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ApplicationofrevenuemanagementpracticestothethemeparkindustryCindyYoonjoungHeoa,*,SeokiLeebaSchoolofTourismandHospitalityManagement,TempleUniversity,1700N.BroadStreet,Suite201,215-204-5612,UnitedStatesbSchoolofTourismandHospitalityManagement,TempleUniversity,1700N.BroadStreet,Suite201-F,215-204-0543,UnitedStates1.IntroductionRevenuemanagement(RM),oryieldmanagement,isanaccepted,essentialstrategytomaximizerevenueformanycapacity-limitedserviceindustries(Cross,1997;Berman,2005;Chiangetal.,2007).RMisademand-basedpricingstrategytocontrolforoptimalinventorylevelsandtoforecastreal-timedemand(ChoiandMattila,2006).Theairlineindustrysuccessfullyinvented,implementedandpracticedRMafterderegulationin1978,andeversince,moreserviceindustries,suchashotels,rentalcaragencies,andrestaurants,beganadoptingthepractices.Airline,hotel,andrentalcarindustriesrepresenttraditionalRMapplica-tionsbecausetheysharesimilarcharacteristics(e.g.,perishableserviceorproduct,fixedcapacity,distinctcustomersegmentation,andpricedifferentiation)(Chiangetal.,2007)andabundantpublishedresearchconsidersvariousRMissuesforsuchindustries(WeatherfordandBodily,1992;Kimesetal.,2002;KimesandWirtz,2003;Kimes,2004,2005;KimesandThompson,2004;Susskindetal.,2004;Berman,2005).ConsideringthecommonindustrycharacteristicsoftraditionalRMindustries,thenatureofthethemeparkindustrycertainlysuggestspotentialforenhancingrevenuebyexercisingavarietyofRMtechniques.SimilartootherindustriesalreadypracticingRM,thethemeparkindustryalsohasperishableinventory,highfixedandlowvariablecosts,variabledemandsandsegmentablemarkets.However,RMstrategies,forthethemeparkindustry,mustbecarefullydeveloped,takingintoadditionalconsiderationuniquecharacteristics.Forinstance,athemepark’scapacityisrelativelymoreflexiblethanthatofhotelorairlineindustries.Also,ingeneral,visitorsdonotmakereservationsinadvanceforthemeparkadmission.WhilethethemeparkindustryhaspotentialforapplyingRMstrategies,researchonRMissuesinthemeparkindustryisscarceandthecurrentstudyattemptstofillthatgap;thereforethepurposeofthisstudyistosuggestRMstrategiessuitedtothethemeparkindustry.Toestablishabasisfordiscussion,adelineationofthebasicattributesofthethemeparkindustryandexaminationofcurrentpricingstrategiesarenecessaryfirststeps.ThenRMapplicationforthethemeparkindustrywillbedevelopedbyincorporatingtwodifferenttypesofcharacteristics:commonlysharedcharacteristicswithtraditionalRMindustriesanduniquecharacteristicsofthethemeparkindustry.Inaddition,customer’sperceptionsofRMinthethemeparkindustrywillbeexaminedanddiscussedcomparedtoasuccessfulRMindustry(i.e.,hotelindustry)becausesuchperceptionsareasimportantasindustry’scharacteristicsforsuccessfulimplementationofRM(Chiangetal.,2007);IfacustomerviewsRMpracticeasunfair,theincreasedrevenuesresultingfromRMmaybetemporary(Kimes,2002).Insummary,byproposingpotentialapplicationsofRMforthethemeparkindustryandempiricallycomparingcustomers’perceivedfairnessonRMbetweenthethemeparkandhotelindustry,thisstudywillprovidethemeparkindustrypractitionerswithpracticalinsightsandtools.InternationalJournalofHospitalityManagement28(2009)446–453ARTICLEINFOKeywords:RevenuemanagementYieldmanagementThemeparkPricingABSTRACTRevenuemanagement(RM)hasbeenanessentialstrategytomaximizerevenueformanycapacity-limitedserviceindustries.ConsideringthecommonindustrycharacteristicsoftraditionalRMindustries,thenatureofthethemeparkindustrysuggestspotentialforenhancingrevenuebyexercisingavarietyofRMtechniques.ThisstudysuggestspracticesforthemeparkoperatorsforsuccessfulRMapplication.Inaddition,thisstudyexamineshowcustomersperceiveRMpracticeinthethemeparkindustrycomparedtoatraditionalRMindustry,hotelindustry.ThefindingsindicatethatcustomersseemtoperceiveRMpracticeinthethemeparkindustryasrelativelyfairpracticesassimilarlyperceivedforthehotelindustry.Thefindingsareencouragingforthethemeparkindustrybecausearelativelysimilarlevelofitscustomers’perceivedfairnessoftheRMpracticecomparedtothehotelindustrysuggeststhatadoptionandimplementationoftheRMpracticehasgreatpotentialtobecomesuccessfulasithasbeenintraditionalRMindustries,suchashotels.2009ElsevierLtd.Allrightsreserved.*Correspondingauthor.Tel.:+12152045612.E-mailaddresses:yheo@temple.edu(C.Y.Heo),seokilee@temple.edu(S.Lee).ContentslistsavailableatScienceDirectInternationalJournalofHospitalityManagementjournalhomepage:–seefrontmatter2009ElsevierLtd.Allrightsreserved.doi:10.1016/j.ijhm.2009.02.0012.Literaturereview2.1.ThemeparkindustryTheliteratureonthemeparksislimitedandonlyfewproposeddefinitionsofthemeparkscanbefound.Pearce(1988)describedathemeparkas‘‘extremeexamplesofcapitalintensive,highlydeveloped,user-oriented,man-modified,recreationalenviron-ments.’’Thisstudydefinesthemeparkasanaggregationofthemedattractions,includingarchitecture,landscape,rides,shows,foodservices,costumedpersonnel,andretailshops.Themeparks,ingeneral,applythemestoprovidevisitorswithinterestingexperiencesdifferentfromdailylife.TheearliestthemeparksintheUSbeganoperationinthelasthalfofthe19t