Pricing Confidence, Parity, and Behavioral Strategy with Evan Reece, CEO of Truest.me, former CEO Liftopia, Catalate

Evan Reece (00:00)
Parity is a long-term investment in consumer confidence that when they search for something they should buy it.

Evan Reece (00:06)
Especially if you run an attraction that has a lot of repeat visits.

Evan Reece (00:09)
If the first time they buy, they see different prices all over the place, that's going to shift their confidence in making any giving buying decision in the future.

Evan Reece (00:17)
And you're going to have to spend more marketing dollars.

Evan Reece (00:19)
This is about honing consumer confidence.

Evan Reece (00:21)
The dollars will go to the place that deliver the people who convert the highest.

Evan Reece (00:26)
And if that's the LLM, then that's the LLM.

Evan Reece (00:29)
But it reinforces the need to have tremendous hygiene between distribution points.

Evan Reece (00:34)
Because the LLM will find with the inefficiencies.

Evan Reece (00:37)
How do you identify the consumer behavior you wish to see?

Evan Reece (00:42)
And then how do you build pricing strategies to try and drive that behavior?

Evan Reece (00:45)
And then how do you measure how successful you are doing?

John Pendergrast (01:03)
Today we're joined by Evan Reece, an entrepreneur whose career has been defined by one big idea. Pricing isn't just about numbers, it's about shaping behavior. Evan is best known for pioneering real-time pricing strategies in industries like ski resorts. You might have heard of Lyftopia or Catalate, where he showed operators how to balance demand, value perception, and guest satisfaction.

But what makes Evan's perspective so valuable for attractions is that he's not just a pricing guy. He's a behavior strategist. He spent years helping organizations rethink the way

Tim Samson (01:28)
Okay.

you

John Pendergrast (01:39)
they set prices, not to punish demand, but to create the patterns they want to see in guest And here's what's interesting. He doesn't start with fancy algorithms. He starts with what he calls pricing hygiene.

Tim Samson (01:48)
.

John Pendergrast (01:53)
The unsexy but critical work of making sure your prices are consistent across every channel where your tickets are sold. Because the truth is, you can have the most sophisticated dynamic pricing on your website, but if you have 150 other websites selling your tickets at different prices, you're undermining your entire strategy. Today, Evan runs his own advisory practice and is also building new technology ventures aimed at shifting consumer behavior in other industries.

Tim Samson (02:00)
Okay.

John Pendergrast (02:20)
For our audience, his insights come at moment. Attractions everywhere are rethinking their 2026 pricing models right now. Evan, welcome to Signal.

Tim Samson (02:22)
Okay.

Evan Reece (02:31)
Thanks for having me. Happy to be here.

John Pendergrast (02:33)
what we typically do here as we get started is we break it into

I'm going to start with what's part one, which is calling pricing hygiene comes first. And I'm just going to kick off the first question and then we're just going go back and forth. And I can guarantee you that what's going to happen is we're going to end up on some sort of like rabbit trail.

⁓ asking about all these different things because we're legitimately interested. This is good thing about being podcasters now because we're now professional podcasters is ⁓ that ⁓

Tim Samson (02:54)
This is...

⁓ Don't

don't throw the P word around we're just podcasters. I don't think we're professional. Yeah

Evan Reece (03:02)
Semipro.

Semipro.

John Pendergrast (03:06)
Yeah, we're professional because we get paid to do this, but it's not that there's anyone watching it. We do, yeah.

Evan Reece (03:09)
Bye.

Tim Samson (03:12)
we do? We're

getting paid for this?

Evan Reece (03:16)
you

John Pendergrast (03:17)
Lost

I checked, yeah. Depending on how well it does, we'll see if that continues. Okay. All right, Evan, you've said pricing hygiene matters more than dynamic pricing itself. What does bad hygiene look like in practice for an attraction operator?

Tim Samson (03:19)
Thank

Evan Reece (03:24)
Yes.

Yeah. I mean, and I have to say it's funny because I spent so much time trying to convince people to like, be more scientific with their pricing strategies, you know, dynamic pricing being one of them. And how, as I stepped into my advisory work, how I'm really going back to basics and sort of saying like for folks, even who are doing dynamic pricing, like, Hey, let's take a step back from dynamic pricing and think about your overall approach.

John Pendergrast (03:41)
Yeah.

Evan Reece (03:56)
And you sort of hinted at this in the intro, but I think that a lot of people sort of forget about consumer behavior when they're building pricing strategies. And in the end, this is all about consumer behavior. mean, the vast majority of people have never purchased something on their own website before. And even though they have shopping behaviors of their own when they're

John Pendergrast (04:05)
Yeah.

Evan Reece (04:18)
stuff for travel or whatever. They sort of forget that other people are like that in the same way. to me, bad pricing hygiene you have a really thoughtful pricing strategy approach on your direct site. you also have a bunch of other things in the market that might undermine that approach and it could be, legacy agreement.

that you have in place that gives someone, and by the way, some of these distribution points, that's the way they operate still. ⁓ but, but if you have a price point out in the market, that is lower than the price point and people can buy direct, you know, the market's going to find out about it. And it's, it's sometimes pricing alone. Like, Hey, I'm taking a look to it, buy a ticket into November 17th. What's the price right now?

Tim Samson (04:46)
Mm-hmm.

Evan Reece (05:03)
but it's also customer service policies. It's how the marketing messaging sort of supports that. it's also, if you are doing dynamic pricing, sort of what fleet or dynamic pricing are you doing? you following a strategy where it starts low and goes high, or are you dropping last minute and angering customers who've bought already? and I think like the broader.

Tim Samson (05:11)
So. Thank

Evan Reece (05:22)
⁓ way to think about this is like, do you build organizational alignment around pricing strategies such that everybody's rowing in the same direction? So, it's my, literally my first client when I started doing my own. Yeah. Yeah. It was amazing.

Tim Samson (05:23)
you

I was I was just gonna ask you about this because I remember the conversation from Arival That you spent like you you spent eight

minutes and you found all these things undercutting your own site

Evan Reece (05:41)
Exactly. And they are incredibly bright people with a amazing attraction in a world-class city. And I was brought in to help them think through their pricing science and how to become more scientific with it. And literally just in the research phase of maybe signing up with them, I...

went to their website, I searched for a ticket for some date in the future, and then I Googled them and went to a few other sites, did the same search, and found lower prices on literally the first five websites that I checked. And yeah, in that case, you know, it's funny, because the dynamic pricing guy, or having been that historically,

John Pendergrast (06:15)
Oops. ⁓

Evan Reece (06:22)
My first bit of guidance was, you need to stop your dynamic pricing. Um, because the way that it's happening in the way that it's propagating out and the, and the, lack of hygiene and control that they had over, know, prices in real time availability of prices in other channels meant that they're undermining themselves. And where we started was just to sort of get that under control. So take a step back from being truly dynamic.

Tim Samson (06:26)
I'm not gonna

Don't do it.

Evan Reece (06:47)
and then observe shift in pattern after they knew that for a certain period of time, everything in the future was going to be the same price on distribution points as it was on the direct site. And they said they shifted direct bookings from 45 % to 55%, like pretty much immediately. And so it's not to say that dynamic pricing and more sophisticated pricing methodologies aren't

tremendously impactful, but if you're undermining yourself and you don't have those bases covered, then it's sort of like, it's better to walk before you run.

John Pendergrast (07:22)
Okay, I mean that it's fascinating because I mean it just proves that there's like there's a science to it, right? There's this it's not just a one size fits all. But I have a question. We're on the first question and I'm immediately gonna go off stream. Here we go. Evan, like, How did you end up here? Like, how did you end up being the pricing wizard that you are? Like, how did this happen? Like, where did

Evan Reece (07:33)
Yep.

John Pendergrast (07:42)
Did you wake up at your five and go, you know what I want to be? I want to do dynamic pricing.

Evan Reece (07:42)
Yeah.

No, absolutely not. I had like

zero perspective. So I mean, my career journey was sort of interesting and I'm pretty long winded, so you'll probably cut most of this out. So I got a liberal arts degree and I graduated in 2001 and I was an international studies slash German studies major. So like,

John Pendergrast (07:54)
you're not nearly as long-winded as I am.

Tim Samson (07:55)
No, we don't. We don't. No.

Evan Reece (08:09)
I had a liberal arts degree inside of a liberal arts college. I was exposed to a lot of different things, but had like zero things that I was actually good at. It's like, I guess I'm half decent at learning new things like that. So I had a very thin understanding of a bunch of stuff and I decided to move to California because my older brother was there and I had a free couch to sleep on. And I was halfway cross country when September 11th

John Pendergrast (08:13)
you

Right.

Evan Reece (08:36)
And so I arrived in San Francisco with a liberal arts degree six days after September 11th with no job, luckily a couch. And then I did a bunch of temp work, which was hilarious. There's a bunch of funny stories in there. The nice thing about temp work though, even if you're doing the most menial task at any given company,

Tim Samson (08:51)
Thank

Evan Reece (08:55)
is that you're getting exposure to a lot of different things. And it's for someone who has zero context for what work really was, it was kind of good to take a look. It was like two weeks stint at JCPenney printing from microfiche so they could look at old data. ⁓ And then a few weeks doing customer service for Zappos before they were good at customer service. And it's actually funny because it's in that book. But anyways.

