Revenue and Attendance Simultaneous Optimization in Performing Arts Organizations

Andrea Baldin, Trine Bille, Andrea Ellero, Daniela Favaretto

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

Resumé

Performing arts organizations are characterized by different objectives other than revenue. Even if, on the one hand, theaters aim to increase revenue from box office as a consequence of the systematic reduction in public funds; on the other hand, they pursue the objective to increase its attendance. A common practice by theaters is to provide incentives to customers to discriminate among themselves according to their reservation price, offering a schedule of different prices corresponding to different seats in the venue. In this context, price and allocation of the theater seating area is decision variables that allow theater managers to manage their two conflicting goals to be pursued. In this paper, we introduce a multi-objective optimization model that jointly considers pricing and seat allocation. The framework proposed integrates a choice model estimated by multinomial logit model and the demand forecast, taking into account the impact of heterogeneity among customer categories in both choice and demand. The proposed model is validated with booking data referring to the Royal Danish theater during the period 2010–2015.
Performing arts organizations are characterized by different objectives other than revenue. Even if, on the one hand, theaters aim to increase revenue from box office as a consequence of the systematic reduction in public funds; on the other hand, they pursue the objective to increase its attendance. A common practice by theaters is to provide incentives to customers to discriminate among themselves according to their reservation price, offering a schedule of different prices corresponding to different seats in the venue. In this context, price and allocation of the theater seating area is decision variables that allow theater managers to manage their two conflicting goals to be pursued. In this paper, we introduce a multi-objective optimization model that jointly considers pricing and seat allocation. The framework proposed integrates a choice model estimated by multinomial logit model and the demand forecast, taking into account the impact of heterogeneity among customer categories in both choice and demand. The proposed model is validated with booking data referring to the Royal Danish theater during the period 2010–2015.
SprogEngelsk
TidsskriftJournal of Cultural Economics
Vol/bind42
Udgave nummer4
Sider677-700
Antal sider24
ISSN0885-2545
DOI
StatusUdgivet - nov. 2018

Bibliografisk note

Published online: 3. May 2018

Emneord

  • Multi-objective optimization
  • Pricing
  • Seat allocation
  • Multinomial logit model
  • Theater demand

Citer dette

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Revenue and Attendance Simultaneous Optimization in Performing Arts Organizations. / Baldin, Andrea; Bille, Trine; Ellero, Andrea; Favaretto, Daniela.

I: Journal of Cultural Economics, Bind 42, Nr. 4, 11.2018, s. 677-700.

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

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