What are the key considerations for an airport in implementing a direct channel for car park and ancillary pre-booking, and what are the potential resulting incremental revenue benefi ts?

Abstract

In the last 10 years adverse market conditions, increased competition amongst airports, and pressure from low cost carriers to reduce their costs has meant for airports aeronautical revenues do not cover their associated costs. It is therefore clear non-aeronautical revenues, such as parking, critically determine the financial viability of an airport. However, non-aeronautical revenues are also under threat because off-site car parks are sprouting up adjacent to airports, undercutting airport prices. Moreover airlines and other resellers cross sell airport parking, grabbing a portion of airport revenue. Airports must therefore implement strategies to defend, increase and create new streams of non-aeronautical revenue. One area where airports can succeed in creating new and incremental nonaeronautical income is through directly selling car parking and ancillaries to passengers before they arrive at the airport. This paper reviews strategies that airports can implement in pre-book parking. It exemplifies how, with best of breed car parking and ancillary pre-booking software that allows yield management of pricing based on (i) demand for spaces (ii) time of arrival at the car park and (iii) how far in advance a booking is made, then significant incremental and new revenues can be achieved.