Tuesday, February 23, 2016

Tiered Pricing At Theme Parks

I've recently heard that Universal Studios theme park in California is going to start up tiered pricing for tickets into the park.  For those unfamiliar with this concept, it's basically how hotels and airlines work right now all over the world.  Rather than have a fixed price for admission into the park, Universal will change the price depending on the number of people expected to visit that day.  Notionally you'll pay more for a park when it's busy, and less when it's not.

This idea makes a lot of people nervous, and it makes me nervous too, however I think it makes me nervous for different reasons than most.  Most reactions online seem to be nervous about this because they worry that the parks will be too expensive during the times when they can visit.  Many people don't have the luxury of choosing when they can travel.  Either because of school or work schedules, many people must travel during certain periods of the year.  This is often the times when these theme parks will likely be at their highest prices.  So people assume that they won't be able to afford to go because the prices will push them out.

This is an logical reaction to this, however if you investigate this program at Universal you'll see that they'll have a ticket price cap.  This cap will likely be close to the current ticket price, with discount prices for slower days.  The parks are not going to price themselves out of existence, the goal is to get more people to come, not less.  This is not why I'm nervous about the idea of tiered ticket prices.

The reason I'm nervous come from theme park bonuses.  In recent years Disney has made it their goal to keep their parks busy all year long.  Their solution has been to offer extras during the slow seasons.  In some cases it's discounts such as the "free dining", but more often they offer things like the Food and Wine Festival, Star Wars Weekend, and Flower and Garden Festival.  Rather than discounting prices, they offer incentives, and some pretty great ones at that.

My fear is that with the addition of tiered pricing, Disney will stop offering incentives, such as food festivals, to bring people into the parks.  Likely the cheaper tickets will do this for them.  Already Star Wars Weekends have been cut, and free dinning has been modified.  Running these incentives can be expensive and require a lot of planning, lowering ticket prices is simple and cheaper in some cases.

Theme parks around the world are working to one up each other in order to get people into their parks.  This competition is good for the theme park goer, because it forces theme parks to up their game.  Tiered pricing is simple for the management yet adds nothing to the park experience.  It's a slippery slope to focus on lower prices instead of quality, if this keeps up high end theme parks will quickly go the way of the carnival.

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