Theme Park Food

Optimizing Revenue Potential with Ancillary Pricing: Theme Park Food and Beverage Case Study

Driving 20% Improvement in EBITDA Through Food & Beverage and Merchandise Pricing

Project Background

Integrated Insight worked with a major theme park to assess revenue optimization strategies for food and beverage. The client was experiencing increased demand following a recent expansion period and the addition of new rides, and sought to capitalize on these successes through new pricing opportunities.

The project was initiated through a discovery phase, in which Integrated Insight worked with management to obtain all the information required to perform analyses. Data collected included lists of all food & beverage items; transactional data for revenues and per cap spending for all products, broken down by day, location, and guest segment; pricing history, including promotions; menu boards by location; monthly parks and resorts attendance; and more.

From the data provided and in conjunction with marketplace and competitor information collected by Integrated Insight, we were able to conduct both a qualitative and quantitative analysis of pricing. The analysis began at the lowest level of detail to understand opportunities that were hardest to reach. Our work included detailed data analytics to better understand where there was more opportunity and whether initiatives being undertaken were delivering expected returns. The focus was on driving incremental volume and rate improvement that is sustainable over time.

Theme Park F&B Revenue Optimization Recommendations

Key findings from the analysis included steady revenue improvement following the introduction of several new themed items, better performance due to a stronger mix of quick and full-service venues (compared to food carts at other areas of the park), higher penetration rate for food purchases, and generally positive sentiment towards food service and availability.

Top revenue optimization recommendations derived from the analysis included:

  • Implementing stronger and clearer price stratification on all products, giving guests choice and making it easier for them to move into higher spending options
  • A mix of modest price increases and decreases, strategically placed and married with better marketing tactics, to maximize profits while not negatively impacting guest perceptions
  • Introducing digital menu boards to enable greater flexibility in pricing and menu options, optimized product placement, and improved brand perceptions
  • Leveraging under-utilized assets, such as characters and other IP, to appeal to guests seeking more experiential dining
  • Conducting better and more frequent guest behavior research to better accommodate demands and customize product offerings
  • Introducing higher-end alcoholic and non-alcoholic beverages, including themed products.
Results

The immediate action items in the recommendations called for a 12% improvement in EBITDA. An additional 8% increase was identified through longer-term initiatives, which took into account the projected capital expenditures associated with new digital menu boards and updated systems support.

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About Integrated Insight

Integrated Insight is an analytics consulting firm formed in 2009 by a team of past Walt Disney Parks & Resorts executives. While at Disney, the founders of Integrated Insight had responsibility for Food & Beverage and Merchandise revenue, which were each $1B businesses.

With decades of experience at Disney in research, data analytics, pricing, revenue management, labor management and operational efficiency, Integrated Insight helps for-profit businesses and not-for-profit agencies reach their full potential. We marry our real-world experience with robust analysis of your business to find viable solutions to complex situations, and identify untapped opportunities for topline and bottom-line growth.

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