Conferences, Airplane Tickets, and Optimization

Why is it that attendance at many conferences is often suboptimal at best and sparse at worst?

These days, I go to my fair share of conferences, typically gratis as a member of the media. While I’m no rock star (yet), my blog has a respectable following and I usually write about the conferences that I attend.

Empty Seats and Parallels to Airplane Tickets

Without being an expert on event management and ticket pricing, many events work under a simplified version of the airplane ticket pricing system. For a description of the complexities of pricing airline tickets, check out this article from the Mathematical Association of America that includes this tidbit:

[A]irlines offer thousands of different fares, with different sets of rules governing the different legs on each trip. If two people take a round trip together, with three flights in each direction, there can be as many as 1,00012, or around 1036, fare combinations. If you printed out a ticket for each possible fare, the pile would stretch all the way to the nearest star, Proxima Centauri, four light years way.

Wow. While not nearly that complex, there are certainly parallels between buying conference and airplane tickets:

  • Most conferences offer an “early bird” special six months or more in advance. Then, gradually, ticket prices will increase in one or two steps.
  • Particularly for many larger conferences, there are equivalents to first class, business class, and coach tickets. Each grants you varying levels of access and probably better food.

So why is it that attendance at many conferences is often suboptimal at best and sparse at worst? I’ll usually wonder the same thing while attending sporting events but never at Rush concerts, which are almost always standing room only.

Questions and Answers

Yes, we’re not living in the best economy now and I’d wager that attendance at most conferences is down. Yet, I’m struggling with some questions:

  • How many of you would go to a conference if the price were right (or at least consider it)?
  • Does the “one price fits all” conference ticket model still make sense?
  • If so, then isn’t there a better way to price tickets?
  • Couldn’t event tickets be priced in such a way to find the right price at the right time for the right person?

Turns out that I’m hardly the only person asking these questions. I recently read about a company called Qcue that makes software designed for ticket optimization–and it works. The San Francisco Giants are using Qcue now and project increased revenues of $5M USD this year, although some of that jump probably stems from the fact the team is playing better this year. Hey, Barry Zito has to earn his $18M/year salary at some point, right?

Let’s be clear here. Most conferences take place annually and the time, effort, and expense required to build proprietary software optimizing ticket revenue makes little sense. But I can’t help but think that software like Qcue’s would maximize conference revenue.

Again, I’m no expert here. What do you think? What am I missing?

Photo from Uros Petrovic.

philanimated

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5 Comments

  1. Jim Harris

    I would argue that ticket prices are largely irrelevant to conference attendees because the vast majority of them are not actually paying to attend — and I don’t mean in the way that we don’t pay to attend.

    Most conference attendance is paid for by the employers of conference attendees, which makes the economics of it more similar to business travel, where business travelers are being reimbursed by their employer for reasonable expenses incurred.

    Having worked for many large corporations, I know all too well the uselessness of an individual employee attempting to apply logic to business travel guidelines.

    First example, you need to fly from Boston to Washington, DC.  Although direct flights are probably available at “reasonable” prices, your employer may force you to take three connections (via Chicago, San Francisco, and Dallas) just to save the company a few hundred dollars on airfare.  Logical to the employer — not to the employee who has to endure the “joy” of an 18 hour travel day.

    Second example, you want to stay at the conference hotel, which has a rate of $150 a night, but your company wants you to stay clear across town at a “preferred hotel” that has a rate of $200 a night.  You argue that the conference hotel is cheaper and its convenience eliminates the need for a rental car or other ground transportation expenses.  However, your employer has a bulk discount deal with the preferred hotel, which over the course of the year, actually does save the company money even though on occasion, some individuals will be inconveniced and have slightly higher expenses for a specific business trip.  Again, logical to the employer — not to the employee.

    Returning to conference tickets pricing, most conferences offer group discounts to employers for sending multiple employees to the event.  This price point, I would argue, is often the main draw, which is why you usually either see a large group or nobody at all representing a particular company at a conference.

    Also, an interesting analysis to perform would be comparing the pricing differences between “early bird” registration and “last minute” registration, both which get significantly discounted.  This is also similar to airline ticket pricing, where airlines try to entice you to book the airfare for your vacation six months in advance to lock in both a good price and a guarantteed seat (both of which are false), as opposed to waiting until the last minute to book a hopefully empty seat at a steeply discounted price.

    Reply
  2. Steve Putman

    I can’t argue with Jim – he makes some great points. I have two more to add:

    I think that a sophisticated ticket pricing scheme is beyond the scope of most conferences because they are only doing these conferences once a year. Even TDWI, which is four times a year, is not enough to justify the expense of juggling ticket prices like the airlines do, who have thousands of flights a year.
    A lot of companies have pared their staffs down to the bone over the last decades, so a lot of people who would otherwise attend these conferences can’t do so because of their responsibilities at the office. Sad but true – you become too valuable to train.

     

    Reply
  3. philsimon

    Thanks for the comments, guys.

    We’re all data guys so I would love to see analysis like the one that Jim describes.

    Steve – I can’t help but wonder if Qcue should provide a SaaS offering or an outright service to maximize conference revenue. I for one would spend an extra couple thousand if I believed that it would bring in more people.

    Reply
  4. Julie Hunt

    Following up with Steve’s point on “pared down staff” in many companies:  virtual conferences or well-enabled virtual attendance at conferences hopefully will grow. From what I heard, SAP (Sapphire last week) provided a decent benchmark for how to provide & support virtual participation.  Now the question is: what kind of fee model should come into play when people attend important conferences virtually?

    Reply
  5. study hotel management

    Steve and Jim really have great points. I much agree with most of what Jim have said. He really said all the truth about the employers and how they will deal with expenses in their company.

    Reply

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