Community aquatics facilities often strive to keep single-visit (daily admission) fees low to better serve the community (and the budget) by drawing more users. But in most situations, low single-visit fees actually discourage use. Ironically, the best route to attracting users and improving the bottom line is through higher single-visit fees in combination with a reasonably priced unlimited-use pass. The result is somewhat counterintuitive, but here’s why it works.
If you want more consumers to purchase what you’re selling, lower the price. If you really want lots of people to use it, make it free (or at least seem like it).
This is a lesson that traditional health clubs figured out long ago. Health clubs are built almost entirely on the unlimited-use pass concept, where the consumer pays a flat fee in exchange for unlimited usage of the facility during a specified period (generally a month, season or year). The consumer pays up front, and then incurs no fees for any individual visit.
With an unlimited-use pass, each individual visit is free. Of course, the unlimited-use pass isn’t free, but no financial consequence is associated with any particular visit. As a result, more consumers will use the facility, the same way many diners make multiple trips to the all-you-can-eat buffet, but few order a second entrée at a traditional restaurant.
No matter how low the single-visit fee, it deters use at any particular time. But if it’s “free,” consumers will use the facility whenever they have the slightest interest in doing so. In fact, unlimited-use passes can actually prompt additional usage because consumers try to use the pool more frequently in an effort to “get their money’s worth.” To really draw users to a community aquatics facility, the best approach is the unlimited-use pass.
Of course, unless you give away unlimited-use passes, you haven’t avoided the whole price issue. If you can’t convince consumers to use the facility for an individual visit, how can you sell them on an unlimited-use pass?
Actually, it’s easier. The purchase dynamics for long-term goals are extremely different than for short-term interests. Unlimited-use passes represent long-term goals, whereas single visits are inherently short-term. And long-term goals are the best product that community aquatics facilities have to offer.
Consider fitness users, whose long-term goal is the expected results of regular exercise. This is a powerful goal, and something that many people are willing to pay quite a bit for.
But what about the benefits of any single use of a fitness facility? The promises of infomercials aside, six-pack abs aren’t built in one workout. There’s always tomorrow. In fact, on any particular day, fitness users might not want to exercise at all — they may have to force themselves to use your facility instead of pursuing more enjoyable short-term interests. They want the long-term goal, but they don’t necessarily want each individual exercise session.
For recreational users, the difference isn’t quite as big, but it’s present nonetheless. These users may be purchasing the goal of a summer vacation (or other period) filled with healthy and enriching fun. That’s a powerful goal, and something consumers are willing to pay for. But on any particular day, there are plenty of other options. Some may be more expensive, but more enticing; others may be less enticing, but simply less expensive or easier (such as watching television).
Community aquatics facilities compete better based on long-term goals than on short-term interests. Selling an unlimited-use pass is about how often consumers expect to (or think they should) use your facility. Individual visits are about how often they actually do.
Even recognizing the desirability of selling unlimited-use passes, most community aquatics facilities still strive to offer a low single-visit price. While the reasons are varied, the rationale generally boils down to two factors: (1) making the facility widely accessible (that is, making single visits accessible to individuals of limited financial means); or (2) spurring use by those who did not purchase the unlimited-use pass. Both factors tend to appeal to recreation managers and politicians alike, and thus low single-visit fees are common practice.
The problem is that single-visit prices have an enormous impact on sales of unlimited-use passes, and this relationship isn’t adequately considered when setting single-visit fees.
When choosing between the unlimited-use pass and single-visit options, consumers consider their expected frequency of use and the relative prices. Consciously or not, consumers divide the unlimited-use pass price by the single-visit price to determine the “equivalent visits,” or the number of visits at which the two options are financially equal. If they expect to use the facility more than the number of equivalent visits, the unlimited-use pass is the wise choice. If not, the single-visit option on occasions of actual use is preferred.
To see the impact of this relationship, consider an unlimited-use pass priced at $40 and a $5 single-visit fee. In this case, the unlimited-use pass is equivalent to eight visits. If the single-visit fee was $10, the pass would be equivalent to four visits. At a $2 single-visit fee, it would take 20 visits to “get your money’s worth” from the unlimited-use pass.
As the single-visit fee goes down, the number of equivalent visits goes up, and more and more consumers decide that they’d be better off paying by the visit based on their own expected level of use. Because a single-visit fee discourages use on any given occasion relative to the unlimited-use pass (where any given use is free), facility usage decreases as fewer unlimited-use passes are sold.
To spur widespread use of an aquatics facility, the best approach is to raise the single-visit fee while keeping the price of the unlimited-use pass option reasonable. This will prompt more consumers to purchase unlimited-use passes. And as more consumers face zero cost of using the facility at any particular time, usage will increase along with facility revenue and the cost-recovery ratio.
If making the facility accessible to individuals/families of limited means is important, the most effective approach is a system of financial assistance, wherein those families who demonstrate need are granted a reduced price for the unlimited-use pass (not for single-visit fees). Lowering the single-visit fee does little to help families of limited means, and ironically limits facility usage overall (even among individuals of means).