I ended up getting a job at Hotwire, which is a travel company owned by Expedia. the funniest thing for the young is in the group. yeah, yeah, exactly. The, though it was amazing. Yeah, exactly. The, ⁓ but what was hilarious is, ⁓ some, one of my brother's friends from college was there. but they had realized they were spending so much on temp workers.

Tim Samson (09:28)
For the young for the young ins in the group. It's how you how you actually purchase stuff, right? Yeah with our diet with our dial-up modems and

John Pendergrast (09:32)
Yeah.

Evan Reece (09:49)
that they'd be better off if they just hired an internal temp. And so I was hired as a floater. Like I would go do three weeks with marketing and then I'd do two weeks for customer service and then four weeks with finance and Totally. I mean, again, it was always the most menial stuff, but as someone who was like curious, but really didn't know what he wanted to do.

John Pendergrast (10:01)
That's a heck of an education.

Evan Reece (10:09)
It was great exposure. if you look at the people at Hotwire were incredible. I mean, they were super bright, but also fun. They like took work seriously, but not themselves seriously. And I ended up getting moving into the hotel department at Hotwire and started just in sort of customer support and then worked into sort of account management and then later sales.

And one of the things that was incredible about them is they did an amazing job at, logging consumer intent data, adjacent to pricing and revenue, for hotels. That it was really easy to observe and find opportunities, pricing opportunities for hotels that would dramatically increase their performance. So as a market manager, I could call, you know,

Tim and be like, Hey, it looks like your price is slightly out of the band of consideration. And if you just drop your price for the 14th by $3, you'll see a dramatic increase in your booking volume. And it worked. so that sort of introduced me to what I think of as like relative metrics. and the hotel world and the e-commerce world is full of relative metrics. You have, you know, at the property level, you have things like Revpar, which allow people to

Tim Samson (11:12)
you

Evan Reece (11:20)
think about occupancy and a rate at the same time through the lens of future opportunity the property for any given date. And it allows you then to compare different hotels with one another and then different markets with one another to how the industry maps trends. And then on the e-commerce side, there's the marketplace relative metrics, which is conversion rate. So what percent of people who come to the store actually buy something. But then there was this intent data that was deeper.

Tim Samson (11:41)
Okay.

Evan Reece (11:48)
which is, you know, they, they log an instance of someone looking into Las Vegas for January 5th on November 1st. And they log all of those and then you see performance

all the OTAs have this metric book to look ratio. So it's like bookings over instances of willingness to book. And there's the global metric, but there's also the like date specific metric.

Tim Samson (12:10)
you

Evan Reece (12:11)
And that

was where we were finding all the opportunity to use price to shift consumer behavior. so anyways, I became kind of obsessed with just how powerful it was because it worked. And then I was lucky enough that flew me up to take some more, revenue management training courses at the Expedia office in Seattle. and then I just ended up liking it. And again, I didn't like.

Tim Samson (12:16)
Okay.

John Pendergrast (12:20)
Yeah.

Tim Samson (12:27)
you.

Thank you. you.

Evan Reece (12:33)
recognized at the time it was something that I was into. It just was cool to look at data, make suggestions and see just in consumption fat. then the founding story of Lyftopia of came out of that. ⁓ I was managing some ski markets on behalf of the hotel team there. And my co-founder and I were looking at those markets and

At some point there was a discussion around, man, they should sell lift tickets with these hotel rooms. And it turns out no one was doing that. And what we later discovered is that no one had sold a lift ticket on the internet before, which was kind of crazy. This was 2005. insane is that the

Tim Samson (13:09)
Yeah.

Evan Reece (13:12)
benefit of hotels and...

Tim Samson (13:14)
and

Evan Reece (13:15)
air is they get some predictability of revenue,

the behavior was always there. Like people bought hotel rooms before they went before the internet. and part of the reason was that hotels might sell out, with ski lift tickets, there's never a sold out sign at a ski resort. And so we were like, well, in order to shift this behavior, we would have to give consumers a reason to shift that behavior. And that was pricing.

and so Lyftopia started as this idea of being like a marketplace for ski lifting as it sits on top of a,

foundation of pricing

John Pendergrast (13:45)
It's so

Evan Reece (13:45)
strategy.

John Pendergrast (13:45)
It's so

like attractions, I I think I wrote my first, I want to say that around 2005 is when I wrote my first ticketing system. And that was the first one that was an online ticketing system. And everything before that point in attractions and tours was really, you call in. Or buy it at the window, right? Like that was how it worked.

Evan Reece (13:53)
Yeah.

Yeah.

Yeah.

John Pendergrast (14:06)
And I remember back around that time writing that first system and it being like this, we were giving coupons out on that website, $5 off, $10 off, just so you'd buy online. What a weird world, right? And just to try and incentivize to try and get people to actually buy.

Evan Reece (14:11)
Totally.

Tim Samson (14:12)
Yeah.

Evan Reece (14:17)
Totally. Yeah.

Yeah, I mean, that's

dynamic pricing with consumer behavior. I imagine ahead of building that, also we saw in the ski industry, which was other discounts that existed in the marketplace that really weren't beneficial to the supplier. So there's a thing where if you filled up your gas tank at certain gas stations in certain cities, you'd get two-for-one lift tickets to ski areas.

John Pendergrast (14:24)
Yeah.

Yeah, of course.

Tim Samson (14:36)
Thank

John Pendergrast (14:43)
Great.

Evan Reece (14:44)
Well, everybody needs to drive to a ski area is and everybody needs gas. So all you're doing is subsidizing people getting more

Tim Samson (14:45)
Ha!

Evan Reece (14:51)
The or which station to buy the gas at like

John Pendergrast (14:50)
Right. There's lots of examples of that.

Evan Reece (14:54)
The or which station to

John Pendergrast (14:54)
There's lots of examples of

Evan Reece (14:55)
you saw it early too, but even today, you know, it depends on the attraction, the location and the specific business, but there are many businesses that could and should be a hundred percent online and they're not. And sometimes that is tied to this organizational commitment to.

John Pendergrast (14:57)
Yeah.

or not.

Evan Reece (15:16)
this holistic approach, but also.

John Pendergrast (15:18)
Agreed.

Yeah, agreed. Well, thanks for answering the off the trail question there. It's nice to get a little context

Evan Reece (15:24)
Well, it's a really long answer. Yeah.

John Pendergrast (15:26)
It's nice to get a little

Evan Reece (15:26)
Well, it's a really long answer.

John Pendergrast (15:28)
see. And now I'll hand it back to you,

Tim Samson (15:32)
Yeah, so

I'm gonna I'm gonna go I'm gonna go off our off our questions since we're off to many ways and we seem to be covering everything so Gerry don't Gerry's our producer Gerry don't don't kill us So on that note, Evan we've a bit about price parity in general specifically have these other OTAs or discount sites like Groupon and

Evan Reece (15:36)
Yeah.

Tim Samson (15:54)
We haven't gotten into like pricing strategy like the different like, you know, flat tier dynamic fully done at all those different things. But, just in general, most attractions have some mix of pricing. Like it's usually not all one, one type or the other, but you do have systems out there like, like GroupOn, Booking.com, different things that can't ingest dynamic pricing or, or, or certain types of pricing. so we've talked a little bit about parity and.

Evan Reece (16:00)
So.

Tim Samson (16:19)
I think it'd be great if you could explain in your words what price and parity is across there and And really how to approach it from an attraction or tour to make sure that everything's in line

Evan Reece (16:31)
Yeah, mean, parity is an interesting concept because most people are familiar with it in the hotel space. It was like, hey, Expedia has the same price on any given hotel room as the hotel site and any other site. That wasn't always true. And that's why kayak exists, know, like disparity was a...

function of lack of consumer confidence because there were different prices all over the place and then kayak showed up and Hone to that consumer confidence into marketing dollars spent in their channel, but in any case I think about Parity not through the lens of just like the price is the same But it's it's like price for commitment from the user with like restrictions applied to the user

So like you could ticket that's $40 the non-refundable. Or you could have a ticket for $40 that's usable any day. And that's out of parity, even though the price is the same. Because the restrictions on the ticket are different in those two cases. And so I think

If the channel sells in the same way as the mechanisms that I'm selling on my site, then for any given search, the price should be the same. frankly, the customer service policy should be the same. So can I refund it? Can I move to a different date? All that sort of But it's not to say that those channels that

Tim Samson (17:35)
Okay.

Mm-hmm

Evan Reece (17:53)
sort of sell in a bit of a non-traditional way, can't have an impact that is positive even if the price is different. Hotwire, which where I got my career started, that was a lower price than if you bought direct. You bought a hotel and you got a lower price than if you bought direct, but didn't know which hotel it was before you bought.

