Dynamic pricing is creeping its way into a greater number of industries like golf courses, restaurants, and bowling alleys.
- Pricing changes in industries like airlines are somewhat expected. If a traveler wants to book last minute or on a busy weekend, he can expect to pay a higher fare, but consumers do not expect the same treatment in other industries.
- Some restaurants and movie theaters have started implementing dynamic pricing during expected high demand.
- Movies that are expected to draw big crowds, like The Batman, may have higher-priced tickets than features with less hype, The Wall Street Journal reports.
- The largest U.S. movie chain, AMC, announced that it will start adjusting its ticket pricing based on peak shows and prime seating, similarly to how tickets for sporting events are priced.
- Fans complained when trying to buy Taylor Swift concert tickets earlier this year as dynamic pricing pushed some prices into the thousands.
- Restaurant Noodles & Company announced earlier this week that it would begin testing dynamic pricing controlled by its digital menu boards. Prices will vary depending on the time of day, the item, and how full the restaurant is.
Why it’s news
Dynamic pricing can potentially bring in more revenue for companies, but the success of dynamic pricing may depend on the customers’ patience. So far, most consumers do not seem fond of the pricing changes.
Software consultant Patrick Jandorf told The Wall Street Journal that he had taken five cruises over the last year. However, when booking a cruise with Royal Caribbean Group, he was met with price discrepancies. A water park outing on the company’s private island was advertised as between $62 and $70, but when he went online to book, he was met with a $120 fee.
Jandorf later found that pricing for the park depends on the time the boat arrives and how full the cruise is. Jandorf and his family decided to skip the water park experience.
Other industries seem to be able to implement dynamic pricing without much pushback from customers. Rachel’s Kitchen in Las Vegas recently introduced dynamic pricing for its takeout orders at three of its locations, The Wall Street Journal.
Depending on the time and level of demand, prices can shift between 10% and 15%. Some guests have complained, but CEO Debbie Roxarzade says there hasn’t been much pushback from customers. She says the trick is not to make the price increases too extreme.
Roxarzade is also considering implementing dynamic pricing for dine-in customers, though she thinks this could be harder for customers to accept. Regulars are more likely to dine in and more likely to notice a shift in prices.