An interview with Guy Barnes, Head of Global Sales, Parking, IDeaS. By Ross Falconer
Just like a hotel room or aircraft seat, parking spaces are a perishable asset. Quite simply, if a parking space isn’t filled, it isn’t generating any revenue for that day.
As Guy Barnes, Head of Global Sales, Parking, IDeaS, explains, if a parking space is filled at a low price when travellers are prepared to pay more, the airport misses out on the opportunity to capture additional revenue. “When factoring in various lengths of stay and different willingness to pay, maximising occupancy and price becomes a complex puzzle. Many airports today still use a one-size-fits-all approach to pricing, leaving considerable revenue on the table. By taking a data-driven approach, airports can optimise occupancy across their parking facilities and maximise revenue by selling the right parking product to the right customer, at the right price, at the right time.”
Avinor Oslo Airport announced last August that it is partnering with IDeaS to optimise revenue growth for its 11 car parks. “It is important to recognise that applying data analytics and practicing revenue management is a journey,” says Barnes. “To be successful an airport needs to be ready to embrace change, drive a revenue culture, and make an investment in resources and organisational values that will provide new commercial performance on a sustainable basis. Avinor has begun by instituting a revenue management culture. Such adoption is critical to take full advantage of any opportunity to drive better revenue.”
At Oslo, the first step was to carry out an analysis of the products sold across its car parks. A new product set was determined, with strategic pricing enabling the airport to manage different customer segments and varying demand. “As a simple example, like many airports Oslo is very busy in the summer, so it was necessary to create products and pricing that harness that demand,” Barnes explains. “The next step is to implement the automated revenue management system – a cloud-based software tool that generates daily demand forecasts and sets pricing and product availability by car park, arrival date and length of stay. The automated system eliminates spreadsheets and manual data entry, delivering pricing decisions directly to the pre-booking system.”
Meanwhile, it was announced in February that IDeaS has partnered with Raleigh-Durham International Airport (RDU) to implement demand-based, dynamic pricing technology to optimise capacity for 18,830 parking spaces. “While the concept of demand-based dynamic pricing in the wider travel industry is not new, RDU is one of the first airports in the US to further invest in its future by transforming its commercial strategy for parking,” Barnes comments.
Parking demand typically exhibits regular patterns based on time of day, day of week, and seasonality. IDeaS’ predictive analytics tools are designed to take this a step further, ensuring historical transactions, competitor rates, and forecast parameters such as price sensitivity, probability to purchase, length of stay, and uncertainty influence the demand forecast and demand-based pricing decisions.
“Armed with an accurate, 365-day forecast, commercial managers can make better business decisions with confidence. While the system does the daily tactical work, commercial managers can now be proactive and strategic in growing their business with their sales, marketing, and e-commerce teams,” Barnes concludes.