RE: BGW Christmas Town 2013
In most of the discussion of ticket and pass pricing strategies I've seen, both in this thread and in previous ones, people seem to be lacking understanding of some basic principles of economics. The one which is most applicable, and which provides the most insight into the pricing decisions I've seen the park make is elasticity. Specifically, elasticity of demand. For a decent explanation,
see here.
When a business knows the price elasticity of its product, they can make intelligent decisions regarding pricing to maximize revenue. To do this requires data. This data is something BGW possesses, and we do not. Based on their actions, it's not hard to make some deductions.
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Cost of the product is relatively fixed. Once plans for Christmas Town are finalized (number of shows, amount of decorations, operating schedule) the cost may vary a bit (maybe 10-20%), but it's pretty much set.
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Maximum revenue is earned with full park capacity on every operating day. Best scenario is that every guest pays for full price tickets, and spends lots of money in the park on food and other merch. Anything less than this is money left on the table.
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Not every guest pays the same entry price. This is pretty self evident.
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Pricing over time can be manipulated to maximize revenue. Doing so requires an understanding of the price elasticity of your product (which BGW does). Assuming that CT at BGW is a very price elastic product, small changes in price should result in large changes in attendance. Also realize that even if admission were completely free for some people, having those people in the park is better for revenue, as some percentage will buy food and merch.
A simple pricing strategy, would be to start offering tickets at high prices. Wait some time until everyone who will pay for admission at that price has time to do so, then drop the price a little bit. This is a bit of a head game with your customers. If you tell them that there be discounts later, they won't buy at the higher prices. You need to make them believe that the price RIGHT NOW is the best deal they can get. You can do this by making the price discounts "limited time offers". Most people are psychologically programmed to respond to this type of offer, regardless of past history.
So, what can you expect for this CT season? My prediction is that the price will continue to drop as the season progresses. I expect BGW knows that there is an attendance spike at the beginning and at the end of the season, with a dip in the middle. That dip represents money left on the table. The smart thing to do is to offer steep discounts targeted for those dates, to get people through the gates who would not attend at the original high prices. Even if the price was trivial (say $5), and those people are getting in for far less than those who paid full price, food and merch revenue goes up on those days.
Yes, some vocal people will be upset that others paid less for their tickets. But it's not like those are lost customers. After all, they observed the variable pricing strategies from previous years and didn't learn. If they haven't learned from past experience, how seriously do you need to take their current complaints? Not much. "But it's not fair!" they will say. Well, if they weren't willing to pay that price for the product, they shouldn't have done so. The fact that others got a better deal than they did really shouldn't matter. See the
Parable of the Workers in the Vineyard.
