Market efficiency and amusement parks

This past weekend the family and I spent a few hours of nonstop fun at a local amusement park. Fun, yes… but for me, most of the things I experience can and usually do end up framed as a business problem to be solved. Amusement parks being no exception, so here is, one of what I call a “mental chew toy”.

Amusement parks and market efficiency

Rides at an amusement park are a perishable good, like hotel rooms and seats on airlines, yesterdays rooms and seats can’t be sold today. While every ride I saw running had a queue of people ready to enjoy its wonders, some had extraordinarily long lines, others not so much. There’s not a lot that the park can do to increase supply while the demand varies widely.

So, what can the park do? Increase market efficiency. Nearly everyone knows of a service that has strived to increase market efficiency, and many of us have used them. I’m speaking of services like Hotwire, Travelocity and Hotels.com. They connect supply and demand in the most efficient way possible. These methods could be applied to an amusement park if there were a few tweaks added.

One, roll out park-wide wi-fi. I know… what’s that got to do with the price of rice in China? It’s the infrastructure for everything else. Two, add automated queueing and exit gates to every ride (connected via wi-fi). To pull this off you have to know what the real-time demand and supply is, that is, the queue size is demand and exit rate over time is supply. Three, interactive information displays in every place you would normally see a “you are here” map. These would give real-time information about how long the lines are and how far away the shortest line is. Four, Android and iOS apps that pull off the same thing as the info displays. In addition to the info about queues social networking can be added to the apps. Customers could find what ride their friends were in line to ride next, and that is only a start.

Lastly, with the availability of all that data, analytics can be applied to dig up all kinds of insights. Such as, popularity of rides within a demographic segment, then used in targeted marketing. Times of day and days of the week that peak demand and used to roll out flexible attractions to pull people out of the lines (shorter lines), and over to the free concert or drawing (happy customers). It could even be real-time, so that as soon as a certain queue length is reached an Ad hoc event is started to draw the crowd away from the lines. Predictive analysis could even be used to find the demand for an attraction that isn’t even built yet and how that would affect the demand on the rest of the park. It’s all about the availability of data and being able to turn it into actionable intelligence to increase market efficiency.

I welcome your comments and suggestions.

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