Dynamic Ticket Pricing in Sport: An Agenda for Research and Practice

Abstract

For decades, the airline and hotel industries have regularly changed prices to keep pace with fluctuating levels of consumer demand. This demand-based approach to pricing is referred to as revenue management. Meanwhile, the sport industry has traditionally underpriced tickets using a cost-based approach in order to maximize attendance and promote fan satisfaction. However, as operating costs have grown, sport organizations are now forced to reconsider these conservative pricing practices. Subsequently, in 2009, the San Francisco Giants were the first team to utilize dynamic pricing, which is a strategy that mirrors the revenue management approach. While data supporting or refuting the reported benefits of this approach in sport remains sparse, the current paper utilizes the research on revenue management to develop an agenda of considerations regarding the use of demand-based ticket pricing strategies in sport. The paper is designed to guide researchers as they begin to explore the strategy's myriad of critical (and yet unexplored) issues. Additionally, practical implications of adopting this pricing strategy in sport are considered.

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