Oversell with Confidence

May 25, 2016 AudienceView Staff

Every organization hates losing out on potential earnings. When you book an event at your performing arts center, you want as many people to attend as possible. If you sell subscription-based reserved seating this could be as simple as reminding attendees using an email or text message notification, but what about events sold on general attendance? Attendees may buy a ticket for an event, but life happens, and that may interfere with their scheduled plans. So how do you plan to keep your theater running optimally while still accommodating for unknown variables? You look to the hotel and airline industries for guidance, and overbook your event. 

Overbooking may have a negative connotation behind it, hinting at a venue being over capacity for the sake of wringing out extra profits from fans, but it’s actually a concept rooted in math. Airlines and hotels experience no-shows all the time, resulting in lost revenue. To keep from regularly losing money, the hotel industry studies the average check-in rates on any given night and tries to stay ahead of what they predict the no-show rate to be. The airline industry is even more methodical with their calculations, and have figured out a mathematical algorithm that tells them how much to overbook a flight. 


Borrow Strategies used by Hotels and Airlines


The downside to the way both of these industries deal with overbooking is that sometimes the algorithm gets something wrong. This results in customers being bumped from flights, or having to find another hotel because their room was booked. So how does a performing arts center avoid these pitfalls while still maximizing the amount of attendees they can let into their doors?  Ivy Mouledoux, the Associate Director of Patron Services and Data Systems from the Louisiana Philharmonic Orchestra has figured out a hack.

After looking at the historical data stored in AudienceView, Ivy was able to pull some specific lessons from the information and make a business case for transitioning away from reserved seating for certain events. “We looked at no show rates and started over-selling and switching towards a general attendance system instead of a reserved seating configuration,” explained Ivy. “We learned that we can oversell with confidence that we won’t meet the fire marshal's limits. We’re cautious about it. For example, our most conservative rate has been 4%, it hasn’t oversold yet.”

By cautiously overbooking the events, Ivy was able to monetize the attendance gap for general attendance shows. And despite his trust in the data, there was still a human component present whenever Ivy oversold an event like the New Orleans Jazz & Heritage Festival by the typical 4%. “We never scanned in more tickets than we had capacity for. We had people watching it throughout the night, and if we saw an anomaly for our 4% we would cut off sales.” 

This lesson in examining historical data and applying the best practices from different industries helped Ivy achieve more efficiencies, but most importantly it showed him that his organization’s system could be improved by implementing a general attendance system that allowed them to apply the this 4% to every event. “We decided based on sales data that reserved seating is disadvantageous,” said Ivy of his organization's shift to general attendance, while also admitting that this solution only applies to specific scenarios. 
 

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