart of milk and come home to my son treating his body like an amusement park!" - Estelle Costanza
Lord Gonchar's avatar

The article specifically says, "So far, Universal isn't increasing its maximum price, although park officials didn't rule out such a move in the future."

So it's baby steps. Get people used to the dynamic pricing. Then optimize it in both directions.

I think people are going to be in for quite a surprise the first time they visit Universal's ticket purchasing site. It really is unlike anything I've ever seen for a theme park, as it looks much more similar to how airline ticket prices are presented. The options presented on the left side are also interesting, especially the "Front of Line with 1-Day admission" option, which ranges in price from $149 to $239 depending on the demand forecast.

slithernoggin's avatar


For sophisticated theme park guests, I think it will be surprising. For the rather large majority of guests, on the other hand, no.

Today alone at work, I spoke with someone who bought tickets to Blue Man but never thought to read what city she was buying tickets for (and she didn't live in the city she'd bought tickets for), someone who thought that selecting "1" for the number of tickets he was buying meant he was buying 2, and someone who didn't realize that when they were told, while buying their tickets, that there are no refunds or exchanges, meant that there are no refunds or exchanges.

There are an admittedly small number of customers, like those noted above, who shouldn't be buying things on the Internet without supervision. Based on my experience, there's a large percentage of the population that simply doesn't pay that much attention when buying things online. For all these folks, Universal Hollywood's ticket buying site will simply be another place on the Internet to click through without paying much attention.

Life is something that happens when you can't get to sleep.
--Fran Lebowitz

I understand the concept of dynamic pricing (at its core its pretty simple). And I agree that we will see more of it moving forward in pretty much everything. I just don't really see what Universal is doing here as an example of it. Or being something that hasn't been happening with theme parks and other industries for a while now in some capacity or another. So all folks are getting used to is the label dynamic pricing.

slithernoggin's avatar

I think you're viewing what Universal is doing as their end game. I see it as the opening gambit in getting their customer base used to constantly changing prices for admission.

Life is something that happens when you can't get to sleep.
--Fran Lebowitz

rollergator's avatar

In some version of reality, you're paying a premium twice to go on a busy Summer Saturday.

First, it's super-crowded with long lines, etc. Second, the price for that day is higher than on a slower day.

Seriously, you need a more flexible schedule... ;~P

You still have Zoidberg.... You ALL have Zoidberg! (V) (;,,;) (V)

I am not viewing what they are doing as an end game at all. Maybe its just semantics. We all seem to agree that dynamic pricing is in theme park's future. You all seem to think its here and will continue to ramp up. I think they are still just talking about it and will get there eventually.

Seems to me Disney and Universal want to go to dynamic pricing and they both believe it makes sense to do so (and I agree with them). But they just seem hesitant to actually pull the trigger on it. Almost like they are both saying to each other they think its a great idea and are totally on board with it. You go first.

If they go the route of different prices for different times of year based on expected attendance, I guess I don't mind that too much. However, if they go the route of the airlines, where the same ticket can cost twice as much one day as the next, that I would be a bit annoyed with. The park operators have a very good idea what the attendance will be on a given day, so maybe they will just use it to disperse the crowds over the year.

slithernoggin's avatar

I think the airlines and theme parks have different goals. Airlines make no money on an empty seat, but still have to move that empty seat from one place to another; in the end, they want to sell every possible seat at whatever price will fill the seat.* They're using dynamic pricing to minimize unused inventory.

Og said:

The park operators have a very good idea what the attendance will be on a given day...

I agree: parks will be using dynamic pricing to manage attendance.

*Oversimplifying? Yes. Also: hotels and rental car companies are doing the same thing.

Life is something that happens when you can't get to sleep.
--Fran Lebowitz

I'm totally down with dynamic pricing, makes sense to me to try and get attendances up in the slow periods by discounting and having it priced high when it's going to be busy to maximise returns.

My question is, haven't parks been doing this all along for years? Isn't annual passes with blackout dates a type of dynamic pricing? Disney do specials during their increasingly short off season, and in Australia (where I'm from and have better knowledge of) parks routinely put out discounts on McDonald cups, on the back of supermarket recipets, and in tourist guide books, always with an expiry date before the next busy period.

I do feel that this sort of 'in stone' dynamic pricing might not be as ideal. For one when people find a cheap theme park ticket with their Coke, it instantly puts the idea of the park in their head, complete with a deadline and incentive. It also gives the park an incentive to make sure they're getting their brand out there in a cheap way to a massive amount of people.

For two people will see off peak pricing and be slightly butthurt by the idea that they're paying more than someone who can take time off whenever. But doing it the way it's always been done people who go off peak think they're getting a deal, and people who go during peak time get the warm fuzzies in the knowledge that 'Unlike those EVIL airlines and hotels, theme parks don't get more expensive!'

Like I say, I think dynamic pricing is fine, I'm totally for it! But I'm just wondering if it's better to do it in a backhanded kind of way?

Joz - Power, in tune with nature!
Lord Gonchar's avatar

Simply discounting slow times is not dynamic pricing in my eyes. (although I suppose it technically is)

When I think dynamic pricing I think the examples that have been mentioned - hotels, airlines, car rentals. Things that are set based on demand and then fluctuate constantly as that demand peaks and wanes.

Jeff's avatar

Honestly, if they're not pricing up and down, I don't really see how this is a change beyond promotional discounting.

Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

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