This Is Why Your Guests Are Already Familiar with Dynamic Pricing

When it comes to pricing strategy and ticket sales, resorts and attractions are sometimes wary to implement dynamic pricing for fear their customers might be upset or not understand it. What we’ve found, however, is that operators frequently underestimate the public’s understanding and acceptance of the concept of dynamic pricing. This often results in missing out on a major opportunity for revenue growth, streamlined operational planning, online sales efficiency, and improved consumer trust.

Dynamic pricing is a revenue management strategy used by many types of leisure and tourism companies that continuously adjusts prices for admission based on demand, season, day, time of entry, and when customers buy. With dynamic pricing, each day is priced according to demand and prices for each day rise as customers approach their respective visitation date. With limited inventory available at each price point, prices adjust automatically in response to customer demand over time.

Despite many benefits, resort and attraction operators are sometimes hesitant to implement or even learn more about dynamic pricing for fear that they’ll confuse their customers by changing pricing, negatively impacting sales.

The assumption that customers are not already familiar with the concept of dynamic pricing, however, is a myth. Parks and attractions operators can safely implement dynamic pricing at any time, because their consumers are already familiar with and encounter dynamic pricing in many aspects of everyday life. Here’s why…

Dynamic pricing principles appear in all kinds of sectors including transportation, entertainment, and both business and leisure travel. In the age of e-commerce, people regularly make decisions based on dynamic pricing principles for everything from parking their car and watching a movie to hailing an Uber or buying a flight. For example, movie theaters regularly discount tickets on Tuesday because it is historically the slowest day of the week – and the well-known deal draws more customers in.

In each of these cases, customers will make purchases earlier if they can save money or will pay more for highly sought-after limited inventory, which allows operators to use pricing as a tool to influence the behavior of consumers and capture additional profit. There are, however, different kinds of dynamic pricing.

The approach that we recommend is establishing pricing hygiene so that prices steadily increase as you get closer to an event’s date but never go back down. This differs from surge pricing or unexpected price drops that leave customers feeling frustrated. The ultimate goal of smart dynamic pricing is to increase revenue while increasing consumer confidence and trust.

“Most people think that dynamic pricing is not something the customer understands—and they’re absolutely wrong,” says Gulf Islands Waterpark General Manager Mark Moore who has successfully employed dynamic pricing to increase sales at his attraction.

“Everybody knows that Tuesday is the cheap night at the movie theater and Monday nights are when kids eat free at certain restaurants. Everybody understands what these brands are doing and while it’s not dynamic in the way that Catalate works, it’s definitely the same premise. The consumer absolutely understands that if they do an activity at an off-time, they get a better price.”

Moore encouraged the park’s leadership to adopt dynamic pricing, and since then, Gulf Islands has reaped multiple benefits including its highest year of online sales in 2021. The park is preparing to use Catalate to power online sales of admission tickets for the fifth summer in 2022 and, in fact, industry colleagues will often ask him about Gulf Island’s approach and success with dynamic pricing.

Moore constantly works to combat the myth that customers don’t understand dynamic pricing. He believes that the parks and attractions industry as a whole has a way to go to grasp how to use pricing as a tool to get guests to do what operators want them to do; commit to purchases earlier and add on extras when applicable. Of course, this also benefits the customer, in obtaining the lowest possible price and helping to achieve a positive guest experience.

“It’s one of the hurdles that people who manage water parks and attractions have to understand: The customer is very comfortable with the concept of dynamic pricing. Operators might not be, but the customer is,” Moore said.

Daily Instances of Dynamic Pricing Outside of Resorts & Attractions

Let’s explore how dynamic pricing is already employed in multiple scenarios and where, in some cases, these industries deviate from the pricing strategies used by ticketing businesses like ski resorts or waterparks.


The airline industry can only sell a set number of tickets per flight and what customers are willing to pay for those seats varies broadly based on destination, timing, and availability. Airlines thus developed a strategy to manage their available ticket inventory and respond to their customers’ demand and competitors’ pricing in real time. Airlines also differ from other industries in that there is a fixed capacity – there are only so many tickets available on each flight.

Everyone knows that airline tickets are going to be much more expensive during peak travel times such as major holidays or the summer season than they will be during quieter months. Ticket prices will also change based on the destination. While a ticket to a popular vacation destination is more expensive on the weekends, transatlantic tickets between New York and London may be more expensive during the week due to business travel demand.

The when and where of each ticket will impact price, which has trained consumers across the board to purchase airline tickets as early as possible. This habit has been slightly influenced by the invention of price prediction tools, which causes consumers to monitor and wait in expectation of cheaper tickets. Airline passengers are well aware that each person around them has paid a different fare for the same seat, and this is widely accepted as part of the air travel experience.


Consumers are well aware of the impact of dynamic pricing in the hospitality business. A hotel room booked over a long holiday weekend will be substantially more expensive than what that same hotel room would cost during the week during an off-season month. The idea that guests will spend more depending on the date and time of their hotel stay is widely accepted.

Hoteliers use the principles of dynamic pricing to ensure that they’re maximizing their revenue for each room each night. If there are multiple conferences occuring, room rates go up. If it’s a quiet season, room rates go down. But how and when consumers purchase a hotel room also impacts the price. Consumers can save by purchasing directly from the hotel except in last-minute scenarios where they might save by going through a last-minute booking platform.

