Summary
A private equity-backed indoor entertainment center engaged Revenue Management Labs to strengthen revenue capture across its existing footprint while preparing for continued expansion and future franchising. The business had built a premium customer experience, but its pricing model had not kept pace with rising costs or local market dynamics. With a 10% top-line growth target, leadership needed a scalable, customer driven pricing approach.
RML redesigned pricing architecture across general admission and parties, using competitive benchmarking, discrete choice consumer research and financial modeling. The new architecture introduced market tiering, day-of-week differentiation, revised pass durations, and restructured party packages. Recommendations were projected to deliver +12% overall revenue growth, exceeding the client’s target while keeping attrition below 5%.
Challenge
Prices remained mostly flat since 2023 as the business prioritized demand protection. Meanwhile, food, labor, and operating costs continued to rise, putting pressure on margins at a time when stronger cash flow was needed to fund the next phase of growth.
As the client expanded its footprint, a largely uniform pricing approach became increasingly difficult to defend. Locations operated in markets with different customer bases, competitive intensity, income profiles, and demand patterns, yet pricing decisions had not evolved to reflect those differences. As a result, leadership lacked a clear view of where pricing was protecting demand versus where it was leaving revenue and margin on the table.
The party business compounded the challenge. Party rooms represented fixed capacity that the business carried regardless of utilization, yet weekday slots were chronically underbooked. The revenue drag was visible, but the root cause was not – it was unclear whether underperformance reflected a pricing problem, a package design problem, a food bundling problem, or simply a customer awareness gap.
Solution
The central finding was not simply that prices were too low – it was that the pricing architecture was misaligned with how customers valued the experience.
RML conducted discrete choice consumer research which revealed that the existing structure was leaving value on the table in three distinct ways. General admission customers placed meaningful value on longer visit durations, while the existing pass structure did not fully monetize that preference. Party customers showed willingness to pay premiums for weekend access, larger group formats, and bundled food, dimensions the current offer did not fully capture. In parallel, market profiling and competitive benchmarking showed that pricing headroom varied materially by location, making the uniform model too conservative in stronger markets.
These findings shaped a redesigned architecture across both revenue streams. General admission moved to market-tiered pricing, day-of-week differentiation, and revised pass durations anchored around the longer visit experience customers valued. Party pricing was restructured around day of week, party size, and food bundling tiers, converting a flat offer into a clearer tiered structure that captured customer value and addressed chronic weekday underutilization. The recommendations were stress-tested through financial modeling to assess revenue upside, demand sensitivity, and volume risk before implementation.
