Friday, December 9, 2022

Convious partners with firm Baker Richards for research on dynamic pricing

Attraction management platform innovator Convious and market research experts Baker Richards have unveiled the results of research into consumer attitudes to dynamic pricing for visitor attractions. The companies are sharing these strategic insights into how pricing variations can be effectively used by destinations to give guests a better experience, increase sales and optimize attendance.

The research interviewed 550 adults in the U.K. who have been to a visitor attraction in the last 12 months and identified two groups, those who tend towards visiting leisure venues such as theme parks, waterparks and adventure playgrounds, and those prefer cultural destinations including museums, galleries and historic properties. 

Image courtesy of Convious.

The research revealed that dynamic pricing is not widely understood amongst the public, with less than a quarter of respondents having heard the term previously. However, when presented with examples of dynamically priced tickets 80% of respondents chose to buy there and then.

Andy Povey, Managing Director for U.K. and Ireland at Convious explains: “This fits with our experience in the real world — consumers like to get a deal and tend to purchase earlier when they are offered a lower price.”

One key finding was that price options, alongside scarcity and uncertainty, have the ability to change behavior. When presented with different prices by time of day, 42% of respondents said that they would choose to visit at a cheaper time. 

Povey states, “Again this fits with our real world experience. Attractions that use dynamic pricing to manage distribution of visitors through the week and even day report increases in income and guest satisfaction.”

A major outcome from the research is that clear communication is essential to help people make a good choice and understand how to benefit from the variations in pricing. 

“People generally accept that prices can be different at different times of day, days of the week, or month,” says Povey. Venues that focus on communicating why the price has changed rather than the different prices are not answering the question that the guest is asking.

When faced with some criteria for price variations, 68% don’t think it’s okay to increase prices when a destination is busier than usual, but 61% think it is ok to lower prices when it is less busy. Dynamic pricing is most effective when simple and transparent and doesn’t bombard people with too many options.

Povey comments: “Dynamic pricing has been a hot topic in the attractions industry for the past 5 years or so. It’s very easy to fall into the trap of assuming that ‘dynamic’ means ‘increased’ and while it’s true [that] dynamic pricing does allow increases to ticket prices that is not the largest benefit. When implemented correctly dynamic pricing can improve guest experience, broaden and diversify audiences and improve financial results for the venue.”

Robin Cantrill-Fenwick, Chief Executive, Baker Richards comments: “The research highlights something many attractions will recognize — there is intrinsic price sensitivity in the market because of the economic conditions. However, dynamic pricing is an increasingly popular tool which encourages visitors to book in advance, helping the attraction to predict and manage their costs, and providing a range of price points to the prospective visitor. The experience in other industries has been that so long as prospective visitors are aware that prices are fluid but fair, they accept the practice and adapt their behaviour to take advantage of savings.

“By educating visitors into this way of thinking, destinations can manage capacity, increase visitor numbers and give guests a better experience by spreading visitor ingress. At a time when incomes are being hit across the board, dynamic pricing can arguably be fairer than a traditional concessions model, as it opens up lower prices to anyone who needs them — so long as they book early.” 

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