So you're buying a four star hotel and it might be any of these four properties and it's non-refundable and you

Tim Samson (18:13)
You

Evan Reece (18:17)
can't change dates and you can't change who's checking in and all that stuff. sometimes marketplaces are reaching different consumers, but sometimes about different commitments. And so with something like Groupon, you probably remember, we used to say, Hey, look, it's not like Groupon can be a great channel.

What do you have for sale there? Is it a four pack that like, instead of just having a ticket that can be used whenever you could sell something that isn't a strategic upsell with a different type of commitment in exchange for a different incentive that you're providing the user, which is typically price.

Tim Samson (18:50)
Yeah, I mean those channels like group honor are great for an operator for such perspective when you're Trying to reach a different market or you have a different different entry product Within that space. Yeah, I remember we did some restrictive I Think was Halloween stuff like knowing no one came on a Friday. So we would put Friday night tickets, you know on Groupon just to just to drive that and it was

Evan Reece (18:57)
Yeah.

Totally.

Tim Samson (19:13)
It was successful because it drove the revenue within the park. So think it's about finding that that right mix. But on pricing parity, you have 40 here, you got 40 here. Consumer shop by price. So how do you get them? Consider the restrictions on the ticket or. Doesn't not matter.

Evan Reece (19:16)
It's

Totally.

Well, they also shop by restriction.

They also shop by restriction. know, like they are, I mean, think of yourself buying a hotel room. Like you go and you look for a price and you see what's included. And then you go around and you look at other places and see what's included. but by the way, I'm going to steer away slightly now. Just because, but, ⁓

John Pendergrast (19:45)
you

Tim Samson (19:48)
You're like, I'm over

this, we're moving on.

Evan Reece (19:49)
No, no, no, no, but, but steering

back to the back to Groupon and marketplaces in general and third party distribution. and it's funny because my experience, I ran a marketplace, which was liftopia.com and I ran a rez tech that gave direct sellers the same exact tools as we had on liftopia.com.

So I have a pretty unique sort of like understanding of the tension between third party distribution and direct sales. But I think there is a large sort of like sometimes deserved, sometimes not a negative perspective of third party distribution in this space. Whereas like, ⁓ like dang, I have to be selling through insert marketplace here. I don't want to call out any given brand name.

But it actually comes back to the parity question, which is like, if you are in control of your pricing and you have hygiene around it and the price point isn't undermining your site because it's at parity, then you're sort of rowing in the same direction as your different distribution points. And then you are leveraging their audiences. And in theory, the like math of it all is if you're doing this perfectly.

John Pendergrast (20:45)
So.

Evan Reece (20:53)
You know, a lot of people think of like a third party piece of distribution as costing the commission and like a direct sales being free, but it's not true. It's like, it's just where the dollars are spent. with third party distribution, you're spending in margin the direct sale you're spending in marketing. And so if you're doing this super well, then the cost of the transaction as measured by commissions through third party.

should more or less match the cost of driving a specific transaction through your correct site as measured by spend on Google or Facebook or whatever. And if you're in control of your parity, you're actually in a good spot to leverage marketplaces in a fair way to both sides. But that's how I see

Tim Samson (21:31)
Thank

Yeah, I

I agree with you that they get a bad rap and I think it's about optics and the way that the way that operators think about it. So so you're using these OTAs or third party sites and. It feels like their hands in your pocket. Because you think of your expenses like around marketing, customer acquisition costs, all of those things as just things you need to do to have the business right? So you don't correlate those directly.

John Pendergrast (21:40)
video.

Evan Reece (21:42)
Yeah.

So.

Tim Samson (22:01)
across from each other. And I think that's that's something that as operators, you can look a little more diligently at and use the channels that are right for you.

Evan Reece (22:10)
Yeah, exactly. And if you're going to use the channel, figure out how to use it such that, the vast majority of the time it's, it's rolling in the same direction as your internal efforts. the other thing that you go back to parity, and it's sort of, it's a bummer because, parity is a long-term investment in

consumer confidence that when they search for something they should buy it. They search especially if you run an attraction has a lot of repeat the first time they buy They see different prices all over the place or they see you drop price last minute that's that's going to shift their confidence and making any giving buying decision in the future and You're gonna have to spend more marketing dollars

Anytime someone says, when the question is like, should I buy right now? When it's yes, like your conversion rates are high, your return on marketing spend is high. When it's, hmm, then you're spending more dollars to create that transaction. anyways, like the, the thing is like, is, is any given decision I'm making with regards to pricing and distribution, undermining consumer confidence.

that they should buy right now. And if so, then maybe shift.

John Pendergrast (23:14)
So

along the same line, hotels have been doing this kind of stuff for years. mean, it's so that only recently did I start deciding to call direct back to hotels and say, OK, actually, can we get a better pricing? And the answer is, generally speaking, not really. sort of, not really. If you're standing right at the desk, we did this just a couple weeks ago. were dropping our kids off. ⁓ And they gave us a price.

Tim Samson (23:18)
So.

Evan Reece (23:20)
Okay.

So.

Yeah. ⁓

Tim Samson (23:37)
you

you

John Pendergrast (23:40)
that was a little bit less,

but then there's points that you get on some of these services like hotels. And so we decided to buy it right there in front of them on the points. And then they comped us an upgrade, which was their way of kind of approaching that. I'm like, so this has been sorted out in hotels for a long time. Everyone's comfortable with it. Hotels are comfortable with it. Consumers are comfortable with it.

Evan Reece (23:43)
Yeah.

Yeah.

John Pendergrast (24:01)
What are the structural differences that make this harder in attractions? I have my own theories, which I'm more than happy to go into, but it's not really me that needs to answer the question.

Evan Reece (24:10)
Well, no, but I like the theories, because since you've heard, I can drone on and on.

I think the one of the hard parts and I'll stop after this so that you can give me some of your theories. It's like the

Tim Samson (24:18)
you

Evan Reece (24:20)
Hotels, unless you're staying at a...

an aspirational property, whatever that means. Like it's kind of just where you're sleeping. It's not why you're taking the trip. It's not why you're making the buying decision. It's like, it's, it's a necessary requirement to the trip that you've decided to make. it has to be good enough. And you might spend on special occasion type stuff or special level of service that, most attractions are kind of like, if they're destination attractions,

John Pendergrast (24:25)
Yeah.

Tim Samson (24:26)
Thanks.

John Pendergrast (24:30)
Right. Yeah.

It has to be good enough.

Yeah. Yeah.

Evan Reece (24:48)
They're like, like if I'm in Paris, I might do some stuff, but it's not why I'm going to Paris. Sorry, like there are certain things that I would do in Paris that I'm excited about because it is the thing like the Eiffel Tower or the Louvre or whatever. Yeah. for a local attraction.

John Pendergrast (25:00)
Yeah, it's a terrarium.

Evan Reece (25:05)
It's the only buying decision. It's like the way you access the thing that you're deciding to do, which is a little unlike the hotel,

John Pendergrast (25:10)
Yeah.

there's a lot of different ways that you can sell third party and using cross channel kind of things. There's a lot. There's the small operator, local OTA kind of idea. There's just so many different opportunities out there. It's been interesting to me to watch, we actually did a publication about four years ago, maybe it's almost five years ago, that we called ⁓ OTA Responsibly.

Evan Reece (25:15)
Yeah.

Yeah.

Tim Samson (25:26)
Okay.

John Pendergrast (25:33)
which was, know, if you have a gap we're generally filling 80 % of our seats and the last 20 % of our seats are kind of open,

Evan Reece (25:38)
Yeah.

Yep. Yep. Yep.

John Pendergrast (25:42)
go and fill those and go ahead and use an OTA to do that.

And we had one customer that made 30 % more that year because they went and that. And it just really changed the outlook for them as a company. And it's really fascinating watching those kind of things. But then as I step back and I look at it, I go, a lot of these OTAs, especially the really big ones.

Evan Reece (25:53)
So

John Pendergrast (26:06)
are these unicorn status, these giant, giant companies that are taking hundreds and hundreds of millions of dollars of investment. And then they come and they dictate terms. they dictate, sometimes they take your marketing and they do a lot of things to drive their revenue forward.

Evan Reece (26:08)
Yeah.

Tim Samson (26:15)
you

John Pendergrast (26:22)
And I go, that makes it so much harder for the operator who's maybe a $5 billion operator, maybe a $10 million operator to really feel like they're playing on a field that is going to meet their needs. And then they're paying 30 % for the privilege. And I agree with you, that 30%, I used to listen to Chris, former.

Evan Reece (26:28)
to

John Pendergrast (26:41)
CEO of Rezdy talk about this he's like these are marketing dollars you're spending you're not like this isn't a big deal this is marketing dollars but it's really hard to stomach that giant company over there making so much money off the back of what you think is your

Evan Reece (26:47)
Yeah. ⁓

Tim Samson (26:49)
Okay.

Evan Reece (26:57)
good news, which takes us back to the hygiene stuff is like that they've become friendlier and the capabilities have gotten better. by the way, they are tremendous at driving consumer behavior because their UX is incredible. Um, they do have their own, um, relative loyalty. you know, I remember

Tim Samson (26:58)
Thank you.

