3 questions attractions visitors have about dynamic pricing
Dynamic pricing has been a common practice in the travel industry for ages. If the term doesn’t ring a bell it’s probably because you’ve never heard it before but you surely know what it refers to.
To put it simply, imagine you are planning your next trip and want to buy a plane ticket. You look at the prices and see that if you choose to fly during the weekend, the price for the ticket will be rather high, yet if you look at the rates for any day in the middle of the week, they are considerably lower.
The average customer in this case would assume that everyone wants to travel during the weekend since they are off work and have more time. And we all know that when the demand is high, so are the prices.
However, this is not yet the norm for the visitor attractions industry. And considering that people are fine with buying flights or hotel rooms at different fares each time, it left us wondering what their attitude to price variations at a visitor attraction would be?
This is why, together with Baker Richards, we went and got insights into the attitudes of visitors towards dynamic pricing in the attraction industry. Surveying 550 adults in the UK who plan to visit an attraction in the next 12 months. And based on our findings, we are here to answer some of the most common questions attraction visitors might have about dynamic pricing:
1. Dynamic what?
Most people are still not familiar with the term dynamic pricing. In fact, less than a quarter of the survey participants knew the term. Yet, when given an example such as the plane ticket prices we talked about earlier, they could easily recognise the practice.
Other industries such as theatres or supermarkets have also adopted real-time pricing based on demand for quite a while now. And again, when survey respondents were asked about it, they were unaware that they might have encountered price changes for such services before.
As you can see, most of them are used to paying different prices for services such as flights, and hotels, but not so much for buying tickets for visiting attractions, which brings us to the next point.
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2. Is Dynamic Pricing only about increasing fares?
Well, no. This change in price is not happening just so that attractions can earn more money, but so that they can optimise their operations and guarantee the best experience for their visitors.
There's a definite price sensitivity among attraction visitors. By conducting some experiments where we gave the respondents pricing variations based on different sets of factors, we could see that most of them would opt for the cheapest option in all cases.
It's all about getting the best deal.
Visitors agree that an attraction should lower its prices when the demand is lower, but are sceptical of a rise in price when there is high demand for that particular time period. From an operator’s point of view, there is no difference between the two scenarios, as high demand and a more crowded venue mean more preparations, but how can we explain that to the visitors?
3. What's in it for the visitor?
When implemented correctly Dynamic Pricing can improve visitor experience helping balancing visitor flow, broaden and diversify audiences with more price options and improve financial results for the venue. So why are visitors still sceptical about Dynamic pricing?
The answer is simple: they still need to be educated.
Robin Cantrill-Fenwick, Chief Executive, Baker Richards comments:
“By educating visitors into this way of thinking, destinations can manage capacity, increase visitor numbers and give guests a better experience by spreading visitor ingress. At a time when incomes are being hit across the board, dynamic pricing can arguably be fairer than a traditional concessions model, as it opens up lower prices to anyone who needs them - so long as they book early.”
Clear communication is essential to help people make a good choice and understand how to benefit from the variations in pricing. The first and crucial step is understanding your visitors.
Luckily, we did the hard work and we have put together all the findings of our research in partnership with Baker Richards. You can now get insights into how visitors understand and approve dynamic pricing depending on advance booking, threshold and capacity scarcity, discounts, and many more.
Are you ready to be part of the revolution in the Attractions Industry?
If you have any questions about the topic or wish to get started with dynamic pricing, get in touch with our team. We are here to help you reach your venue's full potential.