In today’s highly digital landscape, U.S. airports looking to better reach customers and thus grow revenue have to think differently about how to reach buyers before their competitors. Added to ever-changing technology is increased competition from off-airport operations and ridesharing apps. Both factors trigger airports to seek new ways of recapturing parking market share from this number two source of airport revenue.
Now the same strategies used by airlines and hotels to influence customer behavior are available for airports. It’s called Yield Management.
What is Yield Management?
Yield Management (aka Revenue Management) is a flexible pricing strategy that utilizes customer data to gather, track, analyze, forecast and influence customer behavior for the sake of maximizing revenue. Simply put, it is the concept of selling the right product to the right customer at the right time and at the right price.
How Does It Work?
There are three elements that are intricately integrated into Yield Management and can be adjusted to yield the highest revenue:
- Demand Forecasting
Making a forecast of future demand based on past events. In other words, demand forecasting predicts the probable demand for parking based on past events and present trends. The use of historical data is critical to forecasting, especially in terms of holidays, seasons, week days and weekends.
- Dynamic Pricing
Flexible real-time price-setting based upon customer demand and available inventory. This allows airports to make pricing adjustments based on available inventory, supply and demand and seasonality, just like an airline or hotel. Such factors as seasonality, time of day, day of week, competitor pricing and customer location and demand will determine the right price at the right time.
- Inventory Allocation
Reserving inventory for a specific purpose which then makes it unavailable for other purposes. In parking, inventory allocation is assigning spaces to specific price tiers, based upon demand forecast and dynamic pricing structure. Just like an airline or hotel uses inventory allocation for seats and hotel rooms, an airport can assign sets of parking spaces to specific price tiers from low to high. As the low spaces sell out, then the pricing moves to the next tier, then the next tier, until the highest price is reached.
Using these elements, airports can leverage real-time historical customer data and other analytics to strategize and execute Yield Management, the secret weapon for maximizing parking revenue.
Finding A Solution
Parking technology at this level of sophistication combines reservation software, robust reporting and Yield Management capabilities. While there is a plethora of parking reservations systems to choose from, not all of these solutions are created equal.
The most effective Yield Management software that is optimized for airports should contain at a minimum these features:
- Real-time central reservation system for data gathering
- Omni-channel capability to allow for channel management, reporting and segmentation
- Real-time reporting
- Logical user interface system
It is critical for an airport to carefully select a software provider that will ensure the most comprehensive system to help them reach revenue goals.
Did you know that RezPort is the only proven US-based parking technology that can deliver on all of these criteria? To learn more about how to improve the airport parking process, contact us and follow our conversation on LinkedIn and Twitter.