Australians can expect the cost of attending their favourite in-demand events to increase, as more concerts, gigs and sporting events rely on “surge pricing”.

Surge pricing, the act of increasing the cost of tickets to events if there is high demand, has been hitting the headlines after consumers in Australia and the United Kingdom were shocked at the cost of attending tours by bands like Oasis and Green Day.

The practice is commonly most experienced when booking an Uber, airfares and accommodation, but it is becoming more prevalent in the entertainment industry.

Before buying tickets you may be told they will cost a certain price (or in some cases no prices are listed at all), and then when going online to buy tickets consumers will find that prices have either increased for certain “in demand” ticket categories, or are being sold at astronomically high prices.

The practice meant some Green Day tickets were recently on sale for as much as $500 under Ticketmaster’s “dynamic pricing” system.

Dr Meg Elkins, a behavioural and applied economist at RMIT University, said Australia is on the precipice of surge pricing becoming standard practice for large entertainment events.

“There needs to be a warning that surge pricing is happening and consumers need to see the scale of that ticket’s price,” she said.

“It isn’t going to scale down. It is only ever going to scale up and we saw that with a couple of events this year.”

Dynamic pricing for Green Day’s tour of Australia wasn’t the only example to spark backlash from fans, with Grand Prix and tennis fans also experiencing surge pricing at events earlier in the year.

Elkin said that Live Nation, Ticketmaster and other ticketing companies have defended the practice as being good for the industry.

“They think it’s better that they get the price increases, the events and the artists, rather than the scalpers,” she said.

“As long as they have that line and they believe that line, we are going to see surge pricing.”

High demand

Increasing prices during periods of high demand is not illegal, but businesses must be clear about what price consumers will pay and cannot mislead them, according to the Australian Competition and Consumer Commission (ACCC).

An ACCC spokesperson said “there is a potential for consumers to be misled by dynamic pricing”.

“If a business uses dynamic pricing when advertising, marketing, and selling goods or services, they need to ensure that they do not mislead consumers, and consumers are aware throughout the transaction process about the cost,” the spokesperson said.

“Whether or not a business’s use of dynamic pricing may be misleading will depend on the circumstances involved in each case, including what representations a business may have made to consumers about their pricing in promoting the event and when selling tickets to the event.”

Watchdog needed?

The UK’s Competition and Markets Authority launched an investigation into Ticketmaster’s use of surge pricing after fans weren’t warned about the use of ‘in demand’ pricing before arriving at the checkout.

Fans of Oasis were shocked to discover they were being charged £355 for standing tickets at their reunion show. Photo: Getty/AAP

Elkin said that the Albanese government has proposed bringing in a surveillance authority following the supermarket inquiry earlier in the year and it could potentially cover entertainment venues and vendors.

“We had this back in the 1980s and early ’90s with the Hawk-Keating government,” she said.

“I also think a cap on prices is potentially reasonable.”

She said behavioural responses for budgeting and accounting for spending will be affected if surge pricing becomes a more widespread practice within Australia.

“We want to know how much we need to allocate, so if Taylor Swift is going to cost $349, often people will set money aside for that,” Elkin said.

“If it is more than that and you get to the checkout and there’s a timer for five minutes and you either keep the ticket or lose it, I think that is where we are going to see consumers get upset.”