Variable-pricing plans increasing at theme parks

— If theme parks were airlines, the admission price to the Magic Kingdom would vary depending on how far in advance the ticket was bought, whether it was booked on a Tuesday or a Saturday, and if the visit happened to fall during the high-demand season around Christmas.

Though airfare-style pricing is catching on in other industries, many theme parks typically have offered it only for special events.

Now, the idea of boosting revenue using dynamic pricing and other kinds of variable-priced ticket systems is getting attention. This month, for example, the topic drew scores of park operators to a panel discussion in Orlando, Fla., during the annual meeting of the International Association of Amusement Parks and Attractions, the industry’s largest trade group.

“Day-of-the-week pricing, where you price cheaper during the week and more expensive on the weekends, is extremely uncommon. I think there’s a gold mine right there,” said Martin Lewison, an assistant professor at Farmingdale State College in New York who studies attraction pricing.

“More parks are using seasonal pricing — high season, low season, shoulder-seasons pricing,” Lewison said. “Remember, this is an industry that used to be, ‘Set it and forget it.’ The price was set for the season, and nobody thought about it again.”

Mark Danemann, founder of the pricing-software company Siriusware, said variable pricing is common in the ski industry, which uses multiday, midweek and low-season discounts to spread its customers more evenly throughout the season. He hasn’t noticed it as much in the theme-park business.

“But I think people are starting to pay attention to it,” he added.

While not all theme parks use variable-pricing systems for everyday admission, the approach does pop up in conjunction with certain special events and add-on services.

Walt Disney World, for example, uses a sliding scale for tickets to Mickey’s Very Merry Christmas Party, an after-hours event presented in the Magic Kingdom during the holiday season. An advance, adult ticket for a Thursday might cost $58.95, while the same ticket for a Friday might sell for $64.95. This year, the price for such a ticket will peak at $67.95 for the final party on Dec. 21. The company uses a similar structure for Mickey’s Not-So-Scary Halloween Party nights.

Universal Orlando charges less on quieter evenings for admission to its annual Halloween Horror Nights. This year, Florida residents were able to buy single-night tickets for Sundays, Wednesdays or Thursdays for $41.99 each. But on Fridays the price was $51.99, and on Saturdays it rose again, to $66.99.

Universal also uses a dynamic system to price its Universal Express, a supplemental, go-to-the-front-of-the-line pass good at many of its theme parks’ attractions.

“I think there was a lot of dialogue a couple years ago on whether consumers were willing to accept this,” said Scott Sanders, a former Walt Disney Parks and Resorts vice president who is now president of Integrated Insight Inc., a Central Florida consulting company.

“The jury is out, but I believe they’re starting to lean to the fact that, yes, (consumers) will,” Sanders told park operators at the amusement parks and attractions convention this month. “In general, consumers are willing to accept pricing as long as they perceive it to be fair.”

Sanders doesn’t think attractions need to follow the lead of airlines, whose pricing systems are too complicated.

He thinks Disney, his former employer, is doing a good job with its theme-park pricing, which is built around its Magic Your Way tickets. Though a one-day, two-day or three-day ticket costs the same throughout the year, the more days of admission that are bought, the less that is paid per day.

Neither Universal Orlando nor Disney Parks and Resorts would discuss their pricing strategies.

Theme-park consultant Dennis Speigel said he thinks the major parks are looking into airline-style pricing.

“The theme-park arena and world — which I’ve been in all my life — is slow to grasp and pick up on things like this,” he said. “But it’s coming. It’s going to happen.”

Information for this report was contributed by Dewayne Bevil of the Orlando Sentinel.

Business, Pages 72 on 12/09/2012

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