What does success look like for a theme park operator? For starters, it might not be enough that attendance continues to rise, or that fresh attractions are drawing even more visitors to the park.
Instead, the question that some theme park operators are asking themselves is, how can we continue to grow revenue organically while balancing the potential impact of rising prices on our customers?
To answer this question, theme parks need to leverage data-driven analytics – which have the potential to uncover fresh insights and targeted pricing opportunities for tickets and food products.
By executing sophisticated Revenue Management modeling techniques, theme parks can measure individual product price sensitivity at discrete price points, and produce heat maps illustrating precisely when/where prices were too high and where opportunities existed for further increases. These price sensitivity findings – combined with strategic pricing rules – can yield tactical price recommendations for market testing.
In addition, leveraging mathematical models to predict customer purchase share among substitutable items can uncover insights that can help theme park operators change the way they conduct business. By doing so, they can identify specific price recommendations to correct situations where current price differentials between substitutable items are driving suboptimal customer tradeoff behavior, (i.e., customers were trading up or down to a less profitable item).
Once the analytics are in place it is critical to establish a process for conducting market tests. Planning, executing and measuring market price tests is essential to continually improve the price recommendations and deliver sustainable results.
For one theme park owner, putting this kind of pricing program into action yielded 6.8 percent organic revenue growth in a market test of new prices. Due to this success, the company urged immediate rollout of the recommendations, and is planning to develop systematic, ongoing Revenue Management capabilities.