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How Disney Does It

My son visited the Walt Disney World complex in Florida and pointed out the methods used to spread demand temporally. Coupons for 30 percent discounts on restaurant food purchased before noon or between 3PM and 4:30PM are available. Merchandise coupons for 20 percent discounts are given for use between 9AM and noon. Both coupons are offered to shift demand rightward at non-peak times.
Why do this? Disney trains its workers extensively, so that to a large extent labor costs become fixed costs. To spread those costs – to maximize labor productivity – it makes sense to reduce the peak demand for labor. Spreading these costs also has the virtue of reducing the negative reputational impacts in the labor market that would accompany layoffs that might occur if demand were more variable. An additional virtue is that spreading customer demand helps the parks’ reputation with consumers and allows them to spend less time in line – and thus have more time to spend more money! (HT: DJH)