Dynamic pricing for attractions was a new innovation in 2014. To understand how it could be spread, we examined Diffusion of Innovation theory. We learned that there are five main factors that determine the rate of adoption of an innovation. All of them have come to pass in 2020.
Attractions around the world are working on modifying their operations in preparation for re-opening following the COVID-19 pandemic. Many changes will be required, to satisfy both government authorities and the ticket-buying public that it is safe to return. But there’s one change that attractions should consider making permanent to support long-term revenue management.
How does dynamic pricing work? Even for people familiar with the basic concept, the mechanics of generating price recommendations remain mysterious. How can a person understand dynamic pricing without a math, statistics, or economics background?
The human mind is wired to prefer avoiding loss over maximizing gain. For this reason dynamic pricing may feel like gambling to some. But static pricing has its risks as well.
Disney announced on February 27 that it was implementing “seasonal pricing” for its California and Florida theme parks. Or was it “surge pricing?” Maybe “variable pricing?” Perhaps it was “demand-based pricing.” It might have been “dynamic pricing.” We take a closer look at what Disney did and did not do with pricing.
Surge pricing may be necessary for Uber to manipulate its supply of independent-contractor drivers. But that’s not what all, or even most, dynamic pricing programs look like. There are many you don’t hear of, because there aren’t angry customers to write about!
Trusting an algorithm to make pricing decisions can be intimidating. But a recent study published by the University of Pennsylvania’s Wharton School shows that “algorithm aversion” is normal and can be overcome.
Dynamic pricing is a new enough innovation, made possible through modern technology, that even some pricing “experts” suffer from misconceptions about it. Learn four of the most common myths about dynamic pricing and why they shouldn’t prevent your attraction from changing with the times.