John Pendergrast (27:05)
Yeah.

Yep.

Evan Reece (27:20)
They're growing here now, the Get Your Guide guys have done an amazing job. And I've really got Get Your Guide the last time I was in Europe, or I was in Amsterdam with my wife. And I was like, my gosh, I could do my whole visit on Get Your Guide. especially if you're a small operator who doesn't...

John Pendergrast (27:35)
Yep.

Tim Samson (27:40)
you

Evan Reece (27:42)
have tremendous brand strength or your product is somewhat fungible, meaning like there are other people who provide a similar service. And even if you're special, like through the eyes of the consumers, like you kind of have to be in those marketplaces. but back to my first client, there were no like terms dictated by these marketplaces that they had to have lower prices in those marketplaces. They were just doing it to themselves. And it was

partially because of some older school distribution points that are sort of pen and paper, like sign the steel is for a year, but some, was just like latency between pricing updates made on their own site and how they flow down through to their distribution points.

Tim Samson (28:15)
Thank

John Pendergrast (28:19)
Yeah.

I I don't remember, I like to give credit where credit's due, but I don't remember who wrote the article, but there was a study done about how back in 2008, the financial crash of 2008, how OTAs were actually one of the big reasons that people went back out and started going to their local attractions. And people started traveling again, but they actually, the way that they did it actually rebooted the market again and brought attractions back in.

Evan Reece (28:40)
Totally.

Tim Samson (28:46)
Okay.

John Pendergrast (28:48)
And I think that's really fascinating because I mean, it is an ecosystem that we live in and it feels a little bit like there's just trust issues.

Tim Samson (28:49)
you

Evan Reece (28:56)
Yeah,

and it's fair, you know, like

Anybody who's run a marketplace business and this is sort of what I'm encouraging people to understand about this hygiene stuff is like every single marketplace, their relative success is entirely dependent on the quality of the inventory on their shelf. so the early marketplaces, they were smart

Tim Samson (28:58)
Okay.

Thanks watching.

Evan Reece (29:15)
I don't think they were predatory. It was just like a function of like the internet was new and therefore some things were different. like, if you look at early hotel distribution on the internet, so you have hotels.com, you have Expedia.

Tim Samson (29:16)
you

Evan Reece (29:27)
You have a bunch of other sites, orbits, travel velocity, whatever. And the like broad stroke approach from the OTAs at the time was, Hey, hotel, here's the internet. There are a bunch of people who aren't comfortable using the internet or putting their credit card on the internet, but we have a customer set that is comfortable doing that. So you should give us some inventory at good prices such that you can tap into that audience. Actually super rational. they did.

Tim Samson (29:33)
you ⁓

John Pendergrast (29:42)
Yeah.

Evan Reece (29:52)
And it was akin to like prior to that hotels would sell different inventory in places where there was more control around it. Like the example that I was given when I was at hot wire was in the Chinese speaking newspapers in San Francisco. The hotel would have special deals in that newspaper because unless you could read Chinese, like you couldn't get access to the deal. So it was a siloed, know, distribution strategy. And so when

Tim Samson (29:54)
Thank you.

Okay. Hmm.

Evan Reece (30:18)
when the OTAs first came out, that was rational, it made sense. But then you have the brands that said, well, this internet thing seems to be working. I'm gonna sell on my own website too. Totally rational. And then what the marketplaces said was, well, hey, hotel, your website, that's your most loyal customers. That's your premium guests. We have a bunch of customers who have yet to, they don't care about brand, they don't know about your brand.

Tim Samson (30:26)
Thank you.

John Pendergrast (30:26)
Yeah.

Tim Samson (30:33)
⁓ sir.

and

Evan Reece (30:40)
We'll have them decide where they're going at. We just have a lower price here to pull in some of this audience to draw them in because they're not your, you don't want to have it be on your website because then you're charging less to your premium customers. And that actually makes sense if Google doesn't exist. But Google does exist, it's becoming more popular. And then.

Tim Samson (30:59)
Yeah.

Evan Reece (31:03)
You know, so that, that argument made sense because it's like, here's a distinct audience in a distinct place, but all of a sudden it's, there is no silo. Like the internet means everybody can find it. I mentioned kayak before, but like kayak emerged and they tapped into this lack of consumer confidence. And as the marketplaces got bigger, they looked a little bit more predatory as their rates were better than what the direct sellers were, were offering.

Then kayak shows up and sky scanner and, um, site 59 or not. Anyways, it doesn't matter. and they would take an unconfident buyer who's saying, I buy right now? They're warm a search. They'd see a bunch of results. Turn them into a confident buyer that this is actually the best price or is the best price. Even if it's these other ones, I know it's the best out there. And then they click off and they arrive confident.

Tim Samson (31:40)
you

you

Evan Reece (31:55)
which means that the conversion rate on that traffic from kayak was higher than what they would be get out of Google because they had honed the intent down into dates and pricing confidence. And then they sold the price line for a billion dollars, you know, like, so anyways, then parity emerged, but kayak is still super relevant the age of parity because there's so much latent distrust in any given price point on the internet that all of us are.

Tim Samson (31:57)
Thank ⁓

Hmm.

John Pendergrast (32:06)
So.

Evan Reece (32:23)
know, shop around.

John Pendergrast (32:25)
But we're coming

to a weird kind of like singularity in pricing. So I don't know if you've been tracking this with Shopify, but Shopify and Perplexity signed a deal. And in that deal, what they did was they said, we're gonna give you the inventory of every single store that we have from a product pricing perspective. And we're gonna allow you to pull it into your LLM.

Evan Reece (32:39)
interesting.

Interesting.

John Pendergrast (32:45)
and you're gonna be able to search anything you want and the store no longer matters, right? Like the store no longer matters. It's completely agnostic now. It's just whatever

Tim Samson (32:51)
You

John Pendergrast (32:55)
the best price is or whatever the best features are or whatever advantages you can have. That's coming. Like retail is about to do it and that's coming. What does that do?

Evan Reece (33:01)
Yeah. Yeah, totally.

Tim Samson (33:04)
you

Evan Reece (33:05)
I mean, well, I don't want to be one of the many people who claims to be an expert on AI. I would say what the thing it doesn't change is that this is about honing consumer confidence. So like the dollars will go to the place that deliver that deliver the people who convert the highest. And if that's the LLM, then that's the LLM. But

Tim Samson (33:14)
No? Come on.

John Pendergrast (33:19)
Yeah.

Yes.

Evan Reece (33:33)
It reinforces the need to have tremendous hygiene between distribution points because LLM will find the inefficiencies.

John Pendergrast (33:41)
So then the really practical question then is how is an industry, do we prepare for that eventuality? Because if it happens in retail, we can guarantee that within the next five to 10 years, it's going to happen in our space.

Evan Reece (33:51)
Yeah. I mean, what's interesting about it is, does that mean...

There are no OTAs, meaning like, because there's, if any given operator is confident that the LLM will find them as the only source of truth on the thing that they are selling, then they can be the only distribution point. Now, if, yeah.

John Pendergrast (33:58)
Yes.

I think that's a monetized equation though.

I think LLMs are looking for ways to pay the bills and keep the lights on. And they're going to have to do Google style money to do it.

Evan Reece (34:18)
Bye.

without an app. Well, and

if you think about like all the, you know, if natural search came first and paid search came second, and there's been some bleeding edge people who are taking advantage of natural search inside of LLMs, like guess what's coming next? Like it's paid search, you know? So, I think the other thing it might not change,

Tim Samson (34:37)
Mm-hmm.

John Pendergrast (34:37)
Yeah, Yeah. Yeah, yeah.

Evan Reece (34:44)
is, for the, operators attractions that again, don't have truly distinct differentiated experiences that they're offering. like, if you're one of the bike tour operators in wherever, then

John Pendergrast (34:55)
Right.

Yeah, they're all functionally the same.

Tim Samson (35:00)
Yeah.

Evan Reece (35:01)
So like the less differentiated you are, if there are numerous versions that look like you, then the probability is you're going to have dozens, if not hundreds of distribution points because you're just trying to tap into demand for your commodity. Whereas without a doubt, and that definitely is a thing. The other end of the spectrum is Disney.

John Pendergrast (35:17)
Well, it's potentially a race to the bottom on price, right?

Evan Reece (35:25)
You know, like, like where the brand strength is so strong, there is not a fungible, experience that someone can go to. Obviously there are other like products that have their own, you know, like Universal offers an amazing experience too, but Disney has tremendous brand strength. And then some things like look like you'd think that globally they're not large, but locally they are strong brands and actually ski areas are like that. Like they have.

Tim Samson (35:49)
Hmm.

Evan Reece (35:50)
you may not know about.

Ragged Mountain in New Hampshire. But that is a large, yeah, there you go. That is a large local brand. If you know about ragged, then you know about ragged. It's not the same as having like a Holiday Inn across the street from a Vermotta.

