Overview: Dynamic Pricing’s
Future in the Attractions Industry
IAAPA Expo 2012
Martin Lewison, Ph.D.
Asst. Professor, School of Business
Farmingdale State College
Revenue Management
• Dynamic Pricing is one aspect of a complete
revenue management program
• Revenue Management is selling the right
experience to the right guest at the right time
– Example: Discounted pre-season annual pass sales
– Example: Premium add-ons (queue products,
water park privileges, hard ticket special events)
Revenue Management
• The object is to sell your perishable “inventory” for
maximum revenue; Easier if you recognize that
different guests are more or less price sensitive
• It is possible to cater to both types, giving discounts
to price-sensitive guests and charging premiums to
less price-sensitive guests
• Of course, guests differ in more ways than just price
sensitivity, so it makes sense to segment the market
on multiple variables (Price-sensitive + heavy user =
Season Pass)
Dynamic Pricing
• Dynamic Pricing is pricing based on demand
and timing
• High demand, higher pricing, & vice versa.
• Consumers today are more comfortable with
the notion that prices can rise or fall with
demand, or can depend on peak or off-peak
periods. Dynamic pricing can be found:
– Tickets for sporting events, shows, concerts
– Parking meters and electricity consumption
– Online shopping
– Industries where dynamic pricing has long been
the standard: Airlines, hotels, auto rental
The Attractions Industry Already Uses
Dynamic Pricing on a Limited Basis
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Season Pass/Annual Pass
Twilight or Evening Discount Pricing
Weekday/Weekend Pricing
High/Low Season Pricing
Online Pricing
Special Event Pricing
Birthday Pricing
Dynamic Pricing Study
• We looked at websites for 74 parks/FECs in
Asia, 183 in Europe, 117 in North America
• Annual or seasonal pass pricing common in
U.S. and Europe (68% sample in North
America, 69% Europe, 33% Asia)
• Online Advance Purchase Discount Less
Common (36% sample North America, 35%
Europe, 7% Asia)
• Day of the Week Pricing Uncommon (15%
sample North America, 5% Europe, 7% Asia)
Guest Attitudes Toward Pricing
• We collected 476 online surveys from several
global theme park forums (53% North
America, 33% Europe, 14% Asia+other)
• 32-43% (North American respondents)
expressed willingness to pay higher admission
on busier/busiest days, higher for Europe and
Asia (95% confidence interval)
• 83-91% (NA respondents) expressed
willingness to adjust day of visit to capture a
discount, lower for Europe and Asia (95%
confidence interval)
The Future: Know Your Guest
• Understanding your guests’ experience
preferences (thrills, shows, landscaping,
games), F&B preferences, merchandise
preferences, etc., along with their sensitivities
with regard to changes in price opens the door
to mass customization of the amusement park
experience
• More parks/FECs are starting to collect more
guest information through interactive
marketing on social media
The Future: Know Your Guest
• There is no perfect amusement park for all
guests, but there are variations in the
marketing mix that are perfect for different
segments of guest.
• Survey and test to find out what your guests
want
• Invest in research and analytics and mine your
data
• Develop loyalty programs -beyond the season
pass model- that form long term relationships.