Selection of event tickets for bundling in sports and entertainment industry

Abstract

Most sports and entertainment firms offer season tickets first, and they allow purchasing single tickets at a later date. Basic decision problems within this context are the determination of optimal time at which switch from bundled tickets to single tickets should occur and the decision of which event tickets to include into the bundle. In this paper we focused on the second decision problem. For a given schedule of events, where ticket demands follow a Poisson Process, the tickets of a certain number of events are bundled and a discount is applied to the prices of these bundled tickets, with the aim of increasing total revenue. We find increase and decrease patterns in total revenue as the time slots of bundled events vary. With the help of these patterns, we develop a heuristic approach that creates easy-to-use business rules for the selection of profitable bundles for a given schedule.