Legoland owner to introduce dynamic pricing

Merlin Entertainment is set to introduce dynamic prices to combat the lower visitor numbers it has been recording post-pandemic.

The Legoland owner is currently working on introducing surge pricing at its top 20 global attractions by the end of this year before rolling it out in the US next year, Scott O’Neil, CEO, told the Financial Times.

The firm, which owns also owns Madame Tussauds and Sea Life, will charge people more to visit on peak summer weekends versus rainy off-season weekdays. Neil said the firm’s dynamic pricing model is “very intuitive”.

Merlin Entertainment has struggled to match the visitor numbers it was recording before the pandemic took hold. The firm recorded 62.1 million visitors last year, according to its 2023 financial report published today (25 March). This is around 5 million down on the 67 million who visited in 2019 across its 141 locations worldwide.

Dynamic pricing is a marketing masterstroke – if you can sell itIts revenues were up by 8.4% year on year to £2.1bn. However, the business reported a pre-tax loss of £214m, which it attributed to the Legoland attractions it built in New York and South Korea during the pandemic.

Merlin is not the only firm to be implementing dynamic pricing of late. In November last year, Halfords said it was introducing dynamic pricing in its services business to help drive stronger margins by re-directing demand towards its underused garages.

Last year, pub owner Stonegate introduced dynamic pricing in its 800 venues during peak hours. Marketing Week columnist Mark Ritson said at the time that changing prices in real time to reflect costs and demand is an ideal way to maximise profitability, but only if it is communicated effectively with customers so they don’t see it as a raw deal.

“The obvious mistake in all of this was maintaining a flat price and then putting it up when demand grew. I am not sure of the legalities involved, but putting every price up by 20p and then bringing them down when demand is lower is surely the smarter move,” he said.

“It’s always generally easier to drop prices than to put them up, and if there is one thing I have learned about pricing on my travels it’s that the way you present a price is significantly more important than the price itself.”