Variable pricing at ski resorts can shift demand from peak periods to off-peak periods.Ski resort managers can make direct use of our modelling framework and results when implementing new pricing strategies. The latter aspect is particularly relevant in the ongoing global pandemic. The results show that the optimal prices the ski resort should set are influenced by both diversion and capacity constraints. Then we use this model to recalculate the optimal variable prices a ski resort should set when accounting for the demand shifting and capacity constraints. In this paper, we first model how diversion is related to various levels of the intra-weekly price differences at a ski resort. This is often referred to as diversion, or demand shifting, and can directly affect the profit-maximizing prices ski resorts should set for their tickets. The implementation of variable pricing at ski resorts can shift demand from peak periods to off-peak periods if at least some skiers have the flexibility and willingness to do so. This has important implications for decisions about offering the specials and raises a flag regarding a potential marketing-operations conflict. The calculations prove to be far more accurate for night-owl specials than for early-bird specials. In the eight large simulation-based experiments we conducted, we find that it is important to estimate revenue cannibalization from full-fare customers. Restaurateurs could use these calculations when deciding whether to offer a special. While simulation would be an ideal tool for predicting the specialsвЂ™ net revenue benefits, it might be impractical for many restaurateurs, so we develop three simple вЂњback-of-the-envelopeвЂќ type calculations. The effectiveness of these specials has yet to be examined.

These specials bridge marketing and operations-marketing from the goal of increasing customer demand in the off-peak periods and operations from the perspective of having to serve those customers. We examine this issue in the contexts of restaurants, where the practices of offering discounts to restaurant patrons for dining early or dining late-commonly known as вЂњearly-birdвЂќ and вЂњnight-owlвЂќ specials, respectively-exist throughout the world. In a long history of capacity and demand management research in services, it has often been suggested that pricing discounts and specials can increase demand in off-peak periods.

Night owl restaurant