Pricing is determined by a variety of different factors, including facility size and amenities, local socioeconomics, cost recovery goals, neighboring competition, and political pressure. Often, there are many people and factors involved in determining pricing, but there are a few basic rules that most facilities follow.
Service vs Sustainability
Each facility is unique in the overall goal it is attempting to achieve. Many municipal facilities are funded and operated for the purpose of providing an invaluable service to the community. Their goal is to serve as many residents as possible and typically subsidize 40-80% of their operations in order to keep the admission fee affordable for members of the community. Whether a facility is focused on service or sustainability is often dependent on the socioeconomic climate in which it is located. Facilities in lower income neighborhoods are typically there to provide low-cost service. For this type of facility, pricing is usually driven by history and the governing political body. Other facilities operate more as an enterprise fund, in which cost recovery is the overarching goal. Fees are typically higher in order to account for the expenses associated with offering programming or an aquatic facility in general. For this approach, you will need to calculate what your expenses are for each program or service offered. Based on attendance for that particular offering, generate a price that will ensure you are covering your expenses. Determine your overarching fiscal goal for the facility first, before beginning to design your programming and amenities.
How to Determine Your Costs
If you are interested in calculating cost recovery, gather all the financial data available to you to account for all programs and expenses. Calculate your utility costs by season, as most of your programming will be seasonal and can vary dramatically for an aquatics center. Next, separate each of your programs and determine how many hours you spend on labor for each position type for that type of programming. For example, when calculating costs for group swim lessons, be sure that, in addition to the instructor’s teaching time, you include their preparation time, administration time spent on marketing and organizing classes, deck lifeguard time, and time spent training and evaluating the instructors. Next, add in the equipment costs, such as swim lesson toys, kickboards, pull buoys, end of session treats and report cards. Divide this number by the number of group swim lesson sessions offered during the season. After that, calculate what your maximum attendance could be during the session if every spot was full. This will rarely be the case; so, to be conservative, assume about 70% capacity. Divide your number by that 70% number and you will understand how much you need to charge just to recover program costs for one child in a group lesson for a session. Adding in utility costs is a bit trickier and can be the part where the process becomes more of an art than a science. A simple way to incorporate utilities into your analysis is to take the programmable hours of the pool and divide the total utility costs by the number of programmable hours. Then use that number, multiply it with the number of swim lesson hours, and include that in the program cost calculation.
Season Pass Pricing
When developing pricing for your season pass, it is easy to overthink the process since your costs can vary significantly depending on how often the pass is used. Look to your records to determine how often the average season pass holder visits your facility in a season. Use that number and multiply it by your admission price to determine proper pricing. For example, if your admission price is $4 and the average season pass holder visits one time per week with a 12-week season, you would price the pass at $48 per person. This is where the art comes into the scenario. If your admission is $7 and the average season pass holder visits two times per week for a 12-week season, you will not want to price your pass at $168. It is highly unlikely that all visitors will be willing to pay that much, and will instead just opt for daily admission. Be aware of pricing yourself out of the market and make smart adjustments.
Why Are You Special?
Depending on your location, there may be neighboring water park or aquatic facility acting as a competitor with similar services. The key determining factor in where customers choose to spend their money may be admission price. Research your area competition to ensure you are charging a fair rate. There may be a situation where your competition is focused on providing a service for the community. In that case, look at what makes your facility unique and market how your facility is worth more than other facilities for that reason. If customers feel there will be better value at your facility, regardless of the reason, they will be more likely to pay the higher admission price.
Determining pricing for your facility can make or break the viability of your programs and overall facility. Be sure to define your overarching fiscal goals in relation to the service you are providing to your community when determining pricing. Research how much it costs to truly administer your programs successfully and then select a fee that matches that cost.