SABINE LEHMANN: SA’s visitor attractions admissions strategy too heavy handed

SABINE LEHMANN: SA’s visitor attractions admissions strategy too heavy handed

2021-12-03 10:46:00 PM

SABINE LEHMANN: SA’s visitor attractions admissions strategy too heavy handed

Attractions will feel the strain for years to come as they catch up on the losses made in 2020 and 2021.

03 December 2021 - 12:50Sabine LehmannPicture: GERALDINE KENTVisitor attractions, like all other products in the tourism value chain, have had a difficult time over the past 18 months. The African Association of Visitor Experiences & Attractions recently completed the first benchmark study of visitor attractions in SA. It found that 66% of attractions were closed for three months or more in 2020. As attractions generate an average of 57% of revenue from admissions, this has resulted in job losses and severe strain on budgets.

Visitor attractions need to carefully balance the admission fees with their operational costs. Pre-pandemic, operational costs made up 48% of their costs with salaries and wages making up a further 39%. This implies there is not much room to cut overheads and still provide a good experience. With little capital to invest in maintenance and likely zero to invest in upgrading the visitor experience, attractions will feel the strain for years to come as they catch up on the losses made in 2020 and 2021.

A long road to recovery for SA tourismThe domestic market is under financial strain and there have been job losses and reduced salaries. The return of tourism to 2019 levels and spend is forecast to take three to four years. How can attractions survive until then? For any visitor attraction, revenue is the most important driver. Fuelled by feet through-the-door, revenue is dependent on two metrics: the number of visitors and the price they are prepared to pay for the experience offered. headtopics.com

Miss SA 2020 Shudufhadzo Musida makes Miss World top 40 | Channel

The quantity of visitors is dependent on capacity at hand. Most attractions have periods of high and low demand. Attractions reliant on domestic visitors often see high demand on the weekends and school holidays, with low demand during the week. Expanding capacity for high-demand days is costly. As for admissions fees — not everyone is prepared to pay the same price for entrance. Some are willing to pay more to visit at a time of their choosing and others would be prepared to come at a different time, when the site has more capacity, if the price was reduced.

In the past, attractions decided on their ticketing admissions strategy for the year ahead during their budget-setting phase. Rates were set using information and market research available at the time of discussion. For most visitor attractions this is a single admissions price regardless of the time of year or day of the week. Some attractions offer specials during quiet times and a few have dual pricing, one price for locals and another for international visitors. This strategy is heavy handed, outmoded and unable to respond to market nuances.

The operational and staff cost to open an attraction on a low visitor day are very similar to that of opening on a high-demand day. Smoothing the demand curve to get a better spread of visitors throughout the day, week and season would provide a better experience for the visitor and create a better income yield curve for the attraction.

Malesela: Shozi used to talk to himself

A static admissions pricing strategy is no longer a smart admissions pricing strategyPrice tickets for goods were first introduced in 1870 by retailers. Before that, customers and retailers negotiated until they found a price that the customer was prepared to pay and the retailer was prepared to accept. As retailers stocked more items and had more outlets, they could no longer keep track of the minimum price required for each item, so the price ticket was invented. Indeed, haggling in bazaars and markets is still part of many cultures today. headtopics.com

In the 1980s dynamic pricing was (re)introduced by the airline industry. Also known as demand pricing or time-based pricing, the airlines offer a range of airfares depending on the time of travel and demand for the service. This has enabled airlines to smooth the demand curve, fill aircraft seats in low-demand times and ensure they maximise their yield in high-demand periods. It has become common practice in other parts of the tourism and leisure industry too. Hotels, guest houses, car hire, interprovincial bus travel, commuter taxi and bus fares, Airbnbs and even ride-share apps all vary the charge according to demand for the service and willingness of the user to pay.

In the medium term, as attractions seek to maximise revenue to preserve the quality experience offered and support job retention, attraction managers will start to move towards a more dynamic entrance fee structure. This is merely an extension of the range of door admission fees already on offer. Specials, pensioner rates, dual pricing for international visitors and extra fees to skip the queue are already commonly used to spread demand. Visitors will be willing to adopt this as they seek to visit at times that they can afford rather than expect the same gate fee no matter when they arrive.

Everitt lauds Bok class after Sharks' win against Lions

Consumers have become sensitised to searching for a price that suits them when flying or booking accommodation, so they will start to search for the same when visiting an attraction. Thus one can start to plan whether one visits on a low-demand day such as weekday, or a high-demand day such as a weekend in the summer school holidays. It is only a matter of time before local attractions follow the smart pricing admission strategies of international attractions.

Read more: Business Day »

South African Depression and Anxiety Group

SADAG - South African Depression and Anxiety Group Read more >>

SABINE LEHMANN: SA’s visitor attractions admissions strategy too heavy handedAttractions will feel the strain for years to come as they catch up on the losses made in 2020 and 2021.

SABINE LEHMANN: SA’s visitor attractions admissions strategy too heavy handedAttractions will feel the strain for years to come as they catch up on the losses made in 2020 and 2021.

Planning on sending Christmas cards to loved ones? They may be delayed by the international travel bansSA Post Office (Sapo) estimates that mail leaving SA may be delayed by up to 14 days. Not 14 months 🤣🤣🤣🤣 i I wouldn’t take that chance Unfortunately the SA Post office are on anc leadership standards and haven't added value to the taxpayers for a long time. Didn't they mean months?🤔🤔

Covid-19 hospital admissions on the rise in Gauteng as fourth wave loomsCovid-19 hospital admissions on the rise in Gauteng as fourth wave looms - Most of the admissions are of unvaccinated and younger people, but there are fears of a spread to older people

Is heavy rain normal?More widespread rain and flooding are expected this weekend as another rain-producing system passes through the country. Why not duh?

UJ the latest university to make Covid-19 vaccination mandatoryStaff, ad hoc contractors, visitors and students will have to produce vaccination certificates before entering the campus Tyranny unfolding. Unconstitutional. Going against their own constitution and SA bill of rights.