Rafi Mohammed

Interesting Pricing at a Fenway Park Bar: "A" for Effort

Posted on April 6th, 2010 (0 Comments)

Katharine Q. Seelye wrote an interesting front page New York Times article yesterday on a new pricing strategy being used by a bar close to Boston’s Fenway Park. Jerry Remy’s Sports Bar and Grill is selling a $500 “season pass” that guarantees purchasers a table at the restaurant for all 81 home games. I love the pricing initiative, but there is so much more that can be done with price.

Here are the facts. Local restaurants and bars at Fenway Park are swamped before and after baseball games. Fans want to grab a bite to eat before the game and celebrate another Red Sox victory after the ninth inning. Makes sense, right? The problem is that during the games, patrons leave to go to the game and restaurants become empty (say, 20% of capacity). Jerry Remy’s is uniquely set up for fans to watch the game – the Boston sports bar Mecca has two 11 feet long high definition televisions (costing $225K each). In summary, peak times are before and after the games, off-peak is during the game.

The problem is that these season passes provide far more benefits than a guaranteed reservation. Every time a “season pass holder” goes to the restaurant before a game, in addition to the guaranteed reservation, they also receive a free beer (let’s value it at $5) plus a $25 food credit. Thus, if a season pass holder attends all 81 home games (or sells extra passes on Craigslist, for say $50 to $100 a pop), the free refreshments alone are worth $2,430. So instead of charging a peak-load premium, Mr. Remy is actually offering a peak-load discount. One other opportunity to capture value is that Remy’s current allows a season pass holder to bring in basically as many people as they want (The NYT article mentioned one party of 18).

Remy’s has hit on an idea that I have long believed that restaurants should implement – charge more during peak and less during off-peak periods. In its next incarnation, I suggest that Remy’s truly charge a premium for a guaranteed reservation during peak times (offer season passes as well as “spot” passes for each game – perhaps charge $100 for a Yankees vs. Red Sox game and no freebies). I’d add a surcharge for parties greater than 4 people. Pricing tactics can also be used to fill up the restaurant during the game. Options include offering “Red Sox game hours” discounts or prepaid options such as pay $500 and get a $1,000 credit that is only good during Red Sox games. I’d also suggest a minimum (say, $15) for each patron who comes in after a game.

I apologize for the dearth of blogs lately – there’s been a tremendous amount of work associated with the book release. Please check out the latest news section for articles that I wrote for CNBC and Forbes as well as a recent CBS/Infinity radio interview on The Small Business Hour.

Thanks for your support and see you next week!

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