John Pendergrast (35:54)
everybody in New Hampshire does.

yeah, I mean, and listen, there's opportunity to switch in between those metrics too. Like it's like the old Rolex problem, right? Like Rolex was every man's watch back in the early days of Rolex. Everyone had a Rolex. And now they are like, you buy a Rolex and wait six months to a year for delivery because it's like buying a fancy car, right?

Evan Reece (36:17)
Yeah.

Good point.

Tim Samson (36:23)
Hmph.

Evan Reece (36:25)
Totally.

that is to race to the bottom point. It's like, you know, the top of the market, you can differentiate bottom of the market. can race to the bottom. The middle is always a little tough.

John Pendergrast (36:35)
Right, yeah.

Tim Samson (36:36)
so you talked about kind of interchangeable experiences where this is the same as something else that's in the market. But then, I've seen these hyper saturated markets, Chicago, LA, New York, that have great variety of experiences, but they're all priced the same. Like everyone feels like there's...

some upper limit on what you can charge for a 45, 60, 90 minute experience. And then as soon as one person challenges that, everyone adjusts their price.

Evan Reece (37:04)
Yeah.

Totally.

All right, now I'll go down to some random granular dynamic pricing thing that is tied to my career There are a of businesses that absolutely must pay attention to what their competitors are doing. Because if you don't, you're just gonna get lost. And in the hotel world, there was a saying back when I was in it, where if you were a three-star hotel in a market that had

you know, a handful of three-star hotels, the saying was, from a pricing standpoint, you can only be as smart as your dumbest competitor. Because you kind of had to do what they were doing. what's interesting about your example, Tim, is like, sometimes people get so caught up in that, that they fail to see any differentiation between themselves and what else might be purchased in the

And there's a lot to be unlocked inside of that data that I mentioned at the front end that, that at Hotwire where I did a lot with and that, Lyftopia we did too, which is if you sit there and say, how should I price? Well, where is my competitor pricing? Then you're always going to price where your competitor is. But if you say, how should I price relative to my performance in the eyes of aggregate demand?

then you'll start to make tweaks based off of your true standing in the eyes of the consumer base as opposed what your competitors are doing. Now that requires gathering up that consumer intent data. And I know, I imagine you all have some of that inside of your platform. I know at least Get Your Guide has some internal tooling on like indicating for operators.

relative demand volume into specific dates. But I really encourage people to look at that stuff when they have access to

Tim Samson (38:37)
I've always found pricing...

As an operator to be somewhat, I don't want to say a touchy subject, but it is a touchy subject. And it's a bit of a black hole that I think a lot of operators don't understand. And because of that, they undervalue their own experience because one, that one they're scared to isolate the consumer base, the customers that visit their attraction.

Evan Reece (38:57)
Yep.

Tim Samson (38:59)
I think there's this internal phobia that I don't have all the information I need to make risky decisions with pricing because it will ultimately affect the outcome.

How do you overcome that? Like I know how we overcame that with some orgs, but as an operator, there's an advocate that says we need to increase our price, 50%, right? And we may do that over a couple years and Everyone else in the org is saying we can never sustain that, our guests will riot, they'll.

they'll turn on us and move away. But in the world where there's data and there's intent data and you have competitor data and you look at the experience and say, our value proposition is this because we offer these other things compared to similar type experiences in the market. How do you get everyone on board and how do you mitigate some of that risk when you're not sure?

Evan Reece (39:30)
Totally.

One of the things that makes pricing so scary for people is that historically speaking, you make a pricing decision once a year you're stuck with it. And what that means is like you are literally like ruminating, ruminating, ruminating, place your bets. Exactly.

John Pendergrast (40:12)
Well you printed your brochures and you put them in

the hotel, right? Like that's it. Yeah, yeah.

Tim Samson (40:16)
Or the signs, the physical signs, right?

Evan Reece (40:20)
Exactly.

Tim Samson (40:21)
You have to print tickets for the OTAs, like all of these things you used to have to do,

Evan Reece (40:25)
And you have your paper contracts and you have

everything. And I think the fact that that was true, people still view we're going to decide our price as like a one time a year thing or in the example that you provided a like trajectory of like, what's the value of our experience? What is our price point? And by

Retaining that mentality that is tied to having to print the price on the brochure. You're really giving up a lot control and like dynamic pricing Dynamic means you can change it Which implies a lot of control now and this gets us to some of the like there there's a variety of pricing philosophies out there So I'm

Broadly speaking, think about how, and you mentioned this in the intro, like how do you identify the consumer behavior you wish to see? And then how do you build pricing strategies to try and drive that behavior? And then how do you measure how successful you are doing?

John Pendergrast (41:20)
Evan, I think there's a lot of like, I think so many pricing decisions even today when we definitely are starting to head into a more data centric thought process. Like post COVID, I'm seeing more more focuses towards data is important. We need to think about the data and actually analyze it, start having our KPS, understand our business, you know, those kinds of things. But even now, I still see a lot of what I would consider to be fear-based pricing.

Tim Samson (41:22)
you

you

Evan Reece (41:43)
definitely.

John Pendergrast (41:44)
which is

my competitor down the road is this price. Okay, and how does your competitor compare to you? Well, they actually don't. not a great attraction compared to us. We have all this other stuff. But we're still going to price exactly as they are because we're going to lose business otherwise.

Tim Samson (41:44)
you

Well.

John Pendergrast (41:57)
I've had experiences over the years of people being like, we can't go over $40. That's the hard limit. There's no way to do that. And then within a year and a half, we're selling for 75 and saw an increase in traffic, not a decrease, and effectively owned the region. But they had to take the plunge, right? And I know some operators are of the opinion that like, listen, we're a one and done, like this is

Evan Reece (42:12)
Totally. Yeah.

John Pendergrast (42:23)
bucket list item, you're never gonna come back, we gotta get this pricing right. And there's other operators that are very impacted by tour groups, where if you raise it at 25 cents, you're just not getting that tour group, they're gonna go to somebody else, and there's like these kind of lock-ins. But by and large, I just see that fear is the thing that seems to control a lot of the pricing discussions, and preconceived notions.

Tim Samson (42:41)
I just want to add to that a bit like from the operator perspective. You you you think you have this upper tolerance on what your your customers will allow you to do with pricing right? And I think in some aspects you're undervalued. You're undervaluing the value prop that they have. So you go through every year and you say OK, well our costs are increasing this because of inflation, cost of living adjustments, all these things. So I'm going to go through and I'm going to increase pricing 3%.

And then you sit back in the, groups that are the decision makers, stakeholders within these attractions. And you say, I think that's all that the market can maintain. Well, you've essentially never increased your price. You've adjusted it for inflation, but you've never actually increased the price in the more that we invest within these attractions and the more that the value proposition increases.

John Pendergrast (43:18)
there.

Evan Reece (43:21)
Yeah.

Tim Samson (43:31)
Right, you're adding new rides, you're adding new tours, you're getting new boats, you're you're doing all these things that are enhancing the experience. You end up not adjusting. For that.

Evan Reece (43:40)
Yeah, and.

I think going back to the brochure thing and tying it to this, like people think about product price. And these days it's not about product and price. It's product price commitment. What is the commitment that the user is making to get access to my product and for what price? ⁓ Like

Tim Samson (43:59)
Mm-hmm.

John Pendergrast (44:00)
Mm-hmm. Mm-hmm. Mm-hmm.

Evan Reece (44:03)
If I were to say like, well, what's the cost of a plane ticket? It depends. It depends on where you're going, when you're going, when you buy. Like, who you want to fly with. And I was having a discussion with a client today about hotel pricing strategy and

Tim Samson (44:10)
Who you want to fly with?

Evan Reece (44:18)
Like how some people, the opposite problem can also occur where people are like uncomfortable pricing lower because they feel like it'll chip away at their brand. And if you equate product and price, then I can see why. But if you look at like five star hotels in Vegas, there are certain days when they're 1600 bucks a night and there are certain days when it's 120. And that's not a brand degradation thing. That's a pricing strategy thing. Tim, we saw that you saw this a bit when we worked together, but like this.

fear of pushing price up as measured by product equals price and omitting the like commitment component people from going up, but it also prevents people from going down. And I think that in most places, like there's a lot of danger in averages and in pricing, it's tremendously so. So like you say, like we're to raise prices by 3 % this year. What does that mean? Like, are you going to raise all prices 3 %?

Are you gonna raise the window rates to 3 %? and there's a lot of granularity between like, okay, we're gonna move our window rate from 40, and we talked about this when you were first a client. Hey, move your window, like just as a thought exercise, what happens if you move your window rate from 50 to 150? Say, well, if product equals price, then everybody gets pissed off. But if you say, what?

It's not 150. It's 150 if you don't buy in advance. Check out our website. You can get tickets for seven bucks. Like there are eight remaining on the 15th. You should get them for seven bucks. By the way, they're going to go up after that. that is why there needs to be this organizational commitment around like, one, do we believe there's an opportunity to be more scientific with our pricing?

Two, what's our philosophy? Three, what are the tools we're using to deploy it? Four, how are we going to measure it? And then all baked into this hygiene that we started with.

Tim Samson (45:56)
Yeah.

