Dynamic Pricing, a Solution For Theme Parks?

26 October, 2015
  • 2 min read
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Disney recently announced an intent to implement Off-Peak prices, to reduce congestion and raise attendance at slower times. Demand-based pricing is one of the core concepts of Revenue Management.

As theme park expert and former Hotelschool The Hague lecturer Martin Lewison - currently a professor at Farmingdale State College in New York - explains to the LA Times "Disney has a problem with excess demand. The park has a limited capacity. They have to close the gates on busy days. Nobody wants to do that." The efforts to spread out the attendance could ease frustration from regular visitors about long lines and shoulder-to-shoulder crowds, as Lewison explains: "When you get into the park and it's wall-to-wall people, it really degrades the guest experience. You want to push off the crowds to the non-peak days."

Unlike in the US, Disneyland Paris already uses these principles by offering cheaper tickets for restricted dates.

Revenue Management, also known as Yield Management, is a process for capacity-constrained industries to maximise profitability by allocating the right inventory to the right customers at the right price. Airline Industries, Hotels, Television Broadcasters, Theaters, Car Rental Agencies, Hospitals, Telecommunications are only some of the industries where RM techniques have been successfully utilised. The field of Revenue Management has already made billions of dollars in profits. The recent announcement of Disney, emphasises the growing importance of Revenue Management.

The foundations of the concepts are taught at Hotelschool The Hague during the 8-week essential course on Revenue Management in Phase 2 and once properly understood can be easily extended to different situations and even industries. This course is about optimising revenue in the Hospitality Industry. You will learn about and work with relevant concepts like marketing strategy planning, competition analysis, revenue vs. profit, consumer value, segmentation, targeting and positioning, financial ratios and analyses, pricing strategies and so on. During the workshops case studies are used to understand the different aspects of Revenue Management and practice their application.

For more information, please watch the following video.

Business Course for Professionals
Hotelschool The Hague offers a five day business simulation, 'Advanced Revenue Management'.
For more information and registration, please visit: Advanced Revenue Management Course

With special thanks to Martin Lewison, Professor at Farmingdale State College, New York and Former Lecturer Hotelschool The Hague.

About the author

Larissa Koupriouchina

Larissa Koupriouchina MSc is a Senior Lecturer in Revenue Management and Research fellow at Hotelschool The Hague. She holds a MSc in Hospitality Management from Erasmus University, a MA Degree in Business Controlling from Politecnico di Torino, and a BSc in Economics from Novosibirsk State Academy of Management. Prior to joining Hotelschool The Hague, she worked as a project manager and professional in several disciplines at Deloitte & Touche, Protiviti and TNT. As a consultant she worked in technology risk domain and data mining, creating innovative approaches and procedures for automating some audit activities, and developed approaches to profit recovery analysis and training staff on related methodology and techniques.

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