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OM in the News: Capacity Planning for Harry Potter’s World

March 21, 2016

harry potterUniversal Studios Hollywood is putting a price tag on the demand for fun, reports the New York Times (March 21, 2016). The theme park is anticipating huge crowds for the April 7 opening of the Wizarding World of Harry Potter. If you want to be one of the first to experience it, be prepared to pay more than if you want to go, say, on a slow Tuesday in September. Such variable pricing is nothing new to airlines and hotels. They have long charged higher prices on holidays and during popular seasons. Disney, as we noted in our March 1, 2016 blog is also experimenting with yield management.

Under the new Universal pricing policy, tickets bought at the gate remain $95. But visitors who book tickets online for low-demand days — such as a weekday in February before Harry Potter opens — can save up to $20. During weekends and peak demand days during spring break or summer, parkgoers save only $5 by booking online.

Harry Potter has already been wildly successful at Universal’s other parks. After a Harry Potter ride made its U.S. theme park debut at Universal’s Islands of Adventure here in Orlando 6 years ago, attendance jumped 30%.  But the initial experience was less than magical. The main attraction, a simulated broom ride, left entire families with motion sickness. At one point, the line to get into Hogsmeade village was 9 hours long. Yes, nine! When my family and I toured the attraction, there were no lines–just a mass of humanity that could not move at all.

Universal seems determined to make this introduction smoother. It chose a quieter time of year for the unveiling (spring instead of summer). Management started letting in small numbers of people in February for “technical rehearsals.” Not only is demand-based pricing designed to prevent overcrowding, but 50% more capacity has been added to the Hollywood Hogsmeade.

Classroom discussion questions:

  1. Describe yield management.
  2. What else can Universal do to improve throughput?

 

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