99-Variable Pricing to Shift Demand and Increase Revenues

One of our local snow ski areas has started offering a “no wait” pass for snow skiers on busy days. The pass costs $20. This $20 comes on top of the normal day pass the skier has purchased. This additional pass allows the skier to avoid lift lines by going through the “ski school” entry. Other ski areas have begun charging substantial fees for “close-in” valet parking, while letting most skiers park for free at a further distance from the lift lines.

This variable pricing both reduces demand pressures on some services and increases revenues. These variable price mechanisms have become much more common over the last few years. We see them in airlines, at hotels, sporting events, movies and plays and other venues.

Now the concept has come to art museums. Some years ago, some of the largest art museums in the country learned that it could charge substantial admission fees for special shows. Now some museums are bringing the variable pricing concept to day-to-day operations. Some museums are considering charging a premium for the first hour of every day and on weekends when demand is greater than at other times. Others have noted that special exhibitions become more crowded as an exhibition comes to its end. So, these museums are considering increasing prices as the end of the special exhibition nears. Others are considering charging a fee for those museum-goers who purchase their tickets online in order to avoid lines.

Really, not bad ideas when you consider that many of these museums are under severe financial pressures these days due to the poor economy and falling attendance. And, across-the-board price increases are likely to drive even more patrons away. These, and many other pricing concepts, are available to help you develop your new pricing ideas. Please see the many brainstorming pricing ideas at www.strategystreet.com/improve/pricing.

Posted 5/11/09

Update:

Most large ski areas today in 2022  belong to one of the major season ticket groups, which include many other ski areas. The price for these season passes allows the skier to breakeven after five days or so of skiing at his home ski area, with a few blackout days. These major ski areas no longer seem to need to offer special pricing for high demand periods.

Most museums continue to charge premiums for special exhibits.  These extra charges might also bring somewhat higher prices for special entry times as well.  Before Covid, many museums had already moved from an admission price concept of “pay as you wish” to firm admission prices.

As the Covid pandemic forced museums into lockdown, several institutions tried to supplement lost income by selling tickets to experience their exhibitions online.  Visitors to the Louvre’s and British museum’s websites grew dramatically.

THE SOURCES FOR STRATEGYSTREET.COM: For over 30 years we observed the evolution of more than 100 industries, many hostile.  We put their facts into frameworks applicable to all industries and found patterns.  Strategystreet.com describes the inductive results of these thousands of observations and their patterns.