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By the Charts: Can You Charge for a View?

Just how much?  Does it have anything to do with height?   

Wonwhee Kim, Partner at Pro Forma Advisors, LLCA Parks Database Feature

By Wonwhee Kim, Founder of the Park Database (left)

At the Park Database, we recently had the opportunity to complete a project on a tower attraction. In researching the comparables we came across a few interesting insights that we thought would be worthwhile to share.

By the Charts: Can You Charge for a View? A Pro Forma Advisors Feature

  • The Eiffel Tower (middle of the list) has been charging visitors to access to its observatory since its inauguration in 1889; visitation during the six-month long, 1889 Exposition was nearly 1.9 million. 
  • Some may be surprised to note that there is often a huge difference between the true height of a building/structure, and the height of the actual observatory that visitors may be able to access – while the Burj Khalifa is the tallest building in the world (literally towering above all others on the list), its actual observatory height is just a few meters taller than the recently opened Tokyo Skytree, placing it second on the list behind the Shanghai WFC.

By the Charts: Can You Charge for a View? A Pro Forma Advisors Feature

  • As with everything real estate, the location of the observatory matters (perhaps more than height).  The two observatories in Chicago, on the Sears Tower and John Hancock building, charge $18-$19 for views that are higher than those from the Empire State Building and Rockefeller Center (Top of the Rock), respectively, which charge $27.  Similarly, the Chinese buildings – Canton Tower, Shanghai WFC, both charge approximately $36 US (150 RMB), in order to be competitive with neighboring attractions.
  • The quality of the view does not always correlate with higher heights.  Top of the Rock’s view of midtown Manhattan is nearly 100 meters lower than the Empire State Building’s view, and is widely considered to have the superior view.  This may also explain the pricing at the View from the Shard (London) and Sands Skypark (a view across Singapore Bay in an infinity pool), whose ticket prices are much higher than those of similarly tall attractions.  Could it also explain the Pearl TV Tower’s pricing relative to the Shanghai WFC, although both are located in Pudong?  
  • Finally, we’ll be the first to admit that just using height to determine pricing is an incomplete method.  Operational realities, the competitive context, price signaling strategies, capacity constraints, and the visitation mix all matter.  Office buildings that are capacity-constrained by elevators and operational purposes can afford to charge higher prices than otherwise, and towers that rely on foreign visitors (such as Ostankino) are priced according to international, instead of domestic standards.

Did we miss anything?  Please let us know!

By The Park Database

Graphs: Pro Forma

Image: Kind courtesyThe View from The Shard

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