The most expensive seats in the house are those that go unfilled. I learned this valuable concept during my time as Senior Box Office Manager for the Luxor Hotel in Las Vegas. At each of our live production shows, we strove to fill every seat in the house--every night. To that end, we believed that it was better to fill a seat with an unpaid guest than to allow it to go empty. Why?
Perception Is Reality.
If a show appears to be selling out from the beginning, eventually it really will sell out. We wanted each of our shows--Blue Man Group, Carrot Top, Fantasy--to be viewed by the paying general public as wildly successful. Of course, quality of performance is an essential ingredient to any show's success. Beyond that, it comes down to how well a show is marketed and how well the box office team manages the house.
But Las Vegas shows aren't the only application for such a strategy. The same concepts work in any commodity-based endeavor. Whether you're booking kayaks at Brevard Zoo, Lemur encounters at Jungle Island, or on-board tours of a German submarine in Chicago, these concepts can help you to grow revenue and maximize capacity. Here are six revenue strategies that you can use to manage inventory-based experiences:
Advance Bookings. Offer discounted rates for tickets that are booked in advance. Just like the airlines do, you can limit the number of slots available at the advance booking rate. See Southwest Airlines and their Wanna Get Away fare as a great example of how this is done.
Third-Party Bookings. Allow third-party resellers to offer packages that are inclusive of your inventory-based experiences. In many cases, you can require that participants call to book their specific time-slot. You can drive these bookings to a specific time of the day or even a specific day of the week. You might even require 7-day notice in order to better manage your inventory. Companies like Expedia and Travelocity will showcase your add-on experience and require guests to book from an availability-based calendar.
Annual Pass Inclusions. Bundle a voucher for one or more of your inventory-based experiences as an annual pass inclusion. When these vouchers are redeemed, you can limit the conditions of redemption. As an example, Universal Orlando offers a Premier Annual Pass that includes one Off-Peak Halloween Horror Nights ticket which is only redeemable on select nights of this fall classic.
Seasonal Pricing. Set your pricing schedule based on the day of the week, month, or season. This can be the actual pricing that is posted online and at your box office. Then, you can make last-minute, unpublished adjustments, up or down, based on inventory. The Walt Disney Company has moved to a seasonal pricing model for its one-day admission tickets to their four Orlando theme parks.
Dynamic Pricing. Similar to Seasonal Pricing, Dynamic Pricing is 'real-time' pricing. This method requires virtually your entire pricing model to be automated, making adjustments to prices on the fly and in response to market demands. SeaWorld's Discovery Cove prices their interactive experiences using a dynamic pricing model.
Papering the Room. At Luxor, we often used 'papering the room' as a way to put unpaid butts in the seats on slower nights. Here was the process: on the night before the scheduled performance, we would make a decision to 'paper the show'. Next, we would contact one or more of our third-party resellers who would, in turn, offer these seats to their call center team, concierge agents, and marketing representatives. This way, the seats were filled and the people filling them were people who we hoped would become evangelists of the show in their own workplaces and to engage with future guests of our shows. It was a WIN-WIN.
Have a great week!
Monday Morning with Marty will return on January 9, 2017. See you then!
"Pricing is the exchange rate you put on all the tangible and intangible aspects of your business. Value for cash."
-- Patrick Campbell