How Dynamic Pricing Can Help Solve the Seasonal Staffing Crunch

Resorts and activity operators have always found it difficult to staff up for the season. But in recent years, the challenge has grown greater due to a confluence of factors:

  • The pandemic
  • Residual effects of government stimulus programs
  • “The Big Quit/Great Resignation”
  • The housing crisis
  • Not enough temporary work visas to meet the demand for seasonal labor
  • The war affecting eastern Europe

These factors have had a ripple effect, upping the ante not only for operators in particular but also for entire destinations, causing those affected to think differently and be more proactive.

The Chain Reaction Caused By COVID

In its policy brief, “Tourism and COVID-19 – unprecedented economic impacts,” the United Nations World Tourism Organization reminded the world that tourism supports one in ten jobs. But because of COVID, as many as 100 million direct tourism jobs may have been lost. In 2021, based on then-demand, the World Travel & Tourism Council estimated a labor shortfall of 690,000 workers.

Initially, as businesses of all kinds re-opened after pandemic lockdowns, some workers had trepidation about returning to work for health reasons. Others had childcare issues – their employers re-opened but their childcare providers did not.

One 2021 poll found that 16% of Americans not actively seeking work said the amount of money they received from unemployment benefits and government programs made it “not worth looking” for work. Twenty-eight percent of survey respondents also agreed with the statement that “there are a lot of people who are not looking for work because they can do almost or just as well collecting unemployment benefits.”

The phenomenon of workers leaving jobs in droves, “The Great Resignation,” saw low-paying service industries lose the highest number of workers of any sector. This had a direct impact on seasonal workers as well.

In resort towns made up primarily of small businesses, like Rehoboth, Delaware, the lack of seasonal workers forced many businesses in 2021 to operate only partial hours. The same scenario played out in ski resort areas like Vail in early 2022.

In the meantime, demand for leisure travel has surged back.

“The U.S. Travel Association predicts domestic travel across the country will increase 11% in 2022 over 2021, reaching $932 billion in spending, with leisure travel growing, hitting 101% of the pre-pandemic year.”

With this growth comes further demand for seasonal workers. In times past, many resort towns and major attractions filled open slots for seasonal labor with international workers in the United States on temporary work visas such as the J-1 or H-2B programs. In Maine, for example, “workers on J-1 or H-2B visas generally make up about 10 to 14% of the seasonal work force.”

H-2B visas, which do not solely apply to the tourism industry, are normally capped at 33,000 for six months of each fiscal year, a figure already met by the beginning of March 2022.

This led to a temporary expansion of the H-2B program by 35,000 workers. The J-1 visa (now “BridgeUSA”) for foreign students has also been impeded by the Russian-Ukraine conflict, as many of the foreign students that work seasonal summer jobs come from that region of the world.

All these factors have forced activity and resort operators and entire destinations to think and act more proactively. Oftentimes, proactive thinking leads to an examination of business strategy, operations, and tools that aid with productivity and efficiency.

How Dynamic Pricing Offers Relief

While there are ideas by the handful – from workforce management tools to raising hourly wages to housing seasonal workers to offering hiring bonuses and other incentives – one lesser known solution that can offer relief to the seasonal staffing crunch is the implementation of dynamic pricing.

Dynamic pricing is an approach to pricing – facilitated by technology – that continuously adjusts prices based on demand, season, day, time of entry, and especially when customers buy. The goal of dynamic pricing is to offer the right price at the right time to get customers to buy in advance. In the end, dynamic pricing is a means to achieve pre-sales.

Dynamic pricing offers many benefits to an attraction or resort business’s bottom line, but it can also be used to alleviate staffing burdens. When coupled with a robust e-commerce sales experience, dynamic pricing incentivizes customers to purchase online, ahead of their visit. This in turn:

  • Enables resorts and attractions to proactively plan staffing for the week, or even month ahead. For instance, some Catalate customers have shared that they use Catalate data and reporting on expected arrivals within a certain booking window to predict the total number of expected guests on the day of arrival.
  • Allows businesses to potentially decrease their seasonal workforce through peak season. Gulf Islands Waterpark, for example, is now selling 20% of its tickets by ecommerce. Not only does this mean the need for fewer employees at the walk-up ticket windows, but the waterpark has also seen an uptick in in-park spending as a result of the advanced ticket sale.
  • For resorts and attractions selling food and beverage, a dynamic pricing strategy means adding purchasing efficiencies to avoid wastage. It also means better planning for seasonal staffing at on-site restaurants.

To learn more about how Catalate can help your business establish a fruitful dynamic pricing strategy and help alleviate the staffing crunch, schedule a demo today.

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