As you probably know, hotels, airlines, and car rental companies (among others, I’m sure) use sophisticated techniques to price their products according to changing market demands (read: the price people are willing to pay at the time of purchase). A hotel room in Vegas on New Year’s Eve is much more expensive than the same room on Tuesday night in September. Why? Demand is higher on the holiday, so the hotel can get away with charging more. For somewhat different reasons, a last-minute airline ticket from DFW to BOS is probably much more expensive than the same seat purchased three months in advance. Why? Anyone buying a last-minute ticket is somewhat desparate to fly and willing to pay more, much more so than a price-sensitive vacation traveler who buys theirs months ahead. It’s no fun for the customer, but it makes the business a lot more money and allows them to sell lower-demand products at a discount (think $49 rooms at Monte Carlo on Tuesday night).
The Dallas Stars are trying this concept with hockey tickets. I never considered the possibility, but now I’m wondering why no one tried it before. My friend Colin is SVP of marketing for the Stars and gave one journalist an interesting interview on the new plan. In a nutshell, tickets to the Saturday night Red Wings game will be more expensive than tickets to the Monday night Kings game. The Kings game might actually cost below average since demand for those tickets is lower than average. As conditions change (teams get hot or cold, opponents’ star players get hurt or return, etc.), ticket prices adjust accordingly. The new plan should produce more revenue overall and fuller seats for the Stars, good bargains on some games, and a diminished market for scalpers.
What do you guys think? To me, it seems like a good idea. As Colin says in the article, it’s a way to better match the demand to the available seats. The fans get more of a say regarding how much they are willing to pay. They can get better seats for a less popular game. They also have a better shot at actually getting tickets to a highly popular game since the higher prices will convince some of the fans to watch from home instead. If this scheme works for the Stars, it’s highly possible that other hockey organizations and other sports will follow suit.