For as long as I can remember, there has been intense discussion over the “right” admission pricing model in our industry. Should gate price maximize revenue, or should it be accessible to as many guests as possible? What is this experience worth?
Over the past month, and especially after the AZA Director’s Conference, there has been a lot of talk about the benefit of dynamic pricing. At the conference, the Indianapolis Zoo presented the results of their shift to this model, which has been in effect for almost a year. As advocates for data-backed decision making, this presentation was of particular interest to Zoo Advisors.
Dynamic Pricing 101
While it’s difficult to quickly summarize this model, I’ll give it a shot: there is no single “cost of admission” to Indianapolis Zoo. In general, (1) the earlier you buy and (2) the less demand there is to visit the zoo on your desired day, the less you’ll spend on admission.
But how exactly is that price determined? Via an algorithm, of course! An algorithm is, in essence, a procedure or formula for solving a problem. In this case, the problem is “how much should this ticket cost?” To arrive at an answer, the Zoo engaged a company called Digonex, which in turn took perhaps the most impressive dive into our industry’s data that has ever occurred. Without getting too far in the weeds, this involved a rigorous assessment of local and regional attractions, research on attitudes and expectations of Zoo visitors, analysis of historical attendance and weather patterns, and understanding the Zoo’s goals for attendance.
The results after implementing dynamic pricing were impressive:
- Substantial attendance growth overall
- A large shift from weekend visits (higher cost under new model) to weekday visits (lower cost) resulting in less crowds on weekends
- Large jump in total admissions per cap
- High guest satisfaction
- Growth in overall admission revenue
This is all great stuff, but the truth is that implementing a true dynamic pricing system like this one is not a reality for every zoo. It’s complicated, resource intensive, and requires investment in fairly sophisticated ticketing systems.
But, can it work for me?
So, what can other institutions take away from this? Perhaps a stripped down version of the dynamic pricing model is a consideration more zoos should be looking at. Going back to the AZA data, only 17 out 214 organizations report seasonal admission fees, which is sort of “entry level” dynamic pricing. Seasonal pricing exists more to encourage attendance in the low-season, but true dynamic pricing can shift attendance from over-crowded weekend to less-crowded weekdays.
Over-crowding is a real issue that zoos and aquariums of every size face. Even the smallest institutions can get uncomfortably busy on a nice Saturday during the spring. Big crowds detract from the visitor experience, which in turn diminishes the likelihood of a return visit. Could a zoo shift traffic to weekdays by offering higher weekend pricing? And could a rebalancing of attendance create a more positive guest experience, in turn leading to more repeat visits and higher revenues?
If I were contemplating this strategy, here’s how I’d begin to quantify the answers to those questions:
1. Implement an exit-survey to quantify the visit quality and likelihood of a return visit
2. Overlay those responses with daily attendance numbers to determine when visitor experience and likelihood of return decline
3. Begin to conduct some research and modeling on value of the experience and how pricing changes could affect daily visitor quantities
4. Use this data to create projections for a likely range of visitor and revenue patterns
5. Interested in hearing more about this? Drop us a line here.
Pricing…it’s more than a dollar figure.
Regardless of what you think of dynamic pricing, this raises a larger question – “Do you have a thoughtful and comprehensive pricing strategy?”
This is an intentional and strategic look at how pricing supports your organization’s goals:
- Balancing revenue and guest experience
- Providing accessibility to those who need it most
- Driving visitation during the right times, days, weeks, and months of the year
- Recognizing your value as a community asset and in many cases, the recipient of public support
- Assessing the connection between membership and gate pricing
- Understanding your place and price in the local and regional attraction market
Alas, Turnus was slain by Aeneas in gruesome fashion, but I’m pretty sure attendance at the battle was through the roof.
If you’re looking to be bold and want to take a closer look at pricing strategies and options, contact Zoo Advisors. We can help.