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Ticket Sales and Revenues are Up - Why Does it Hurt?

May 10, 2024
by TRG Arts

In the most doubtful and trying times of the pandemic, imagine you stumbled upon a crystal ball in the dusty backroom of your office that allowed you to see how the sector would perform through 2023?

Here is what you would have seen in your crystal ball:

TRG’s Benchmark data examined ticket and sales data of 129 organisations in the United Kingdom and compared it to 2019. The chart is moving like a stockholder’s dream - dramatically up and to the right - year after year since the low of 2020. A 15% increase in the number of tickets sold and a 29% increase in revenue over pre-pandemic 2019 numbers means in the UK market demand has grown, more tickets are selling even though prices have gone up in that period.

Multi-Buying in North America

Looking at the 2023 market by genre in America, we see an equally encouraging revenue story. With the exception of theatre, the major genres began beating 2019 revenues in 2022 and have continued to grow revenue in the following years. In 2023, theatre surpassed the other genres (though they were not far behind) in terms of revenue compared to 2019, beating the genre’s pre-pandemic revenues by 34%!

Seeing this data in your crystal ball back when venues were shuttered, 2023 would be revealed to you as the year that not only caught up but surpassed pre-pandemic highs including in ticket units sold, ticket revenues, total audience households, and the average frequency of attendance of those households. Looking at this bright and shining vision of the future you might have been tempted to declare to your team that by the end of 2023 the sector will be recovered! So here you are, 2023 data is in and you’re well into your 2024 campaigns popping open champagne and throwing confetti around because we are fully recovered, and times are so good, right? Well, probably not.

So Why Does it Hurt?

A rising tide raises all ships they say, it follows then that a falling tide will do the same in reverse. Despite the positive wind in our sails found in the data, the macroeconomic tide is going out. Inflation, and therefore your costs of doing business, have risen 21% since 2019. That means even though revenues are higher by 29%, each dollar or pound that you make now is worth 21% less in ’23 than it was in ’19. You are feeling the impact of every other industry raising their prices, and while as a sector we have moved ticket prices northward (about 12%) since 2019 to mitigate this, something is keeping us from raising them enough to properly keep up – to properly recover.

The reality found in this data is that your teams are working harder now than they were in the “before times”. You are putting on more shows, selling more tickets, bringing in more revenue and building more demand, but even after accepting some modest price hikes, the tickets you are selling are still worth 10% less to you today than they were in 2019. This macroeconomic challenge is why even though the numbers are good, it doesn’t feel good.

At a recent client gathering in London, TRG Arts’ senior consultant Brad Carlin shared his insights around this very reality. Listen in:

We know, this pricing conversation is uncomfortable. You feel, perhaps even more sensitively than such vital services as grocery stores and insurance, that raising prices hurts the people you serve -your audience. Along with the genuine concern for their financial burden, you feel an equally genuine fear that they just won’t pay it, doubting that the product you are offering can command a price as high as it would take to properly adjust for that dizzying inflation. The data, however, challenges those anxious assumptions you may have. As Brad shared, more patrons are buying than in 2019, and when we take out corporate or group buyers and examine just households, the frequency has gone up.

In summary, the bad news is that you need to think about raising prices, no let’s be direct, you need to raise prices. The good news is that there are ways in which you can both attain the ticket prices you should be while also keeping seats accessible to those the price sensitive members of your audience whom you are concerned for. Our sprint clients at TRG accomplish this through what we call demand management – pricing seats by demand and using customer habits you want to encourage like early booking or booking in the hard to fill sections of the hall as opportunities for discounts.

Check out these additional resources

Dynamic Pricing: A Strategy for Revenue and Relationship

Dynamic pricing is a tale of two critiques; either hailed as a revenue-maximizing strategy or denounced for making high demand experiences unaffordable for many. Putting strong feelings either way aside, when used strategically, dynamic pricing is a sophisticated tool that can not only increase revenue by aligning price with demand, but it can also foster audience loyalty. This blog aims to shed light on how dynamic pricing can be an invaluable part of your audience loyalty strategy toolbox, benefiting both your venue and your audience.

TRG Clients are Focused on Recurring Revenues - and the Results Show it

TRG clients are outperforming non-TRG clients in retention and multi-buying. Analyzing Arts and Culture Benchmark data from over 25,000 events, we can see the impact of a recurring revenue focus within our client organizations when compared against their general market.