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Comment by RandallBrown | Hacker News Reader

A park in Indiana, Holiday World, did something sorta the opposite.

They figured out how much the average guest paid for drinks, then raised the ticket prices that much but made all drinks free in the park.

It was a huge success. People expect ticket prices to go up occasionally and they expect to be gouged for drinks. By getting "free" drinks, it felt like a huge value. (At least for me when I visited.) I bet it made food sales increase too, because now people wouldn't have to pay for a drink too.

Not sure if they're still doing that, but at the time they also had free sunscreen all over the park. It's an amazing little park.

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Growing up in Indiana: I don't remember much about different theme parks, but I remember that I'd always end the day dehydrated and thirsty--but not at Holiday World. And regardless of the actual amount of money, as a kid it removed friction from getting a drink, I didn't have to go ask my parents for money. (Just drink for free from the water fountain! Sure, maybe as an adult, but it's definitely easier for kid-me to drink a yummy sugary beverage than water.) And that contributed to having a better time there.

And so we went to Holiday World way more often than King's Island, which was almost an hour closer to us (maybe Holiday World was just a better park too, maybe not--like I said, I don't actually remember much about various parks).

I've got my own biases [1], but Kings Island has always been a bigger/better park than Holiday World, but yes that free soft drink package makes a lot of sense on why it would be more appealing to all sorts of families regardless of whether the park is better or not overall.

[1] I worked food service at Kings Island for a summer and a half way back in High School.

For fun, I asked my mom if she remembers why we went to Holiday World more. She mentioned the free sunscreen (she didn't remember the free soft drinks[1]), and said that Kings Island was too crowded.

[1] and I hadn't remembered the free sunscreen until I read the parent post.

Ive been saying for years that airlines should do this. Add the price of an alcoholic beverage to everyone's ticket and then give those who want one a "free" drink. I never understood why they opted to go with ruthless cuts and declining customer experience.

Because most people search fares online and book the cheapest ticket.

That actually does not disprove the GP's point. People do this when the price difference is too high, or when they don't know of any difference of value on both options.

Currently air travel is a completely homogeneous service. There is basically no difference from one company to the other, so it makes no sense not to go with the cheapest (even then, the flight schedule matters). That is not reason for a company to not differentiate itself.

(But I am very skeptical that a free drink would be enough of a difference.)

>Currently air travel is a completely homogeneous service. There is basically no difference from one company to the other, so it makes no sense not to go with the cheapest

Where are you getting this? Tons of airlines provide varying levels of service/amenities. Only thing that is homogeneous is that you get from A to B.

I think you are onto something there, but you should have phrased it another way.

E.g. I think airlines were caught in a devils agreement with air travel search engines.

They gave them access to their flights, and the search engines had to find the simplest qualities to compare fares on. That usually meant price.

So you have tons of airlines with no clear value proposition differences in a search result, and it leads to the equilibrium being a devastating fight for lowest price.

Getting from A to B is the most important service an airline provides. The seats are always cramped, so the degree doesn't matter terribly. Even on their website, I can't search by "flight has power outlets". Nor is the wifi speed available, or even consistent. Maybe the problem is that airlines don't have a value prop relative to each other at all.

It might well be, but we can't be sure, because just like you said that info is not available in an easily comparable form.

It's gonna be interesting to see the growth of new airlines now that COVID is a thing.

Low prices seem to be a given, but customers are expecting service that accommodates their new fears related to air flight.

Wow, I have a very different experience than you. I've noticed vast differences in airlines, how cramped they are, the cleanliness of their planes, the amenities inside the plane, the quality of the food offerings, even the attitude of the staff . And, having experienced all these different airlines, when I'm on a route i've been before I'm apt to pick the airline that gave me the best experience if other things are relatively comparable (price/time)

Even on the same airline, often there are partnerships. For example JAL/American and ANA/United I'm make sure to book the fight run by the Japanese partner not the American partner and the experience will be night and day. The Japanese plane will be clean the USA plane will be less clean. The Japanese staff will be friendly and service oriented. The USA staff will make me feel like I'm a burden on them and they'd rather be doing anything than their job. The food, even though it's airplane food, will be higher quality on the Japanese airline. Etc...

You can't search for "Flight has power outlets" because the airline doesn't necessarily know that the flight will have power outlets until the day of the flight.

They aren't going to advertise "Flight has an 80% chance of having power outlets". And likewise, they don't want to deal with customers complaining that a power outlet flight did not, indeed have power outlets.

> Currently air travel is a completely homogeneous service. There is basically no difference from one company to the other

Southwest has a pretty loyal following since you can "refund" a ticket for Southwest credit good for a year.

Alaska and Delta don't charge for bike fees (they're just priced like ordinary luggage).