John Pendergrast (45:57)
You know,

this is on topic but slightly off topic in some sense. You remember two or three years ago Disney published, they cancelled all their memberships, like they cancelled all their passes. And then they doubled the price and then they sold out in like minutes. And they came out with this crazy statement that said, we still have not found the upper bound of what people are willing to pay for our product.

Evan Reece (46:07)
Yeah.

Tim Samson (46:07)
Mm-hmm.

John Pendergrast (46:21)
And I think most people that saw that just went, well, they're Disney. Doesn't apply to me. They're Disney. But I think there's a missed point there in that that applies to us, very heavily applies to us, that most of us have no idea what the upward bound is because our assumptions are wrong or our stomach is too, we're too worried about what might be the ramifications.

Evan Reece (46:30)
It definitely does. Yeah.

And the downstream or associated challenge of that is if you're not confident in testing the upper bounds, then you're also not confident in testing lower bounds that might shift behavior that might benefit you similarly. And frankly, doing those together is the way that this all works well. in order to offer someone tickets six months in advance for 73 % off.

Tim Samson (46:58)
Okay.

Evan Reece (47:11)
is by being able to have those prices graduate up in a controllable and knowable way such that when you get last minute, you already have a massive base of business and your rate has moved up to 150 bucks or whatever it

Tim Samson (47:12)
Okay.

John Pendergrast (47:24)
So you're essentially, mean, Evan, mean, there's a lot of algorithms here. There's a lot of math. There's a lot of data. There's a lot of things like that. But in some senses, you're a behavioral scientist, right? Like it's like, right.

Evan Reece (47:33)
Yeah, like, I don't write algorithms. You

Tim Samson (47:35)
Yeah.

Evan Reece (47:37)
know, like, I just think about how do we shift behavior? And then how do we give organizations confidence to make decisions that might do so? And that you don't need to have

tremendous science, like you don't need to have the latest and greatest algorithm to test these methodologies in a way that will show very real results.

Tim Samson (47:58)
don't need AI to do pricing well Right, it can help and it's a buzzword and everyone wants to talk about it, but you don't need AI to do pricing well

Evan Reece (48:01)
No. Definitely not.

Yeah, and

if you try and use AI before you have a philosophy...

John Pendergrast (48:11)
Well, it's like anything you try to do with AI that you don't give it enough information. It'll hallucinate.

Tim Samson (48:12)
Huh.

Evan Reece (48:16)
Exactly. What are the goals? I don't know.

Tim Samson (48:17)
Right, but.

But just

Evan Reece (48:20)
Here's my data.

Tim Samson (48:21)
to kind of build off this, you know, we've talked about testing the upper and lower bounds and where you can go with price and finding that based on my experience with working with different people and then experience throughout my career. I think the the older an organization is, the harder it is for them to.

ingest dynamic pricing do different things and Part of that is because of the risk associated with Changing everything so so we've talked about pricing and how you price things, but we haven't talked about The the coupons and the promotions and everything else that you put in the market that adjust pricing, right? So when we talk about hygiene and parity It's what the consumer is paying after all the discounts promotions and everything else, right? ⁓

Evan Reece (49:00)
Totally. Yeah, and I include

those discounts in the hygiene argument. Like if they're unfenced discounts, then anyone who knows that they can get it will get it instead of paying the other price.

Tim Samson (49:06)
Yeah.

And then the other thing that I've run into just kind of as a talking point, I've had the opportunity to work with attractions that have multiple locations in different cities, different markets, the whole thing. In too many times they go in and say, this is our price. We have determined that this is our price for this, this experience, right? Or this is our pricing structure. Every market's different.

Like I remember, you know, there there's one particular attraction that I'm thinking of the we're charging like $80 in one market and $30 in the other market for basically the same experience, right? Because that's the tolerance within those. Or another one of their markets. It was just driven by. Everyone wanted to feel like they were getting a better deal than everyone else, right? It's this it's this I'm getting a better deal than you are.

Evan Reece (49:51)
Totally.

Tim Samson (49:54)
So as long as there was a discount on it, didn't matter what the upper threshold was.

Evan Reece (49:59)
Yeah.

Yeah. And there are inevitably some limits to both ends of this, right? Like, like a water park at $1,000 a day, like, and then you say, yeah, but it's 98 % off. Like, obviously, that's a silly thing. But then the other end, yeah, exactly. But then the other end of the spectrum is similarly ridiculous, which is like,

Tim Samson (50:14)
But how many people do you need at $1,000? Because people will pay it.

Evan Reece (50:22)
Hey, if you buy a ticket for January 17, 2032 right now, you can get it for $3. and then all of this ramps based off of relative cost of thing relative of ease of access to thing, relative aspiration of the thing in the eyes of the consumer base, blah, blah.

Tim Samson (50:37)
Mm-hmm.

Evan Reece (50:39)
but actually, this one thing came up as you were going down that path and also talking about AI. I think sometimes like doing more of something is not better. And I think there's a lot of danger in. know, a lot of people, if you read their sort of most likely AI driven LinkedIn.

bait posts about dynamic pricing. They'll start talking about personalized pricing Let's say like well well Tim has a different tolerance than John and therefore like we should give him the price that's appropriate to him I Think that is such a terrible idea and the reason I think it's a terrible idea is squarely tied to

John Pendergrast (51:05)
Yes.

Evan Reece (51:21)
consumer confidence. So if I believe that someone out there might be getting a better price than me, then I'm not going to be confident saying yes to the question, should I buy right now? So I'm going to shop around more. So you're going to spend more in marketing dollars.

John Pendergrast (51:34)
so I'm gonna dive in here, this is where I think we have two real markets where I look at and I go dynamic pricing. And if I was to just grab anyone off the street and say dynamic pricing, they're gonna say one word, and that is airlines. And arguably, their amount of rage around airlines pricing, which is very personalized.

Tim Samson (51:48)
Mm-hmm.

John Pendergrast (51:55)
quote unquote pricing and also quite predatory in the way that it or the way it feels is very predatory versus hotels and others that do dynamic pricing better. Like it's that perception component and that is everything.

Evan Reece (52:04)
Yeah. Yeah.

Yeah.

Tim Samson (52:10)
You don't know what the price is with an airline though. That's the missing piece. Like you don't know what the upper limit is. If you tell people what the upper limit is.

Evan Reece (52:13)
Yeah.

it

Yeah. And I do think that the other one that gets a lot of like that is in the minds of consumers. When you mentioned dynamic pricing is Uber, concert tickets and Uber. And it was interesting to rapid fire some things. Concert tickets, most of the revenue management and pricing occurs in the secondary markets because those products can be resold. And that wears a lot of the housing also occurs.

John Pendergrast (52:26)
Concert tickets.

Tim Samson (52:29)
Hmm

John Pendergrast (52:33)
Yeah.

Right. Yeah.

Evan Reece (52:42)
with with uber you know when they launched surge pricing you know unfortunately for all of us who had been in pricing forever on the like how do we use incentive to drive behavior as opposed to how do we leverage behavior to make more money look like jerks that were in pricing and had they just branded it slightly different like uber's launching incentive pricing so if you buy a ride two hours in advance you'll get a better deal than if you wait it's the same thing but

John Pendergrast (53:05)
Yeah.

plan ahead pricing.

Evan Reece (53:07)
Yeah, and

Tim Samson (53:08)
Right.

Evan Reece (53:09)
it's like, what behavior do you want to encourage? In their case, it's different than airlines though, because when you need a ride, you need a ride. Like when you're shopping for an airline ticket, there's like some amount of, okay, I need to go on a flight, but it's later. And to Tim's point about

John Pendergrast (53:21)
You're trapped.

Evan Reece (53:25)
him saying like there's, isn't a published rate. Like here's the price of the flight. If you don't buy it before you go people basically generally accept how airlines price right now, even if they hate it. but where airlines benefit, is that their inventory is knowable and limited.

So like people have seen instances where they didn't get on the flight that they wanted. And that's a driver of behavior in addition to the pricing strategy.

Tim Samson (53:45)
Okay.

I want to go back at something that you said, because I I understand where your point was on it. And I I differ slightly on it because but I think the outcome is different. We wait, we might we might. John and I still need to fight. We said we were going to fight one time. We never have yet. Yet. So we were talking. You mentioned personalized pricing. And I think with the context that you mentioned, it was what is

Evan Reece (54:00)
You gonna fight? No.

Tim Samson (54:14)
You know, what is John's threshold threshold to pay for this experience? I think personalized pricing is kind of the next place where we're going with pricing, but not necessarily in that context, more in personalized packaging and then right sizing price for that package. so, so there's a slightly different context around that. And data plays an important role in how do I service that to you? Right? Like,

Evan Reece (54:18)
Yeah.

Okay.

Yeah.

Tim Samson (54:39)
You understand who you are. You understand who you're coming with. Like there's lots of different factors. But that in itself is incentive. Like you can get all this stuff together for this price and you're like, that sounds reasonable. We'll do it right.

Evan Reece (54:52)
Yeah,

and I appreciate that you're totally right and I shouldn't have been so black and white on something that is pretty gray. underlying point that I'm trying to make is people who try to use more science and pricing to like be sneaky with consumers to make more money off them.

