Dynamic Pricing in Amusement Parks

Walt Disney World and Universal Orlando Resort have always been the best 2 parks in the world and the most competitive ones when it comes to pricing. Both the studios entered the entertainment theme parks in Orlando. The debate has always been on whether to choose between Mickey Mouse and Harry Potter. Universal Studios Florida have opened Wizarding World of Harry Potter which has created a hue about the pricing strategy of the theme parks.

Walt Disney World

The Walt Disney World Resort, informally known as Walt Disney World or simply Disney World, is an entertainment complex in Bay Lake, Florida (mailing address is Lake Buena Vista, Florida), near Kissimmee and Orlando and is the flagship of Disney's worldwide corporate empire. The resort opened on October 1, 1971 and is the most visited vacation resort in the world, with an attendance of over 52 million annually.

Walt Disney World is owned and operated by Walt Disney Parks and Resorts, a division of The Walt Disney Company. The property covers 27,258 acres (11,031 ha; 43 sq mi), in which it houses 27 themed resort hotels, nine non–Disney hotels, fourtheme parks, two water parks, four golf courses, one nine-hole walking golf course for young golfers (no electric carts allowed), two themed miniature golf courses, one camping resort, a downtown-like shopping district, and other entertainment venues.Magic Kingdom was the first and original theme park to open in the complex followed by Epcot, Disney's Hollywood Studios, and Disney's Animal Kingdom, which opened later throughout the 1980s and 1990s.

Since last few years, Disney world has been increasing the price of its tickets and services.  The ticket that used to cost 89$ as increased to 95$ and now the ticket costs 105$. The revamped strategy was employed while implementing the Disney World's magic your way.

Despite of increasing the prices, the park have seen rise in the number of visitors due to the following three reasons:

Firstly, Disney has increased the price of its ticket only after the Universal studios have increased the price of theirs. This increase makes Disney looks more like responding to market pressure rather than trying to increase its profits.

Secondly, Disney offers a differentiated product. The quality and uniqueness of their rides and the theme employed by Disney makes Disney parks more attractive than others. The feeling of being associated with the Mickey mouse and Cinderella are enough for people to loosen their pockets by a few bucks. This has helped Disney in keeping their demand mostly inelastic, enabling them to increase the prices of the tickets without any reduction in the number of people arriving at the destination park for a fun and fairy time.

Thirdly, Disney’s price increase allows to segment the market to serve better their customer base. They are able to offer flexible and cheaper bundle packages with their tickets and hotels as well as discounted resort tickets through third-party ticket vendors. With these offers, Disney caters to the price-sensitive segment of their market who are willing to work for a less expensive Disney experience.

Therefore, by having a discriminative pricing strategy, entertainment parks have been able  to  collect more revenue from their customers who aren’t price sensitive and are willing to pay full price, yet still satisfy the segment of their customer base who is.

Entertainment Theme Park Industry

A  theme park is a group of entertainment attractions, rides, and other events in a location for the enjoyment of large numbers of people. Entertainment parks provides attractions to cater specifically to certain age groups, as well as some that are aimed towards all ages. Theme parks, a specific type of amusement park, mostly uses a theme based on the image of the studio or some direct associations in order to differentiate themselves from the competitors to attract large segment of the targeted customer as well as to strategically price their services in order to maximize their profits.

Entertainment parks have evolved from daily fairs and pleasure gardens, which were just created for people's recreation. Today the entertainment covers the whole experience of visiting and spending time in the parks to eateries, multiple day stays and merchandizing based upon the theme of the park.

The entertainment park industry's offerings range from large, worldwide type theme parks such as Walt Disney World, Wonderla and Universal Studios, Hollywood. Many small and lovable entertainment parks have also made their mark in the industry and countless smaller ventures exist in many of the states of the U.S. and in countries around the world.

Family fun parks starting as miniature golf courses have begun to grow to include batting cages, go-karts, bumper cars, bumper boats and water slides. Some of these parks have grown to include even roller coasters, and traditional amusement parks now also have these competition areas in addition to their thrill rides.

As of 2012, the Walt Disney Company accounted for around half of the total industry's revenue in the US as a result of more than 50 million visitors of its U.S.-based attractions each year.

Entertainment Parks Strategy

The prime aim of a entertainment park is to provide their customers with a premium amusement and entertainment experience better than the competitor's in terms of delivery excellence and pricing. At the same time, Parks tries to include a price discrimination to increase the producers surplus by eating into the consumers surplus.  

Thus the pricing strategy of the entertainment parks will be to charge a premium price as per industry standards.

Entertainment parks indulge in various marketing and promotion strategies to increase their consumer base. The chief strategies can be classified as sales strategy, marketing strategy, pricing strategy, daily customer projections and promotion strategy.