And aside from maybe 1K members, I don't know anyone who enjoys flying United.

Do they? I certainly don't behave that way. Fares are definitely something I factor in heavily, but a $10 difference isn't something I consider significant.

Long before that point, I start looking at other factors like departure and arrival times and whether I like the airline.

For example, I just did a quick search, and for $25 more total round trip, I can get nonstop flights both ways. I didn't specify nonstop as a search filter (since there are few nonstop flights between these two cities), but now that I know it's only $25 more, I'd pick that.

Most people dont fly often enough to have brand preferences about airlines.

Many people want the absolute cheapest ticket because having an expensive ticket doesn't really improve your life at all, at least on domestic flights.

I'm tall, so more legroom is essential when I fly. That means I usually need to upgrade (if I can't swing an exit row seat). So yes, an expensive ticket really does improve my life, for a short period of time.

Because they are competing against other airlines to show you the lowest ticket price. Price has been shown to be the only factor most people consider when buying airline tickets.

Amusement parks are less competitive for entry price. Most cities are lucky if they have one within driving distance. Flights on the other hand are very competitive on price.

I've heard about people paying for booze on planes. But for some reason in all the dozens of times I've flown. Never paid to get drunk on a plane? Think the last flight I took was 3 years ago, so don't know what has changed. I do only fly on the west coast though.

I think there's free alcohol on international flights, but you pay for it in domestic flights.

Generally in my experience with international, you get one or two alcoholic beverages served with each meal (even Spirit airlines will give you a glass of red/white which I thought was impressive considering how stingy they are), and I think the flight attendants are allowed considerably more leeway on handing out free drinks. I've only paid for drinks on international a handful of times.

International flights are also significantly more profitable than short haul, so that might have some impact too.

As someone who doesn't drink alcohol, I hate that idea.

Hawaiian Airlines offered free Mai Tais when getting close to HNL, for a long time. They used to have metal forks too. And they had great food too, included! I didn’t mind paying a premium to fly Hawaiian. Then they implemented cost cutting measures. Now I just fly whoever is cheapest.

Yes! Hawaiian was great for years, then they reduced the service considerably. Now, even locals who want to support locals don't fly Hawaiian because there's cheaper flights that have about the same service level.

> I never understood

The airlines are masters at A/B testing and figuring out what works best, as the industry is notoriously low margin and very cut-throat. You can bet that they price things this way because it works better.

BTW, people pay a lot extra for first class tickets and love the "free" drinks. Different classes is how the airlines optimize profits from different market segments. They're very good at this.

"Masters of A/B testing" is, in my opinion, a gross overstatement. However what is true, is that a large number of people will automatically choose the lowest available option among airfares, without considering comfort or amenities. When your product is efficiently lined up against your competitors, sorted by price alone, (i.e. Expedia, Kayak...), then being second-place by $3 is enough to impact sales volume.

It's one of the primary reason airlines have moved so much of the total cost out of the ticket price, and on to additional fees: luggage, food, seat selection, printing a boarding pass, etc.

That underestimates how sophisticated the airline's slicing and dicing of the market is. Ever wonder why no two people on a flight paid the same price? Why there are a proliferation of classes on board?

Beyond economy class, of course the price is less of a factor (didn't realize that needed to be stated).

"No two people paid the same price" is a myth, most certainly not true. Ever book 2+ seats at the same time?

Airlines do use yield management techniques, however, which results in pricing that changes for the same resource over time. That's not A/B testing, and like anything that relies on a lot of forecasts as inputs, bad forecasts up front often lead to sub-optimal revenue totals.

> Beyond economy class

economy+ class

business class

first class

> Ever book 2+ seats at the same time?

Ok, ya got me there. Ever book 2 seats not at the same time?

> often lead to sub-optimal revenue totals

Airlines are not stupid with their operations management, and expend a great deal of effort optimizing revenue.

Are you telling me you've surveyed every person on the plane to know for absolute sure nobody paid the same price? Do you think they create a unique fare code for every passenger? Of course they don't.

I never said airlines are stupid, I stated an opinion they are not "masters of a/b testing". You've not provided any evidence to convince me otherwise.

> Are you telling me you've surveyed every person on the plane to know for absolute sure nobody paid the same price?

I read it some years ago in an article about airline operations management and how they optimized their fares, which varied constantly through the day and the days of the week. Then there are all the various discounts people can get, frequent flyer prices, rebooking fees, etc. It's all based on heavy use of statistics, which is a more complex version of A/B testing.

> I never said airlines are stupid

You suggested they often make bad forecasts, implying they didn't know what they were doing.

But you may believe whatever you like.

> Ive been saying for years that airlines should do this

Alcoholic drinks are free on every one of the ~100 long-haul international flights I've ever taken, even in cattle class.

