Study finds theme park fans are wary of ‘dynamic’ ticket pricing
This holiday season, tourists will pay even more of a premium to enter theme parks during peak times.
The attractions are increasingly employing what’s known as “dynamic pricing,” a business strategy to manage revenue and crowds by charging more when demand is highest.
Guests wanting to bypass holiday lines can also expect to spend more for datebased, skip-the-line passes, such as Universal’s Express Pass and SeaWorld’s Quick Queue. Many visiting Walt Disney World will likely pay for the recently debuted Disney Genie+, which charges a flat rate for most rides but replaces a service that used to be free.
But what do consumers think of pricing that could make vacations more expensive?
A study published last month by researchers Ady Milman and Asli Tasci at the University of Central Florida and student Gaurav Panse at the University of Waterloo in Canada surveyed parkgoers’ feelings toward dynamic pricing.
It found consumers don’t like it, especially when it means they know they paid more than others.
Their findings showed visitors might be willing to pay slightly more for tickets if they know their money goes toward charitable or sustainability efforts at the parks, such as providing recyclable food containers or utensils or investing in conservation.
“They don’t want fluctuation, but if there is one, they want to be on the better end of the deal,” Tasci said. “Companies can be a little strategic and smart about this if they want to charge consumers a little more for the sake of providing them more sustainable practices or helping charitable causes.”
Studies on dynamic pricing and consumer behavior aren’t new, but the researchers said theirs is the first study to focus on its effects on theme parks.
Dynamic pricing in context
Evan Reece, CEO of attractions pricing company Catalate Commerce, said dynamic pricing is commonly used in the broader travel industry and has gained popularity in the attractions world because of the pandemic.
The vast majority of major theme parks now use a form of variable or dynamic pricing, Reece said. The study noted admissions can generate between 49% and 60% of theme parks’ overall earnings.
The prices for single-day tickets for Disney, Universal and SeaWorld vary by date, and the price a customer pays depends on the length of their stay and the number of parks they want to visit, among other factors.
In the study, researchers surveyed people who attended a theme park within the last year and measured their responses to questions about hypothetical pricing scenarios and their effect on trust, value and brand loyalty.
Not surprisingly, people who pay less are also more likely to revisit theme parks and recommend them to others than customers who pay more, it concluded.
At the same time, the study recognized dynamic pricing is often justified to control crowds at peak times and ensure a better visitor experience.
Disney, which continues to operate with capacity measures and requires park reservations for entry, recently stopped selling most annual passes in an apparent effort to help control demand and crowds.
Reece said the study should be viewed in context, since some customers might not understand what dynamic pricing is or the different types of pricing strategies. They also might not know how they benefit from it.
“If you ask a customer what they want, they want something to be lower cost and higher quality, which doesn’t always make for a profitable business,” he said. “The parks need to provide a good experience.”
The revenue from dynamic pricing can also benefit guests by funding parks’ upkeep and new attractions, the study noted.
Explain it or try to hide it
Theme park executives are likely aware of these guarded guest perceptions of dynamic pricing, researchers said.
They recommended park decision-makers either thoroughly explain the reasons behind ticket pricing to customers or keep their strategies secret to avoid visitor perceptions of unfairness. But the second option isn’t really practical, Tasci said.
“There’s social media, somebody finds out, and boom, it’s all over the internet,” Tasci said. “Secrecy is really hard to manage, so a better strategy is being clear and thorough in explaining [to] consumers why there’s a difference in prices.”
Reece similarly recommends businesses be open with customers about pricing and consistent in their messaging.
“If you’re transparent with them, it snowballs a bit because they educate other customers about how it works,” he said. “And from our perspective, since this is relatively new, the industry has an opportunity to establish a norm with transparency and trust-building in mind.”
The researchers suggested theme parks should explore pricing strategies other than daily or weekly dynamic pricing, such as reducing prices based on guests’ arrival times and length of stay. They said businesses could also advertise their sustainability and charity efforts within the ticketing process to gain consumer’s loyalty and trust.
Some companies, like Disney and SeaWorld, market their charitable contributions and eco-friendly efforts, but customers aren’t clearly shown at the ticketing stage how their purchase contributes, Tasci said.
For example, SeaWorld runs one of the largest manatee rescue and rehabilitation programs in the United States and educates guests at the park’s Manatee Rehabilitation Area how to protect the mammals during what has become their deadliest year on record.
Tasci recommended parks include messaging at checkout or on attendee’s physical tickets, thanking them for their contributions to help them feel more involved. Reece added that researchers and consumers should also consider that
theme parks and resorts make ticketing decisions in accordance with other sources of revenue.
“There may be some things that look irrational in terms of core ticketing strategy that have more to do with full park revenue strategy,” he said.