How can destinations spread demand?

In this second of our series about the challenges of overcrowding, we look at how over popular destinations can find ways to spread demand, encouraging people to visit at less busy times.

These techniques are not new. Many of the world’s great attractions use them. What’s more complex and newer is the idea of adopting similar strategies at a higher level for say a complete destination or a multi-site experience: like a part of a city or a walking trail.

How famous attractions manage demand

If you want to visit the spectacularly romantic Alhambra palace in Granada, you have to buy tickets in advance for specified time slots. This means there are never too many people visiting at one time. If tickets for a day have sold out, you simply can’t visit. In addition there’s a range of tickets and prices. Visit in the evening and you pay less than in the busier day periods, but you don’t see quite as much of the palace. Some attractions are going further in trying to change visitor behaviour and encourage visits at less busy times. The Uffizi gallery in Florence recently raised peak day ticket prices to €20, while offering a three-day off-peak one for as little as €18. The Colosseum, the Taj Mahal, The Statue of Liberty, virtually all famous attractions limit the number of visitors to avoid overcrowding. But the proportion using variable pricing like the Uffizi remains small. Some would argue that it’s not fair to give wealthier visitors an advantage, but it’s a strategy that we’re bound to see more of.

Can we do the same with multi-site locations?

The concept of restricting access and charging becomes perhaps more contentious when applied to a complete destination or a space traditionally thought of as public. Should tourists pay to visit London’s Trafalgar Square or Maya Bay in Thailand where The Beach was filmed? How do we feel about having to go through turnstiles to simply cross a bridge in Venice? For now we don’t pay a fee to do these things, but maybe we should? The Inca Trail has had a paid permit process in place since 2004. We pay to access many National Parks too, but here too we’ve yet to see widescale use of smarter variable pricing. You pay the same amount for an Inca Trail permit regardless of the time of year you go. One interesting exception is the Milford Track in New Zealand. Costs vary for locals and foreigners and they rise steeply during the peak season.

How about complete destinations?

Many destinations have introduced tourist taxes to help pay for the upkeep of infrastructure that previously would have been paid for by the local population. Typically a flat rate per night is levied, collected by the accommodation provider. Variable pricing does exist in many destinations with more luxurious accommodation attracting higher tourist taxes, but the idea of charging more in peak season to encourage people to visit at different times is again limited. The Balearic islands in Spain are an exception. A tourist staying in a 5-star hotel pays €4 a night tourism tax during the peak season from May to October but only €0.25 a night in low season. It will be interesting to see if the scale becomes more aggressive in the future. At its current level, it’s questionable whether it affects tourist behaviour.

Making variable pricing work

So, this brief analysis shows that restricting access and charging a flat fee is a widely used technique for managing the number of tourists and it’s likely to become more widespread. The wider adoption of charging variable prices seems like an obvious opportunity for helping manage overcrowding more effectively. But a number of considerations need to be taken into account:

1. Get the maximum carrying capacity right
   It’s essential that the correct maximum capacity for an attraction or destination is calculated. If people are paying where previously it was free, they have to see the benefits of doing so in a less crowded, more authentic experience. For example, authorities at the Alhambra reduced the hourly number of visitors from 400 to 300 to improve the visitor experience.
2. Get the price point correct
   Charge too much and you might find too many people stay away and you might be open to accusations of profiteering. Price it too low and it won’t have an impact. Typically, destinations and attractions struggle with collecting the data to make these decisions too.
3. Make the cost structure simple
   Any kind of variable pricing regime needs to be easy to understand. The low cost airline industry which has decades of experience using variable pricing is regularly held up as an example of confusing pricing practices. If someone has to pay more for their ticket, it’s important they understand why. Offering a range of price points does also mitigate against the accusation that by charging for entry, you’re favouring wealthier people. At the Taj Mahal, locals pay a fraction of the price paid by richer foreigners.
4. Make tickets easy to buy for everyone
   Additionally, purchase needs to be simple and widely available. A clean, easy to use web-purchase process is ideal. Places that have for years simply taken a fee for a ticket at the entrance may struggle to introduce new payment and processes. If the supply of tickets to visit a place is restricted, people need to feel the process for purchasing them is straight forward and fair.
5. Invest income generated transparently
   This is a particular criticism of tourism taxes which in the past tended to disappear into government coffers. The revenue generated needs to be declared and the profit needs to be spent maintaining and improving the attraction. Locals will want to see some of the income spent on maintaining and upgrading infrastructure too. In less developed countries, a portion of the proceeds can be invested in helping the local community. Rwanda does this really well, investing 10% of income from its National Parks in projects like schools and health centres for communities nearby.

There is no single solution to the problem of overcrowding. Using variable pricing to encourage different behaviours from tourists is a little contentious, but it’s something we are bound to see more of. It could be an effective tool for protecting over-visited sites, making the visitor experience better and ensuring local people’s lives are not too negatively impacted.

The next post in this series looks at how destinations can reduce overcrowding by improving the visitor experience.

Further reading: Coping with success: Managing overcrowding in tourism destinations