Do comp tickets help or hurt tour operators?
Las Vegas hotels are famous for the complementary ticket policy extended to guests - but do comp tickets help or hurt tour operators? A respected industry professional recently published his opinion based on two decades of data.
The Unrequited Hope Of Comp Tickets
Complementary tickets, or "comps", are a staple in the events industry. Be they part of a deal sweetener on a performer's contract rider, or as tried and true marketing practice, comps will always be around as long as there are ticketed events.
In a more specific business case of tourism activities, like sightseeing tours, comps are often given out to hotel guests as an incentive (Las Vegas hotels distributing comp tickets immediately come to mind). Some say that tour operators benefit from hotels distributing comps since it can lead to additional paid bookings down the road.
However, respected industry professional Rick Lester has a very different opinion on comp tickets in general.
In 'The Risk of Free' Lester writes of his experience advising theaters as they plan their sales strategies. It seems that, at least in the world of the Performing Arts, the promise of comps generating future paying customers is a broken one.
The unrequited hopes that free tickets would generate larger, more invested audiences are a cautionary tale. The expected audience growth and contributed revenue did not materialize. Our firm’s study may offer some insight. Over the past two decades, whenever TRG has been asked to measure the impact of complimentary ticket programs, our results have been consistent. The lifetime value of a comp ticket patron is virtually zero.
Transactional patron behavior data shows that a comp ticket holder seldom buys another ticket to that organization. Recipients of a comp ticket generally wait until offered the chance to return—you guessed it—using another comp. Two transactions later, they are more likely to ask you for another comp than buy a ticket.
Mr. Lester makes an exception for the Dallas Museum of Art's decision to eliminate entrance fees altogether, effectively making all tickets complementary, stating that the strategy is part of a larger effort for cultivating donations from patrons.
It is important to note that the Dallas Museum of Art has annual operating budget of $21 million from private, corporate donations as well as long established trust funds.
To the notion of tour operators participating in comp ticket distributions by hotels and tourism boards the jury is still out. Operators should carefully consider Rick Lester's position that giving tickets away for free does not generate new (paid) business later.
But imagine if one person, who is part of a large group, were to be given a comp ticket by a hotel concierge. That one person could have substantial influence on the entire group's activities. Such a scenario is not so much in defiance of Lester's position as it is an example of a "come one (free) come all (paid)" policy on comps.
That group of twenty people who suddenly show up for your tour because just one of them got a comp at the hotel means nineteen are about to pay for your tour - still think comps have no value?
Regardless of your position on comps, the reservation software your tour uses needs to support comp redemption at the ticket window and online.
The ThunderTix plan for tour operators supports the distribution and redemption of comp tickets at the walk-up window and online. We also support comp tickets more profitable cousin - coupons.
Our custom coupons save you time by letting groups choose the coupon offer date they want and reserve the appropriate amount of tickets – all without a lengthy telephone call. You can fine tune the coupons for tours available during only for certain tour times or dates. We give you control over control over coupon redemption, including how it is to be redeemed, by whom, and how much of a discount is to be applied on a per-offer basis.