AeroParker: Non-Aeronautical Revenue Increases for Airports

Non-aeronautical revenue issues for airports are well documented. Ancillaries include retail, F&B, car rental, property rental as well as parking - an airport’s own on-site parking proving the single highest margin product that an airport has the ability to sell directly to its customers.

Demand for a specific car parking purchase is driven by the airport offering the right product together with that product’s exclusivity, availability and price. When an airport can exercise control over all of these parking services, it is then and only then that it will start to see a real significant boost in non-aeronautical revenues. Of course an airports total parking revenue will be made up of passengers turning up on the day (roll up traffic) as well as revenue from passengers arriving having pre booked and paid for parking already.

So, for an airport in terms of pre book parking there are a number of considerations:-

1. Growth of overall parking revenue

Airports must continue to grow total parking revenue not just pre book revenues. Growth in parking means not sacrificing roll up parking revenues by simply offering reduced price pre book parking. Pre book parking is a value based sale. An airport should increase total parking by growing roll up traffic and increasing pre book revenues.

As far as pre book is concerned revenue growth is also linked closely to customer data collection and insight. Suffice to say with good quota management and understanding of future car park occupancy an airport should target passengers travelling to the airport by taxi or being dropped off by friends (kiss and fly) with appropriate promotions, in advance, that are built around pre book parking value-based offers to drive pre book revenues to the desired levels. This strategy will not eat into roll up parking revenues. Engaging with an organisation that has the expertise and consultative experience in airport parking digital marketing is always a great help here in this situation

2. An airport must be able to maximise revenue across all parking stock

It is not just all about volume or price. It is about optimising a mixture of the two. Selling too cheap and being sold out is a retailer’s nightmare. Pricing too high and having unsold stock is just as bad.

Understanding that there will always be roll up traffic on a daily or even hourly basis is vital. If an airport car park is fully booked, the missed opportunities will cost money. An airport must be able to use yield and revenue management technology to adjust the percentage or quota of pre book parking spaces available and their prices relative to expected total car park occupancy at a particular time based on optimising the revenues. So, if an airport has a view on occupancy by the hour, then when it knows that certain cars have left the car park earlier than expected but have pre-paid already, then that space can be offered for resale earlier and therefore generate more revenue than expected.

3. Managing the cost of sale of a pre book parking space is very important

Here distribution channels for an airport’s parking products are key. The levels of exclusivity that an airport achieves with its parking products is important. An airport can sell direct to customers or via 3rd parties, where a 3rd party could be a car park operator or a consolidator. The direct channel is higher margin but more maintenance, the indirect channel is less hassle but much lower margin. There is a fine balance between making your product too exclusive such that it impedes sales and making your products omni-available that they have reduced value to you.

A balance between direct and indirect is required but beware you must remember that if you as an airport elect to sell a product yourself directly to passengers via your website and you also want to cover your bases by creating 3rd party distribution channels with people reselling on your behalf, then you will more than likely end up competing with yourself in some areas.

4. As an online/mobile retailer selling its parking stock an airport must always be open

You are an airport but you are also a retailer. Online and mobile you are a 24/7/365 retailer who has to cater for all customers trying to purchase from you on all devices. If you can’t guarantee that, not only will you lose revenue but you will not be providing great customer service.

Our research shows three insights:

1. 22.9% of passengers view an airport’s car parking and ancillary pre book website or microsite on a smartphone of some sort. This is not via an app., but via a web browser.
2. You will still exclude potential customers, incur greater costs and operational issues if you invest money in building multiple mobile websites for specific types of mobile devices and not all.
3. If your online pre book parking shop front does not render automatically perfectly for a passenger no matter what smartphone device they are viewing on (this is called a responsive interface), then there is a 25% drop out from purchase.

To summarise, as an airport and a single brand retailer of your own parking product to achieve maximum incremental increase in pre book parking revenues you need to:

• Understand where pre book parking fits relative to roll up parking and how the two affect each other and where growth in pre book ideally comes from.
• Use software that will always be open to every single customer.
• Implement a responsive front end that has an administration area allowing granular revenue and yield management as often as other systems involved.
• Be mindful of your reseller distribution channels and what software they are using to manage their sales of your products.

About AeroParker

AeroParker is a specialist pre-book and pay e-commerce platform for airports including yield management which offers airports a direct channel to sell parking and ancillary products and services to passengers in advance, whilst building customer relationships for future commercial gain. With 15 years’ experience in airports, AeroParker works with airports such as Manchester, Cologne, Humberside and London Stansted and airport groups such as Avinor.