Question of the Day - 26 October 2025

"Surge pricing" is a dynamic pricing strategy where the cost of a product or service fluctuates in real time based on supply and demand.

Supply and demand is as old as capitalism itself, but surge pricing dramatically reduces the time frame. In terms of the casino sundries shops, a bottle of water that sells for $9 on a day that's cold and wet might be raised to $12 the next day when it's hot and dry. Or the price of a candy bar changes throughout the week from $7 one day to $10 the next, based on some algorithm somewhere.

Though this strategy has been used by the airlines and hotels for some time (the term for those businesses tends to be "yield management"), "surge pricing" is most associated with ride sharing. Uber adjusts the prices of its rides to match driver supply with rider demand; when there are more riders than drivers and customer wait times are long, Uber increases its normal fares on the fly. Whether it's known as surge pricing or yield management, it's the same principle of maximizing profits from fixed time-limited resources -- airline seats, hotel rooms, shared rides -- and yes, even restaurant meals. That's why most restaurants no longer post menu prices on their online menus. 

Surge pricing also applies to the parking fees at Strip and downtown garages. Again, the fixed number of parking spaces are at a premium over the weekends and during major events. The difference is that those prices are mostly posted and consistent, while you might not expect toothpaste and sunscreen at casino sundries shops to go up and down based on hotel occupancy rates.  

It probably shouldn't come as much of a surprise that point-of-sale technology can adjust prices for beer, chips, and bottled water, along with spaces, seats, rooms, and rides, according to demand. Nor would it be a shock that, the way things are going around here, as well as in the greater economy, it's a widespread practice.