For a while, Porter Airlines (Canada) would offer free coffee + free cookies out of their terminal in Toronto. They would also offer you a free beer (a full 500ml, not the 341ml one) on the flight if this was an afternoon/evening flight. I feel that a lot of their expansion was just the word of mouth "OH AND THEY GIVE YOU FREE COOKIES". Their flight might have been a bit more expensive, but the amount of good will they got from those free items was huge and for a while Porter was really what people preferred.

Then they sold their terminal and started leasing it, and now suddenly, no more free coffee and free cookies. I don't know if the free beer is still around but for a while we had everyone complain on how "they no longer have free cookies". And then we just stopped hearing about it because people just didn't care about Porter anymore, you would just get the cheapest flight and that would typically not be them and it's not like they were offering something special anymore.

It looks to me that this was probably not a super huge expense that was probably giving them a much higher ROI than the pure $ value of what it cost them.

That's sad. I used to go to NYC from Toronto for work once every month or two and I always flew Porter, and it was the best. The cookies and coffee was a nice touch. Comfortable lounge, etc. But that was 8, 9 years ago, and the last time I flew Porter was to Burlington, VT (before they cut that route) to go skiing, and they were in the process of renovating the lounge and changing things around. There was still free coffee but the shortbread cookies were nowhere to be seen; I could see things were changing.

That route was the best, BTW; I'd leave my house at 6:30am or so by taxi, get an early morning flight to Newark, take the train to Penn station, walk from there to the office and still arrive before many of my NY coworkers were at the office. Once we got bought by Google I found I could still make it to the Google NYC office in time for breakfast service. Memories :-)

For what it's worth, those were also some of the most delicious prepackaged cookies I've ever eaten. It's not just that they were free.

> Their flight might have been a bit more expensive,

So they weren't free. They were just priced into your ticket.

note: I'm not saying they didn't generate good will. Just say if the flight was more expensive then a competitor then you were actually paying for those things and it was just fiction that they were free.

As someone who doesn't drink alcohol it drives me crazy when the only option is to subsidize other's alcohol (because alcohol is marked up so heavily).

For people like me a paid-alcohol policy is a feature, not a bug.

Same for paying for luggage. I'd rather pay for bags because it means when I travel light that I'm not subsidizing other people's bags.

Isn't this already the case? I order a beer or two on most flights and don't think I've ever been charged.

Long haul flights have free alcohol and what not, but a lot of low cost companies charge for anything they can.

Because people will buy the ticket which is $1 cheaper.

I stayed in a hotel in Chile many years ago that included dinner in your room (anything off the menu) and the entire mini bar. It made for a great, positive experience rather than the usual situation of griping about mini bar pricing. Surprised more places don't do it, at least for non-alcoholic drinks.

You do not want to distribute free beer (or any alcoholic beverage) to hundreds of people confined together for hours and with limited toilets, as in a plane.

By what metric was it a success? Drinks, even non alcoholic ones, have phenomenal margins, and if you're stuck in a theme park or sports stadium, for hours, you basically have to purchase one. I'm a bit surprised this makes financial sense unless they really went for it.

For similar reasons, restaurants are hurting extra hard right now because people don't order drinks as often with delivery or takeout.

Well this is based on average visitor, so it certainly makes sense—the revenue is more reliable and they can simplify vendors and improve the quality of life, too.

If they were hoping to increase per capita profit year over year without increasing ticket prices, yes, that was a mistake.

It greatly increased guest satisfaction and I would bet it helped their bottom line a little too.

There will always be people that stick to free water or don't drink anything. By building the drink price into the ticket price, you're essentially getting everyone to pay for a drink.

> free water

This is often not a thing in closed environments like theme parks

Which ones? At least several of the largest theme parks chains do offer free water, you can google it. Many allow bringing refillable bottles. I’d speculate it might be a medical liability issue to not offer tap water to guests in a closed environment summer activity.

None of that changes whether it’s profitable or a good idea to give away water or drinks.

https://www.themeparkinsider.com/flume/200908/1350/

> They figured out how much the average guest paid for drinks

It sounds like the margin was part of the ticket price increase. So it was a success in that more people came to the park because they thought they were getting a better deal and were happier about it because "free drinks".

It’s a success if more people show up. You’ve heard of sales, promotions, and loss leaders? Having good margins on drinks doesn’t mean it’s more profitable overall to charge for them, when having more people there means they’ll purchase more tickets, more food, and more souvenirs. Plus offsetting the ticket price by the retail price of a drink is likely to mean the move was instantly financially profitable, by getting 100% of people to “pay” for the drink, where before not everyone might.

they save on the staff selling drinks too, at Holiday World the drinks dispensers are littered around the park in the same way water fountains are at others

(except six flags where they'll try and gouge you there too)

They are still doing both.

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