Written by Christian Ross, Market Manager – Europe

More and more ski areas and other attractions, such as amusement and water parks are now considering switching to a dynamic pricing strategy to boost ticket sales. This is a development that, of course, we are happy about at Liftopia, because we have long believed in the benefits of increased pre-sales for both operational and financial predictability.

While in North America dynamic prices have been used in online sales (with a fixed window price) for many years now, there are currently two main approaches to dynamic pricing in Europe:

  • Dynamic prices for online sales with fixed prices at the window
  • Dynamic prices for online sales with dynamic prices at the window

In the following, I would like to briefly explain why we recommend the first approach for our partners and why window prices should be fixed and not dynamic – or to put it in the words of our CEO Evan Reece: “It is not that we can’t offer dynamic window prices, we just recommend against it.”

One of the main goals of dynamic pricing is to generate advanced bookings. If a ski resort or amusement park wants to consistently tackle the shift towards significantly more online pre-sales, it should focus on efficient sales. However, dynamic cash desk prices significantly reduce the efficiency of pre-sales, because it reduces customers confidence in the value of the ticket offered online. It is known from price psychology that an anchor price, i.e. a reference value, leads to increased sales. The fixed window price represents this reference value relative to an online pre-sale. When shopping, a guest can see how much can be saved compared with buying at the window. This illustrates the value of the ticket and the advantage of a current purchase. At the same time, the customer also has a positive feeling of having saved on shopping. Even in our subconscious, the (sometimes significantly) higher displayed window price creates an anchor effect: it makes the current online price appear even better for potential buyers (see also research by Nobel laureate Daniel Kahnemann).

With increasing online shares in total sales (which is usually the case with lift companies and other attractions with a dynamic pricing approach), and the increasing costs in online marketing, efficient sales will become increasingly important in the future. Clear communication of the window price and the savings from advanced purchase contribute to increasing conversion rates and a high return on marketing.

Higher customer satisfaction through clear, fixed cash register prices

Another, and not negligible, aspect to consider is customer satisfaction. It is generally a poor experience for the guest if it is not clear what price is available at the ticket window. If the price is raised significantly on peak days, this regularly causes frustration among guests. Guests perceive this increase as a surcharge, which, moreover, is also significantly more negative in terms of price psychology than a discount. The complaints will usually be something the employees at the window have to deal with or guests give way to their anger in the social networks. And let’s be honest: The days when there is a “surcharge” are usually the days when the slopes are the most busy, which usually does not go hand in hand with the most beautiful guest experience.

Post Author: liftopia

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