Visitor Attractions: Tweak prices to capitalize on fear of missing out

School holidays in the UK and US in February can bring nasty surprises to families looking for a fun day out. Visitor attractions are coping with the double economic blow of lockdowns and damage from rising entry costs. As a result, they have increased gate prices sharply. They’re also tweaking their pricing formulas to encourage visitors to spend longer.

High and low season pricing is nothing new. Even more alarming to cash-strapped parents is the emergence of dynamic or “jumping” pricing at visitor attractions. This model, which aims to balance price and demand, has worked well for Uber’s ride-hailing service and Premier Inn’s budget UK hotel stays. The Indianapolis Zoo adopted dynamic pricing in his 2014.

Digonex, which creates pricing algorithms for entertainment and attraction companies, says dynamic pricing can boost first-year revenues by up to five times while still being affordable.

It can also infuriate your customers. According to a poll, more than two-thirds of his tourists oppose price increases during the peak season. Bruce Springsteen fans were outraged after being charged high ticket prices by Ticketmaster, the brand of US-listed Live Nation.

Another strategy is to raise the gate price and lower the annual fee. The latter is even higher, typically 3 to 5 times higher. Some attractions are trying to entice customers to pay for their membership by direct debit instead of one-off. Some of the subscribers are then automatically updated by inertia.

Membership terms can be controversial. Disney upset passholders by blocking access on a popular day. They tended to be locals who didn’t spend much at Disney hotels and restaurants.

Pricing visitor attractions can feel exploitative, especially for parents on a tight budget. Few unsubsidized venues would jeopardize the pay-what-you-can experiment attempted by the Battersea Arts Centre. Tickets start at £6, but visitors can pay less by arrangement.

Pay As You Stay Another approach. The Weserburg Museum of Modern Art in Bremen has tried this, charging visitors according to the time spent in the museum.

Attractions need to understand one simple truth when experimenting with pricing. The tradeoff is not just between price and volume. It also includes good intentions. Overcharging during peak hours can create some jackpots at the expense of lower recurring revenue.

The Lex team would love to hear more from our readers. Let us know what you think about the visitor attraction pricing in the comments section below. Visitor Attractions: Tweak prices to capitalize on fear of missing out

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