Consumers do not lose trust in a hotel brand based on this pricing strategy, because it’s become an accepted part of doing business.


Restaurants, like many venues, have limited inventory — a set number of seats on any given night. Some of those seats might be perceived as more valuable than others — for example, outdoor dining on a coveted waterfront during summer months — in which case the market will likely pay more for these seats during the most popular time slots.

While dynamic pricing is still relatively new to the restaurant industry, there is an established practice of pricing menus differently based on the time of day. For example, a set lunch menu is going to provide a deal for consumers in comparison to a dinner menu where diners select items a la carte. With dynamic pricing; however, restaurants charge different prices for identical menus or charge more for coveted tables.

Restaurant reservations platform Tock — a competitor to OpenTable — embraces dynamic pricing and has found success with a certain kind of restaurateur. Tock founder Nick Kokonas also co-owns Alinea, the renowned Chicago restaurant with three Michelin Stars, which is also one of the first restaurants to experiment with dynamic pricing using Tock. As part of its strategy, Alinea has offered 35% off regular menu prices at quieter times.

Highway Tolls

Even the U.S. government uses dynamic pricing. The US Department of Transportation employs dynamic pricing to continually adjust the pricing of its electronic tolls to maintain an optimal traffic flow on highways. Under this system, prices increase when the tolled lanes are relatively full and decrease when the tolled lanes get less full. This is also referred to as ‘congestion pricing.’

Dynamic pricing is used as a tool to shift the behavior of drivers so they either shift their mode of transportation or adjust their schedule to not travel at peak times, which ultimately helps manage the traffic flow.

A good example of this is the New York MTA’s plan to introduce congestion pricing with tolls south of 60th Street in Manhattan by the end of 2023. In addition to managing traffic flow and funding mass transit, the program would help reduce 17 million metric tons of greenhouse gas emissions and save $100 million in healthcare costs from reduced emissions.

Public Transportation

Speaking of mass transit, dynamic pricing can also be used to influence the transportation habits of citizens that rely on public transportation. For example, the Long Island Railroad sells different priced tickets based on the time of the train’s departure. Peak train tickets are more expensive than off-peak tickets which influence consumers’ behavior – they might commute during less busy hours – and helps manage the flow of traffic.

Improving tech and smart sensors means operators are also starting to be able to adjust prices on digital passes based on real-time factors such as peak travel periods, unexpected weather changes, and city-wide events. Therefore, cities will increasingly be able to adjust the cost per ride even in cases in which the consumer has purchased a time-based pass such as the MTA 30-day ticket.

Utility Suppliers

Dynamic pricing in the context of utility providers rewards customers with lower prices for using energy at off-peak times when production costs are lower. Providers can vary electricity prices across time and location to reflect costs of providing electricity to consumers under specific market and operational conditions s.

With real-time pricing, prices vary over short intervals (typically an hour) and consumers can easily save money by shifting energy-intensive tasks like running a dishwasher by an hour or two. A time-of-use pricing plan breaks up the day into larger intervals with different prices that remain fixed over a season. These are often off-peak and peak times, which encourage consumers to reduce their use during peak demand times by charging a higher price and shifting use to times of lower demand by offering a lower price, accordingly.

As highlighted in all of these examples, pricing is used consistently to adjust consumers’ behavior and is, therefore, actually everywhere. Or as Moore explains it –

“I’ll flip this example: How does the government keep us from speeding? There’s a fine in place so they’re essentially using financial disincentive to control our behavior. It’s the same exact behavior; it’s just being used as a penalty instead of an incentive but we as a society change our behavior based on financial realities — right down to the way that we drive. If we feel that gas prices are too high, we start buying gas-efficient, electric automobiles. If gas is at a manageable point, we start buying gas-sucking SUVs,” says Mark.

“Dynamic pricing is everywhere.”

Raising Awareness of Dynamic Pricing

While customers are aware of dynamic pricing overall, there are simple steps that any supplier can take to further educate their audience. Businesses can multiply their efforts by aligning their revenue management and marketing teams around a dynamic pricing strategy and single go-to-market message.

The first foundational action item is to heavily market the concept that visitors can “buy early and save” across all owned channels including the attraction’s website, email marketing, social media, and even in-park for returning customers.

Operators can then expand on that message by drilling into the specific benefits of their dynamic pricing strategy which likely includes the fact that customers will find the best price online and the best price when purchasing direct. While it would be fruitless to market the details of the pricing strategy itself, highlighting how customers can find the best price increases the likelihood that they’ll take actions aligned with the new strategy.

Finally, operators should promote why it serves customers to buy early – beyond saving – including that guests can:

  • Skip the line at entry
  • Check-in faster
  • Access the park earlier

Consumers are already making decisions, large and small, based on the principles of dynamic pricing. Now it is time that operators start making it work for their businesses too.

Catalate is a global pricing and e-commerce company empowering ski resorts, parks, and attractions to increase online revenue. As the only purpose-built ticketing platform for the industry, Catalate has developed successful strategies for hundreds of partners across $1 billion in online sales. Get in touch today.

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