John Pendergrast (55:11)
get

punished.

Evan Reece (55:11)
get punished and sometimes unfortunately the LLM doing your shopping for you may be the first time that the travel industry recovers from the disparity that occurred in the year 2000. You know, like, like, like some of these patterns are so long and so enduring that they're generally accepted as truth. And it takes like some massive shift in tech to make that different.

Tim Samson (55:14)
huh.

John Pendergrast (55:33)
Yeah.

Evan Reece (55:35)
And I agree with you, Tim, like if you know the customer, so you then provide them more value and an incentive to like, you know, buy that value, then there's nothing wrong with that. It's more about like, ooh, how do I trick John into paying more than Tim?

Tim Samson (55:49)
Yeah, well, I mean, and

you're you're seeing the recourse of that with like these drip pricing laws that are coming all over the place. I've talked to a number of attractions that want to implement like credit card fees, percentage fees on the thing. You know, I don't really I don't think that's a good approach. But however you want to do that, it's one of those things where I get really irritated when I go into restaurant and there's a surcharge. Right. Like like just just put in your price.

Like I understand what it is, but then on the other hand, consumers go, well, I don't want to pay $25 for a hamburger. Right, but I'll pay 17 and then I'll pay a $10 surcharge.

Evan Reece (56:18)
Yeah.

John Pendergrast (56:21)
Yeah, except, so I I look at this is gonna be funny thing, but McDonald's kiosks are like this weird little bellwether of things. First off, they probably have one of the best UIs I've ever seen for purchasing. And it's like everyone else is playing catch up. ⁓ And then at the same time, I was looking at one the other day and there was no combos on the front page, if I recall correctly.

Evan Reece (56:21)
Yeah.

for the day.

Tim Samson (56:32)
Rats.

Evan Reece (56:35)
Yeah.

John Pendergrast (56:42)
And I'm like, this is such a divergence from what we've done for years, which is I'll have combo three. And yet there's this experience mentality of I want something that's unique to me. And now that's kind of gone into pricing. So it's like, we're going to do dynamic pricing or we're going to do personalized pricing. Well, that personalized pricing is because I want to have a hamburger I don't want fries. I'm going have a milkshake and I'm to have some sort of like other, other item and make my own quote unquote package.

And that seems to be what they're trying to do on those kiosks more and more is to make that ability to add on and package yourself much, much easier and more fluid. And then there's opportunity for pricing.

Evan Reece (57:18)
I was gonna say like your first point is what's most critical to know, which is their UX is amazing. was a period of time when operators like, well, the person's buying the ticket, but we also want them to buy these other things.

John Pendergrast (57:24)
It's true.

Evan Reece (57:33)
And it's like, okay, well, let's do add-ons. Okay, like add this on, add that on, add that on, add that on. If you do that without amazing UX and your business has a ton of intent that doesn't convert and you're dependent on, you know, three to 8 % of your traffic converting.

Like you're, you're torching the people who will definitively buy one thing, but definitely don't want anything else in the hopes that you turn some of them into the one person who buys everything together. And back to the Lyftopia founding story, I guess I misspoke slightly. There were some Lyft tickets that had been sold on internet before via Expedia in a hotel booking flow. After you get out, they say, would you like to buy some lift tickets?

Tim Samson (58:15)
Mm-hmm.

Evan Reece (58:17)
And what Expedia saw is that the revenue increase associated with the lift tickets sold was more than offset by the decrease in conversion rate in the hotel booking flow because they were trying to get everybody to buy them. So like the incremental revenue torched the core business. And so they stopped selling lift tickets.

John Pendergrast (58:37)
Yeah.

So this is one of the core beliefs we have right now. listen, tours and attractions, it's a wonderful space. I'm not at all calling down the tours and attraction space in the slightest, but we are generationally behind.

Evan Reece (58:41)
Yes.

John Pendergrast (58:51)
in so far as how purchases are made, how UX, UI is done, how consumers operate in the wider space versus how they have to or how they're forced to operate inside of a tourism attraction space. We're just behind. yeah.

Tim Samson (59:06)
Okay.

Evan Reece (59:03)
Yeah. Yeah. The good news for many, but it yields bad news later is like, many of them

have done just fine with sub par UX. Because people want like they're not selling toothpaste, you know, like, like, these are things that people want to consume. But it's also one of the reasons that GetYourGuide, Viator, head out, like, whomever like

John Pendergrast (59:13)
Yes, yes, that's correct.

Evan Reece (59:27)
convert so well as their UX is amazing. And a lot of operators have made software buying decisions based off of like backend integration functionality, like legacy POS integration, you know, capability, as opposed to like, will this make my internet business, which I am going to be 100 % an internet only business in the future until people spend on F&B when they arrive.

Tim Samson (59:29)
Okay.

Thank

Evan Reece (59:53)
odds with driving the consumer behavior they're seeking.

John Pendergrast (59:57)
Yeah, no, I would agree with that. I think consumers buy a certain way and making them buy a different way because that's the technology you have in your hands is an unfortunate consequence of meaning that they subconsciously are stressed by the time they get to the end of the cart. And they're already going, oh, I wish this would just be over or like this has been confusing or any other number of things that happen.

Tim Samson (59:58)
So. Okay.

John Pendergrast (1:00:20)
and that we have work to do as an industry. Okay, we're gonna flip over to what we call the lightning round.

Evan Reece (1:00:22)
Yeah.

Okay.

John Pendergrast (1:00:27)
intention of these is something that none of us clearly are gonna be any good at, which is to be concise give short answers. But the reality is this has never worked yet. let's dive in and see where we go.

Tim Samson (1:00:38)
maybe this time will work right like it never has before but maybe this time works

John Pendergrast (1:00:40)
Yeah, hey, hope springs eternal. Hope springs eternal. Yeah.

Tim Samson (1:00:44)
I feel confident that we're going to be able to do this, although I don't like the first question, but I'm going to ask it Yeah, so OK, so here we go ready. ⁓ I know how you're going to answer, so this is really hard for me to even ask, right? No, no, no, no, I want to ask it because it's on. It's on everyone's mind, so fixed pricing or dynamic pricing.

John Pendergrast (1:00:48)
Yeah, I know. I'm

Yeah.

Evan Reece (1:00:58)
Bye.

It depends.

Tim Samson (1:01:05)
Does

I'm not going to debate you. the answer, right?

Evan Reece (1:01:05)
I mean, I would say in this

space, largely dynamic, but make sure you line your ducks up first.

Tim Samson (1:01:12)
Yeah, see, we're not we're not doing a good job at lightning, but like I don't I don't think that. Most attractions have just one type like it's a mix of strategy.

Evan Reece (1:01:20)
Yeah

John Pendergrast (1:01:22)
See,

this is the reason that lighting around fails. It has nothing to do with who we're interviewing. It's entirely us that fail at lighting around. okay. Most overrated pricing strategy in attractions.

Tim Samson (1:01:27)
It's us.

Evan Reece (1:01:28)
So.

I kind of want to say something but I don't really want it to be on Well, I want to tell you what I'm going to say but I don't want to say it And by the way, all these answers depend on the traction market but I

John Pendergrast (1:01:36)
⁓ We can bleep it out.

Yeah.

Evan Reece (1:01:49)
uncontrolled discounts.

Those companies can do good things and they are working hard to do them, but I think the legacy model is not good pricing.

John Pendergrast (1:01:54)
Yes. Yeah.

Tim Samson (1:01:59)
Biggest pricing blind spot for operators.

Evan Reece (1:02:02)
Parity.

John Pendergrast (1:02:03)
Groupon, necessary evil or avoidable mistake.

Evan Reece (1:02:07)
leverageable if done smart.

John Pendergrast (1:02:09)
Okay, so this is what's fascinating. As we're going through this, we're discovering more more, there is no one size fits all. There is not like, I'm gonna pick from this menu of 17 things I can choose from and this is the one that works the most often. It's literally understand your attraction, understand all these different, understand the behavior of your consumer, go through the whole process and then you come out the other side.

Evan Reece (1:02:15)
No.

John Pendergrast (1:02:31)
It almost feels like you should have a consultancy that does this, right?

Evan Reece (1:02:34)
you

Tim Samson (1:02:34)
Yeah, that's awesome idea.

Season passes, memberships, ⁓ asset or nightmare?

Evan Reece (1:02:40)
leverageable at the appropriate percentage of overall visitation.

John Pendergrast (1:02:44)
that is, okay. Do we let him get away with that answer? Cause that's like, like you can tell what you're thinking while you're saying that, is nightmare because most of them are done wrong and nobody does them right. So therefore if they were done right, then yeah, maybe, but even that's hard to prove.

Evan Reece (1:02:47)
.

Tim Samson (1:02:49)
Thanks

Evan Reece (1:03:00)
Well, no, think that if you asked me that question 10 years ago, I would have said nightmare. I learned that for many of these attractions, especially ones that are seasonal, this is about cash and cash management. And so by selling season passes in advance,

John Pendergrast (1:03:19)
interesting.

