More Nights at the Opera

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After a rough season, the Washington Opera Co., in Washington, D.C., thought about raising ticket prices again. However, after carefully reviewing ticket-sales history, manager Jimmy Legarreta realized that the box office routinely turned people away on Friday and Saturday nights, while tickets for midweek performances went unsold. Apparently, all theater seats are not equal.

Legarreta had stumbled onto a system practiced religiously by airlines, called "yield management": maximizing revenue by pricing tickets according to the demand for each seat at each show time.

To put his theory into effect, Legarreta and his staff sat in every one of the opera house's 2,200 seats and gave each a value based on the view and the acoustics. With his revenue goal in mind, he played with ticket prices until he arrived at nine different levels, up from five. In the end, the Washington Opera raised prices for its most coveted seats by as much as 50%, but it also dropped the prices of some 600 less desirable tickets. The end result was affordable opera for more people, as well as a 9% revenue increase during the following season.

Copyright 1998 G+J USA Publishing

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