The High Cost of a Cheap Ticket
There was a time when the price of admission to a theme park reflected the full value of the experience. The gate was sacred. It was where a park made its stand - not only financially, but also in how it positioned its product. Today, we’re watching an industry-wide race to the bottom, where season passes are priced so low they’re practically a giveaway. The once-critical relationship between gate price and perceived value is unraveling, and it’s changing the business - and not for the better.
I’ve seen these shifts before. Back in the 1960s, the Pay-One-Price (POP) model revolutionized the business when Six Flags Over Texas introduced the POP concept. Parks slowly began moving away from selling individual ride tickets and began charging a flat fee at the front gate. It was a game changer so embraced by the visiting public that Disney eventually moved away from their Ticket Books, the program they opened with in 1955.
After the POP program was entrenched throughout the theme park industry, another major ticketing shift idea was on the horizon. In the 1980s and ’90s, the next major modification came with introduction of the season pass. This plan provided loyal guests the opportunity to return again and again within the season, often at a price that took two-and one-half visits to pay back. Wow! It rewarded loyalty and commitment, while preserving the integrity of the daily admission price. For your information, at this point in the history of the industry, “Ala-Carte” was 30% of the front gate. Promotions were approximate 30%, and the important categories of group sales (churches, clubs, companies, organizations) were also about 30% of total ticket sales.
Fast forward to today, and we’ve seen the value proposition of ticket sales and seasons passes turn upside down. At some major parks, guests can buy a season pass for the cost of a single-day ticket (less than full day time ticket!). It’s now possible to “repay” your season pass cost on the very first visit. At places like Six Flags Over Texas, Six Flags Great America, Kings Island, or even Cedar Point, these deeply discounted passes are becoming the norm. It’s a short-term strategy that’s long overdue for rethinking.
Source: Canada’s Wonderland
The season pass program has caused “heartburn” at Disney parks, creating a 5-year plan of make-over, with continuing changes still occurring. At some of the seasonal parks, season passes come close to approximating 55-60% of total attendance - by my standards, far “too many eggs in one basket”.
In 2020, the beginning of our introduction to COVID, the pre-season season pass programs bit many operators in the butt. This placed parks in a first-time situation of figuring out how to re-pay pass-holders, extend passes, and in general, regret the number of passes sold. It was a marketing and financial nightmare.
Now I will concede that these pricing discounts can definitely drive volume. I have always said “I will accept the dilution, if I receive the offsetting volume in attendance”. But what happens when volume replaces value? When guests realize it’s as cheap to buy a pass as it is a one-day ticket, the daily gate price loses credibility. This has already happened. The guest has started to question the real worth of the experience. It results in eroding pricing integrity. And worse, it shifts the business model into a constant chase for upsells, such as preferred parking, fast lane passes, dining packages, and exclusive upcharge experiences. All of these become necessary to cover revenue which was once earned at the admission gate.
Certain park operators have worked diligently to hold the line. Three examples - Dollywood, Hersheypark, and Holiday World - continue to price their product confidently, requiring the customary two to three visits to make the season pass valuable to the park’s baseline attendance. These operators understand that pricing is part of branding. It sends a message: “Our experience is worth what we charge.” They trust in the strength of their product and have not jaded the market with over-discounting.
Source: Dollywood
The drive to increase season pass sales has completely reshaped the business, both at destination parks as well as regionals. This has not necessarily been in a way that supports sustainability. Cheap passes bring in more guests, yes. But they don’t always bring in the right kind of guest. With lower per caps and heavier wear on infrastructure, the long-term economics can get shaky. High attendance doesn’t equal high profitability. We’ve learned this the hard way. It can fall into the category of capacity “burn and churn.” Disney found this out at both their California and Florida parks, as it relates to season pass holders.
There is an argument that deeply discounted season passes create loyalty, but what they really may create is a bargain-hunting mentality. Keep in mind - the season pass holder is our smartest, most sophisticated user, knowing when and when not to visit (weekdays, weekends, holidays, daytime, nighttime, etc.). Parks have become a commodity. A transaction. Not always a destination with intrinsic value. A stop-off for some.
It’s worth looking at other industries that maintain price integrity as a core strategy. Airlines, for example, might offer entry-level fares, but they hold fast on premium seating and baggage. Brands like Apple, Disney, and high-end resorts strive to hold down discounting. This year is a discounting anomaly, particularly for Disney who just put a new offer out for both Florida and California residents this week. Through the years, they have built value into their pricing. They don’t apologize for it. And under normal economic and weather conditions, customers still line up.
The theme park industry needs to consider the long game. Are we building relationships, or just racking up turnstile clicks? Is our pricing strategy supporting our brand, or cheapening it?
When we introduced Pay-One-Price, it revolutionized the business. Then came the season pass, giving families more access and boosting repeat visits. But today, I have to ask, “have we gone too far”? Are we overextending our parks at the gate? Are we still selling the magic, or are we just chasing volume?
It's time to reexamine the value of the gate and decide - do we keep giving it away, or do we restore the pricing integrity that once defined this industry? Maybe it’s dynamic pricing - the industry has been tiptoeing around this program for 15 plus years. The Pay-One-Price has been here for 64 years. It has served us well, but it may be time for a change.
Contact ITPS
International Theme Park Services, Inc.
2200 Victory Parkway, Suite 500A
Cincinnati, Ohio 45206
United States of America
Phone: 513-381-6131
http://www.xnznkj-xf.com
itps@interthemepark.com