Does dynamic pricing pay off? The industry is divided
Mountain railways are increasingly turning to dynamic pricing models. There is growing concern within the industry that this approach won't pay off.
Engadin St. Moritz launches the total, fully automated dynamic pricing model this season - a first in the Alpine region (Werbewoche.ch reported). At the presentation in June, those responsible emphasized that the aim was to improve capacity utilization and not to take part in a discount battle.
Nevertheless, those who book correctly can also benefit from discounts of up to 30 percent in the Engadin St. Moritz region. In other areas - such as Andermatt-Sedrun - the prices for day tickets are also adjusted according to the weather. In Laax, the price is determined on a daily basis - depending on experience, booking times, weather forecasts and the number of tickets already sold. Zermatt is also planning "the end of standard prices" for this winter.
"Stinginess is cool" in the mountains
How the Switzerland at the weekend writes, the industry disagrees on whether dynamic pricing is the right way out of the crisis for mountain railroads. There is disagreement as to whether lower prices will attract more guests to the mountains or simply encourage the "greed is cool" mentality among guests. One thing is clear, however: the mountain railroads have no reserves to absorb even lower revenues. Compared to 2005, they are currently recording around 25 percent fewer ski days. A turnaround is necessary in order to generate the missing revenue needed for investments.
Engadin St. Moritz is convinced that it will work out well. The assumption is that the new model will allow prices to be maintained and even increased slightly, Thomas Rechberger, Project Manager Engadin St. Moritz Mountain Pool, told the newspaper. If things turn out differently, the parameters will be adjusted.
Dynamic prices - downwards
The Titlis Bergbahnen is less optimistic - and has a correspondingly critical attitude towards the new price models. "In our opinion, the average prices are more likely to be dynamized downwards," says Head of Marketing Peter Reinle. This does not necessarily have to be the case - but if you get it wrong, you will have to massively increase prices on peak days, which will annoy guests.
Jürg Stettler, professor of tourism at Lucerne University of Applied Sciences and Arts, confirms that there is a great deal of uncertainty in the industry - we will see who is right in a few years' time. He is convinced that prices will have to be lowered significantly in order to utilize capacity. At the moment, however, the price reductions are rather small compared to the total expenditure of a ski day. "The fear is that not enough additional guests will be attracted," he says to the Switzerland at the weekend. (hae)