Evan Reece (1:03:20)
It's not only a pricing decision, it's a cash management decision. The reason I answered that way that I did is that if too much of your business starts to sit inside of season passes, you're actually, the other end of the spectrum is like you're losing out on revenue potential.

John Pendergrast (1:03:35)
Yeah, of course.

I've always characterized memberships as loyalty. And because especially in, say, a nonprofit, the members are the people that are the ones that are most likely to rally around you and to be excited about what you're doing and to give you this opportunity to actually build a brand.

Evan Reece (1:03:39)
Yeah.

John Pendergrast (1:03:54)
what I said might be really inflammatory, so I don't know, but I've always interpreted the biggest reason for memberships is loyalty. And I know there's a cash component, but it's like this is your group, this is your people, and you're showing your loyalty, and especially in nonprofits, this is where you get all your donations and other things out of it because you're building a loyalty group.

Tim Samson (1:04:11)
They're

just we lump them all in in the in there's so many different reasons to do it right so it could be, be cash flow like Evan said It it could be to get that second visit You know we see that in like some of the six flags models and things like that where they discount the pass just to get you to come again for the per caps right Or it could be it's Like Morey's where their visitation is so high that the price is a ridiculous amount, right?

I think there's just lots of there's lots of different variable with it. It's not a ridiculous amount. It per visit. It's not. But when you compare it with other things in the market, when you look at a retail pass for when you look at the retail price for a season pass product to an amusement park being $450.

John Pendergrast (1:04:36)
You have to kind of ask for it.

Evan Reece (1:04:38)
But I do think that...

Yeah, but it supports your day pass pricing strategy. That's the thing is if if if if you if 70 % of your customer base or 80 % of your customer base has bought a season pass, then there isn't any market left. You know what I mean? Like in this is this like trade off and it's tied back to the confidence in moving day pass pricing up.

Tim Samson (1:04:55)
That's

Evan Reece (1:05:15)
Is that like if you have a, you know, the season pass, like you mentioned a day pass is $50 and the season pass is 55. And then all of a sudden, like 90 % of your business is in season passes. You're essentially, I don't know. It's just not efficient given what one can do with other pricing approaches now versus when those models are virtually showed up.

John Pendergrast (1:05:35)
Yeah.

All right. Great answer. I'm getting it back on track. Okay. We're getting close and ⁓ best pricing lesson from the hotel industry.

Tim Samson (1:05:40)
This is this is not rapid. This is not rapid fire.

And we're off track again.

Evan Reece (1:05:51)
I don't know how I can do this rapid. Don't drop

prices last minute.

John Pendergrast (1:05:57)
That's yeah, that's pithy. I like it

Evan Reece (1:06:00)
and the longer version you can cut this is If you like have a rate and then you have an occupancy and then last minute you drop rate all the people who bought sooner Next time won't and they had like a collective action problem around this where like Looking windows compressed entirely and all of a sudden my friend Sam shank creates hotels tonight

John Pendergrast (1:06:10)
Get mad.

Yeah.

Evan Reece (1:06:22)
you know, to capitalize on this thing that the industry did to itself, in addition to incredible design and good product and all that stuff. And then, you know, sold with Airbnb for however much.

John Pendergrast (1:06:33)
I get all the best questions.

Tim Samson (1:06:35)
Yeah,

AI and pricing, can you trust it?

Evan Reece (1:06:38)
if you know how to provide a good context.

John Pendergrast (1:06:40)
Next, big pricing innovation.

Evan Reece (1:06:42)
I think you told me about it. I think it's the the agentified shopper.

John Pendergrast (1:06:47)
It's going be really fascinating to see what happens with that because I think that's going to change a lot of things. And I don't know that it's necessarily like if you're talking about consumer confidence is like one of the biggest drivers. I don't know that it solves that at all.

Evan Reece (1:06:58)
Yeah, I guess it depends on the behavior. if I'm like, go find me the best rate on this thing for this date. Then.

John Pendergrast (1:07:04)
that's

a really one-dimensional view of pricing because that's clearly not how everybody is going after it.

Evan Reece (1:07:07)
Hell, that's

Yeah, no, that's true. Yeah, well, so then maybe the true answer, the next biggest thing is prompt design.

John Pendergrast (1:07:18)
One pricing metric every operator should track.

Maybe there's more than one.

Evan Reece (1:07:22)
Yeah, intent totally, if you can get it. If you can get intent, get intent. At the trip date level, ideally with intent date associated. But the other one that everybody can create is, so I mentioned Revpar in the hotel space.

Tim Samson (1:07:22)
I think you said it. I think it's intent and converter.

Evan Reece (1:07:41)
You can create that metric. Revpar is revenue per available room. So they have a denominator that's natural at every hotel. Any operator can come up with that denominator. And it becomes useful when you start to compare dates and see how they're performing on a relative basis and saying, what's my booked rev per available whatever. And it doesn't really matter what the denominator is.

so long as it's constant so that you can measure it over time. And if you look at booked revenue per available, whatever, that's a good way to look at pacing for future trip dates. And you can map that to past trip dates. But yeah, you're right, Tim, it's intent. It's intent, because it's all tied to that stuff.

Tim Samson (1:08:23)
All right, most successful pricing tactic.

This actually said psychological, but I'm also thinking of behavioral, so just in general.

Evan Reece (1:08:32)
Being honest

with your customer. What's that?

John Pendergrast (1:08:35)
And you just answered ⁓

Tim Samson (1:08:35)
rolls into the next question. ⁓

John Pendergrast (1:08:37)
my next question, was price transparency,

help or hurt?

Evan Reece (1:08:41)
If it's a rational strategy it helps a lot. Especially if you're starting to do something different if there's a Strategy that matches a service policy that matches the marketing message Then your customers start to tell other customers that Hey, the reason they're doing that is they're trying to get you to buy in advance

Hey, no, you can't cancel because you got a good deal. Hey, you can't use that ticket because you bought it for a Wednesday and that's why you got the lower price and that it's going to be higher on Saturday. Like, that's like a live stream of the liftopia.com, Facebook feedback circa 2013.

Tim Samson (1:09:13)
Mm-hmm.

John Pendergrast (1:09:14)
Well, that's the end of our lightning round. And Evan, this has been fantastic. And the reason I say that is because I've come out of this interview going, now I just want to have a continued conversation because this is fascinating. And there's so much psychology behind this process. And I think most operators that I talk to go, how much is it going to make me?

Evan Reece (1:09:16)
Thanks

John Pendergrast (1:09:35)
That's the very first question is, what it's gonna do to my revenue? And there's so much more to it than that on what's it gonna do to your brand? What's it gonna do to your overall strategy? What's it gonna do to everything? And how does this process work together as a testing process over a long period, maybe forever, as you continue to understand your consumer better? This has been a great conversation. I've really enjoyed it.

Tim Samson (1:09:43)
Okay.

Evan Reece (1:09:48)
Yeah.

Tim Samson (1:09:54)
Okay. Okay.

Evan Reece (1:09:59)
Yeah. Well,

it's been a lot of fun for me. mean, I clearly have spent a lot of time in this space and I, I know the like black and white answers make for better podcasts, but hopefully I'm not too black and white because there really is a It depends in most of these cases. And, and, I, you all see a different subset of the industry than I was familiar with. so anyways, this is fun for me.

I don't really have a dog in the fight these days, so it's like nice to just...

John Pendergrast (1:10:26)
Right.

Yeah. Yeah.

Tim Samson (1:10:28)
Yeah, I feel like ⁓ I feel like we only Covered the surface of this right like we covered the behavior psychology and I think that it is a high level. These are pretty deep topics that we got into especially around behavioral stuff

Evan Reece (1:10:29)
talk.

Tim Samson (1:10:43)
But you're probably you probably don't have the right pricing right most attractions don't have the right pricing in general

Evan Reece (1:10:48)
Yeah,

and buying something fancy probably isn't the next most right step. know, like doing some basics.

Tim Samson (1:10:53)
Yeah. ⁓

and I think I think as operators you can take a little risk and try this stuff on your own and. In just test out your gut and. You know there's you. There's never any growth without being a little uncomfortable and I think as operators we don't get uncomfortable around pricing enough with it. And we also don't allow it to play out. So I think the biggest thing whenever you're going to.

Evan Reece (1:11:13)
Yeah.

Tim Samson (1:11:18)
change your pricing or make adjustments in your pricing is given enough time. Your customers, your customers are going to react. You're going to hear things from your employees. You're going to hear things from stakeholders. They're going to think it's not the right move to do, but you won't know if you don't give it enough time.

Evan Reece (1:11:32)
Totally. Yeah. I agree.

John Pendergrast (1:11:33)
So Evan,

I'm gonna say this. At some point, I think we're gonna have you back on. It might be a year from now, but we're having back on and we're gonna talk about AI and whether any of our predictions were correct and the impact.

Evan Reece (1:11:37)
Great. ⁓

give us two weeks and it'll be a different ecosystem

John Pendergrast (1:11:46)
Yeah, that might also be true.