Universal Studios Hollywood adopts dynamic pricing

Seems to me Universal would be able to charge a meaningful premium for at least the first summer that Potter Land California is open. Same is true for Disney and Star Wars Land.

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

I think what Gonch said as well as slither's comment about this not being their endgame hits the nail on the head. They've been getting people used to SOMETJING w/ discounts for slow days. Now they're introducing the term and a new website to buy. Eventually I guarantee they'll move the dial in price both ways.

joz said:

...haven't parks been doing this all along for years? Isn't annual passes with blackout dates a type of dynamic pricing?

Yes, and no. That is a type of dynamic pricing, but it's a primitive version of dynamic pricing. It's the 'painting on cave walls' version of dynamic pricing, so to speak. I think what Universal is doing is part of a process. Initially, offer customers varying prices on different days. Eventually, change those prices day by day, hour by hour, maybe even minute by minute. I'm sure Disney will follow. Followed by Cedar Fair and Six Flags.

That's kind of my point, they get to do dynamic pricing in a way that people that traditionally would get pissy about 'paying more' don't recognise it as dynamic pricing, they just think they're getting a deal. I totally get that it isn't the same as flat out changing the price though.

The other thing I was thinking; if you're Disney or Universal (in Orlando particularly, Hollywood not so much), isn't Dynamic pricing of the hotels (where people expect to see it) basically doing the job of changing the admission price too?

The reason I'm taking this side of the debate is because I can think of a couple of examples of parks that have had dynamic pricing, only to abandon it, so it just got me thinking if there was some psychological advantage in being 'sneaky' about it.

Orlando, I think, is a different critter than pretty much anywhere else (partially excepting DLR) and will be able to "get away" with more overt dynamic pricing.

joz said:

The other thing I was thinking; if you're Disney or Universal (in Orlando particularly, Hollywood not so much), isn't Dynamic pricing of the hotels (where people expect to see it) basically doing the job of changing the admission price too?

Yes. And its a better form of dynamic pricing from the park's perspective. People booking on-site hotels are likely to buy dining plans. Spend money at the resort. In addition to buying park tickets. People who are buying based on dynamic ticket pricing may stay and eat off-site.

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

What changed is the presentation. The website now gives them the ability to price each day differently, and the ability to change pricing for a particular day. We've seen discounts for weekdays or slow times before, but I don't think I've ever seen a random Tuesday, such as February 23rd, priced differently than the next day (Feb 24) or the next Tuesday (Mar 1).

I have to say I'm kind of on the fence about whether I think full-on dynamic pricing is a good idea. I think most people already know that a Saturday is usually going to be more crowded than a Tuesday. Don't people that have the option of avoiding Saturdays already visit on weekdays instead? Or is more incentive (cheaper prices) necessary to get people to change their visiting behavior?

Given the number of times I have to explain to people that $99 seats are better than $69 seats, I'll beg to differ on most people knowing Saturdays are busier than Tuesdays. There are a lot of people who Google whatever they're looking for and click on the first link without bothering to notice what website they're going to.

There are a lot of people who buy tickets for the day they want to see the show, regardless of the price. There's a woman in Cleveland with whom I spoke this week who bought tickets for the show; she didn't bother herself with reading what city she was buying tickets for and was surprised, after the fact, to learn she'd bought tickets to a show in Chicago and not in Cleveland.

Yeah, there's no such thing as common sense on the part of the general consumer when it comes to anything entertainment related. I've heard guests respond with "So?" after asking why its so busy during the Christmas season and being told "Every school in the country is out, and everyone thinks everyone else will stay at home with their family instead of going on vacation." People just can't seem to comprehend that when all the kids are out of school and/or all the parents don't have to work, everyone else besides them also go on vacation.

This is also why I don't think raising prices anything less than a truly ridiculous amount in one go would do much at all to influence attendance periods (especially peak). Not because that's the true value of the product, rather just because that's when people can go, period. Dynamic discounting (I like that term) like what you see with USH seems like a much more consumer friendly system that still can encourage higher spending even with "lower" ticket prices.

Why is the assumption that the true motivation behind this is to influence attendance behavior? I assume the true motivation is to squeeze more money out of people who have already demonstrated they're dumb enough/desperate enough to visit on a crowded summer Sat.

Assuming they get to the point of charging premiums for high demand days or substantially increasing base prices (above normal year to year price increases) and then discounting everything but the high demand days, its a win-win for the parks. You either get the same revenues with lower attendance (better park experience for all) or higher revenues with the same crowds. Its a "problem" most businesses can only dream about.

CBS This Morning Saturday just did a segment on this. Their segment guest, someone from Yahoo! Finance, said that the people willing to pay $95 for a ticket are always going to be willing to pay $95 a ticket and that the parks will be picking up business from price-sensitive customers.

If they book online they can go for $90. And get Potterland for less than they paid without Potterland two months ago. More interesting question to me is how many people are willing to pay $110 or $120 to be first to see Potter.

ApolloAndy said:

Why is the assumption that the true motivation behind this is to influence attendance behavior?

Other than making more money, what other motivation would there be? I don't know if they have the same issue as Disneyland, but there is such a thing as too many people wanting in.