Within six months of taking over from Nick Varney, Merlin Entertainments’ chief executive Scott O’Neil prioritised dynamic – or surge – pricing.
“If you’ve been to an overcrowded theme park, you’d be hard-pressed to say that it was as good an experience as if the numbers were regulated,” he said in May last year.
For a theme park, that is completely true, and potentially real justification for charging people more – or less – based on how many people have booked to visit.
Dynamic pricing is long-established in the travel industry.
Think of those rapidly-fluctuating Ryanair flight prices, hotel rooms, or holidays in general.
However, if a plane or hotel is full you are largely getting the same experience regardless of how much you have paid.
But in a theme park at maximum safety-based capacities, the experience can be quite horrendous.
Redefining ‘full’
Long queues, outlets and staff that cannot keep up, and general overcrowding are just a few things that might make you wish you hadn’t bothered.
A full theme park – typically 15,000 people at Thorpe Park, or 28,000 Alton Towers – might need to be something Merlin no longer strives for, or even allows.
Alton Towers’ opening Saturday was this year “sold out” with tickets taken off-sale way below a level of 28,000 bookings.
Prices began at about £35, before in the final says of sale rising to £53 and later finally £59.
The process of rising prices was probably a little more manual than the “machine learning” system Scott O’Neil speaks of.
But there was still something significant to learn from Saturday 16 March at Alton Towers.
It was not an utterly horrendous day, even if it was busy.
That was despite the park’s obvious worries, when they sent out an email offering the (already existing) option to re-schedule bookings.
Ultimately, what they did was restrict numbers in the park, but charged more for the experience – and yes, demand – that day attracted.
And crucially, it largely worked.
Multiple sell-outs
If O’Neil’s stated vision of customer experience is to be realised, surge pricing will likely need result in many days across the parks’ calendars taken off-sale.
That would be a real change in strategy for Merlin, and prices could go way beyond what consumers are used to.
But it would mean less people in the parks on many hot summer days and over the Halloween-season.
The theory is that the invaluable guest feedback would improve.
The incredibly damaging “I only got on <insert low number> rides all day” potentially being eliminated forever.
But intelligent pricing should also see people have the option of picking less convenient – or otherwise desirable – days to visit and not miss out.
And a true dynamic pricing system could see change at both ends.
Possibly those very quiet, late-season, term-time days decreased to new lows in ticket price.
But a divergence of upper and lower-end pricing could bring headaches to those with children, where term-time is of course not an option.
And for Merlin at least, there could be headaches with the numbers of annual pass holders pre-booking certain dates.
Annual pass future
O’Neil has implied that some more recent decisions – mainly around major capital investment choices in the UK – would not have been taken by him.
In an interview with Attractions Management last year, he said: “What got Merlin to where we are now is not going to get us to ultimately where we want to go.”
He was talking in general terms rather than specifically on annual passes, but the impression is he still seeks major strategic change.
The current spectrum of four Merlin Annual Pass could therefore be polarised at each end.
The ‘lower’ being the off-peak Discovery pass, while the ‘upper’ is the virtually unlimited Platinum.
It might be that those two passes are safe, even if pricing of the Platinum were to see a significant hike from its already hefty £299.
The bigger scrutiny might come for the middle-of-the-road Gold and, much more recent, Silver pass.
Silver was seemingly introduced as a sales response to the gulf between the Discovery and Gold passes’ number of accessible days being too great.
It would be interesting to know if O’Neil felt this filling of the middle ground was a wise decision.
If a recalibration of guest numbers in a busy theme park is to take place, then the significant proportion of annual pass holders among them will almost certainly need to be addressed.
And in such a recalibration, it becomes harder to see the current Gold and Silver passes remaining in the mix.
Unless of course the numbers sold are restricted, or maybe even surge-priced.