When you are starting your first escape room business, positioning and pricing strategies are two of the hardest but most important things to get right.
Price is more than just a number; it’s a reflection of the value you provide, the expectations you set, and the balance you strike between affordability and profitability.
In the competitive escape room market, your pricing can be the deciding factor for potential participants. Here we’ll delve into the science of escape room prices so that you can find the ideal strategy to lure in more customers.
Cost-plus vs. value-based pricing
There are two ways to determine the price of your escape room games: Cost Plus and Value-Based pricing.
A cost-plus pricing strategy takes the price of maintaining and operating your escape room business and adds a little extra to the price so that you make a profit. Before implementing this, you’ll need to break down your escape room cost, including rent, employee salaries, utilities, and other operating costs.
This strategy works well for escape room businesses that want to keep prices competitively low while maintaining their profitability.
A value-based pricing strategy determines the price based on your competitive advantage and your brand, or the perceived value of your games. For example, if the other escape rooms in your local area charge $25 per person, but you offer a superior game experience — such as a 60-minute escape room, compared to their 45-minute games — you might consider charging $30 per person instead.
You can also switch pricing strategies as your company evolves. Once your brand recognition increases, you can start to charge more for your games.
Pro Tip: Check out the Escape Room Startup Guide to learn insider tips about how successful escape room owners launched and positioned their businesses.
Public, Private, or Hybrid?
When learning how to start an escape room business, you will quickly run into a hotly debated topic: public vs. private pricing. The question owners in the escape room industry are debating is whether escape room businesses should allow players to book public rooms, private rooms, or give them the option to decide for themselves. Let’s take a look at the pros and cons of public rooms versus private escape experiences, specifically in terms of pricing
Public Pricing
Escape rooms which exclusively offer public rooms allow escape room players to book any time slot as long as maximum capacity is not reached. Unless players purchase the entire room capacity, they could be joined by strangers.
Pros:
- May fill rooms more efficiently, especially during peak hours.
- More affordable for smaller groups.
- Allows smaller groups to play games that require a higher number of players.
- Some people enjoy playing with strangers.
Cons:
- Under-filled rooms might be leaving money on the table.
- Rooms without enough players may need to be canceled, which creates a bad customer experience.
- Some people have bad experiences playing with strangers.
- Some players assume that rooms are private and become disappointed or angry when they arrive to learn they have to play with another group.
Private Pricing
Escape games can be a fun activity for groups. A private escape party could be a great entertainment option for birthday parties, corporate events, and bachelorette parties.
This is why some escape room facilities offer rooms for private events. In that case, the group is required to pay to book the entire room, regardless of the number of players.
Pros:
- Guaranteed high order value for every booking.
- No need to cancel bookings for under-filled rooms.
- Allows small groups to play by themselves.
- Avoids the risk of bad customer experiences from playing with strangers.
Cons:
- Requiring all groups to book the entire room may make the cost higher for individual guests, leading to fewer bookings.
- Depending on the price per ticket and the number of guests, a full public room might generate more revenue than a private escape experience.
- Small groups cannot play rooms or puzzles that require a certain number of players.
Hybrid Pricing
Escape room businesses that allow players to choose between public and private rooms. If your escape room booking software supports this capability, players can choose whether they book a private room (if the room is not yet booked out), share the room with others (by only booking their own spots), or to join a public room that is partially booked.
Pros:
- Allows customers to choose the best option based on group size, preference, and cost.
- May generate higher revenue and higher customer satisfaction ratings.
Cons:
- Depending on how it is presented to guests, this might appear complicated or confusing.
- Some booking software do not offer this functionality.
While each pricing option has its own pros and cons, the hybrid pricing option has the potential to lead to the best results (both in terms of revenue and customer experience). However, if you want to offer hybrid pricing, it’s important that you use escape room booking software that provides the functionality, and makes it easy to understand.
Pro Tip: At Xola, we offer advanced booking features like hybrid pricing, which can be easily understood when checking out online. To learn more about how Xola can help you start an escape room business, and the pricing options available, schedule a demo with one of our product specialists here.
As the escape room industry continues to grow, there is more data on revenue, booking, and average room prices. We uncovered the top changes in our latest escape room industry report.
