Dynamic pricing usage in sports for revenue management
Abstract
Purpose
The purpose of this paper is to examine the extent to which dynamic pricing is utilized in North American professional sports. While industries such as airlines and travel services have employed dynamic pricing for decades, professional sports is only now starting to adopt it.
Design/methodology/approach
The authors survey and interview high ranking executives and managers in North American sports organizations. A total of 72 managers and executives from the four major North American professional sports leagues as well as other sport properties were surveyed. Descriptive statistics and a basic regression provide insight into perceptions v. actual practice among sports organizations.
Findings
While most sports organizations perceive high usage of dynamic pricing within their organization, current procedures lag. Nearly 70 percent of respondents believe that their organizations frequently or always apply business analytics to dynamic pricing, but only 30 percent update their prices daily. Fully 50 percent of organizations do not automate decision-making processes, which is a hallmark of dynamic pricing. The perception of constant use of analytics in dynamic pricing intensifies as job title increases.
Originality/value
As one of the initial surveys looking at the usage of dynamic pricing in North American professional sports, this study provides a glimpse into both the perception and the reality. It suggests that there is still ample room for improvement.
Keywords
Citation
Bouchet, A., Troilo, M. and Walkup, B.R. (2016), "Dynamic pricing usage in sports for revenue management", Managerial Finance, Vol. 42 No. 9, pp. 913-921. https://doi.org/10.1108/MF-01-2016-0017
Publisher
:Emerald Group Publishing Limited
Copyright © 2016, Emerald Group Publishing Limited