Being the Head – Commercial of a leading global airport, John has a keen sense of the pulse of non-aeronautical revenues. He is always on the hunt for smarter ways of increasing business and achieving or in fact exceeding the planned numbers! One of his favorite topics of discussion revolves around research to determine smarter ways of increasing non-aero revenues. No wonder then that he had instructed his team of managers that bright, young trainees be given opportunities to research on similar topics and come up with substantial findings. Presently John browsed through a write-up put together by a trainee.
What is Revenue Management?
Revenue management aims to sell the right product to the right customer for the right price. The key to this is to understand how customers perceive the value of the product and continually adjust the offered prices to match this value. A revenue management system fine-tuned for your needs enables you to:
- Better understand customer behaviour and the revenue generating process
- Provide a product mix suitable for maximizing the profitability of your customer base
- Accurately predict demand fluctuations and determine corresponding changes in pricing
- Assess and compare the daily/weekly/monthly performance
With data-driven tactics that predicts consumer behaviour at the micro market level and matching pricing strategies that optimize product availability and price, it is possible to maximize revenue growth!
How is revenue management relevant for airport car parks?
Virtually all major airlines and hotel firms have their Revenue Management Systems. What is it that these industries have in common with car parking?
First of all, the product is similar. There is a limited number of seats, rooms or parking spaces to be sold, and the products are perishable. This means that nobody buys a seat to a flight that has already departed, and you can’t sell today yesterday’s parking spot.
Secondly, the demand varies according to seasonality, for example, the month or the day of the week. The willingness to pay varies too. A person who is in a hurry is willing to pay a higher fee to park closer to the terminal. Late bookers accept higher prices for flights and rooms as well.
Finally, there’s the possibility to sell in advance. Once the right booking system is in place, all the major components that make revenue management work so well are in place.
Add to this the fact that airport car parking analytics can be instrumental in increasing the non-aeronautical revenues significantly and hence in turn enhance the overall airport revenues
So we have a case in point. Clearly airport car parking analytics is a good candidate for revenue management solutions. This is where GrayMatter’s Airport Analytics (AA+) Car Parking Revenue Management (CPRM) solution comes to the picture. CPRM is a demand driven pricing system for car parks in airports. The following features of CPRM are particularly remarkable
- Dynamic daily pricing with predicted future pricing
- Factors historical data analysis, daily decision optimization and re-modelling in case of deviations in prediction vis-à-vis actual
- Recommends pricing for pre-booking
- Customer segment specific pricing
- Ability to override model and perform what-if analysis
- Adherence to business rules
- Factors seasonality, special events, regulations
- Factors competitor pricing
- Factors demand patterns while determining discounts