How Museums Come Up With Their Admission Prices

With Museum's recent funding being under pressure and numbers being down, the "perfect price" to charge visitors has become a complex and important question for museums. This article I found by Daniel Grant, explains how many many museum attractions, specifically in the north-east, have had recent issues on what to charge their customers and how to increase their profits. This has become a complex and controversial question for many of these sites as funding increasingly gets harder to come by and the financial pressure is so tight. The result they came up with is a "hodgepodge" of approaches as they try to decide the most efficient way to maximize revenue while still giving the most customers access. This has to do with the 'customer' portion of the External Market Environment. If museums can't get their customers in the door because of high prices and the struggle with finances, this could be a major problem for museums.

While opening up gift shops and cafe's do generate more revenue, admission prices are the crucial fix to this issue. Many museums in the known tourist locations have agreed and decided on a $25 cost that the customers will have to bear. Director of New York's Acquavella Galleries and former director of the Metropolitan Museum of Art says that $25 "appears to be a prevalent number for admissions, based on comparable prices", but also states that if you don't agree, "you don't want to be out of line with others". The $25 universal price also depends on what city, the types of attractions and where you're located. In 2015, the Indianapolis Museum of Art was facing a debt of $125 million and a mandate to stop drawing from their cash reserves. So the admission price rose from free to $18 for adults. 

They want the increased admissions to apply manly to one target market group, which is tourist. They plan to impose it on visitors who are not New York state residents starting this month. Meaning you must have a valid New York ID or be a student in Connecticut, New Jersey or New York to get the lower price. The logic behind it all is that the increase in revenue will come from the out of state visitors, who make up a percentage of 50-55% of the total visitors. Here is an example of what admissions currently look like in an art gallery in Chicago.

ART INSTITUTE OF CHICAGO

CHICAGO RESIDENTS: Adults: $20 | Seniors: $14 |

Students: $14

ILLINOIS RESIDENTS: Adults: $22 | Seniors: $16 | Students: $16 | Teens: $16

OTHERS: Adults: $25 | Seniors: $19 | Students: $19 | Teens: $19

FREE: Children under 14; Illinois teachers; LINK and WIC cardholders; Illinois residents (Thursdays 5-8 p.m. and some winter weekdays); active-duty military and their families (Memorial Day-Labor Day); and some other groups.

Across the country many museums worry about their local & young art fans market going down. Places with this perspective are adapting a variable pricing system, which makes it easier for all visitors and the local art fans. These prices look much like those of the Crocker Art Museum in California which are; $10 for adults, $8 for seniors, college students and service members, $5 for kids ages 7-17, and free admission for children 6 and under.

An alternative some have seeked to the higher prices is offering a "freebie" day.. Something like the 3rd Sunday of every month is free for all guest! 

The prices will most likely continue to rise and fall and all depend on what city you are in. But the main focus is finding what works best for these critical funding issues while still keeping their frequent loyal customers. I myself, enjoy going to museums but I always try to check and see if they have a "student discount" or sometime of "freebie" day. So I am guilty of that and can now see why museums are struggling because I am sure I'm not the only one who does this. 

By: Daniel Grant 

Feb 19, 2018

https://www.wsj.com/articles/how-museums-come-up-with-their-admission-prices-1519095781