Part 3 - Manage Your Revenue
Parking Reservation Software (PRS) is the world’s most comprehensive parking software solution. Offering so much more than online reservations, this system also has revenue management tools!
Did you know your online parking reservation solution has tools to maximize your parking revenue? The ability to book and prepay an online parking reservation is an absolute must in today’s ever-evolving digital landscape, but a reservation system can also help manage your rates to sell the right product for the right price to the right parker at the right time! This parking management strategy is known as Revenue Management (also known as Yield Management) and it has been used by airlines, hotels, and car rental for decades. Now Uber, the parking industry, and other travel sectors are seeing the benefits of Revenue Management.
The Data Collected
Online reservation systems collect valuable customer data that is critical to Revenue Management. Historical customer data is the foundation for making strategic decisions and is one of the major benefits of having a parking reservation system.
The Revenue Management process begins with collecting customer data then using that data to track, study, and predict customer buying behavior.
It’s important to note that some third parties do not share this data with the parking operator and it should be clear who owns the data collected when making a parking reservation system decision.
The Revenue Management strategy is a three-legged stool, each leg interdependent upon the others. Here are the three legs and how they work:
Leg 1: Dynamic Pricing
Dynamic pricing (often called surge pricing) is flexible pricing. Pricing adjustments are made based on real-time consumer demand and available inventory, giving a parking operator nimble pricing particularly when the demand is high or the lot is empty. Uber’s surge pricing, for example, charges riders premium fees when the demand is highest. Dynamic pricing gives parking operators the ability to charge the right price at the right time.
Reservation systems equipped with dynamic pricing tools allow the operator to set price tiers based upon historical trends, seasonality, day of week, time of day, consumer demand and available inventory, all of which can be determined using historical data.
Within the reservation system, these price tiers can be set up and tracked separately on unique channels, further honing the science of dynamic pricing.
Leg 2: Inventory Management
Parking space inventory management is easily managed within a parking reservation system. Managing parking space inventory is done by strategically assigning blocks of spaces to specific price tiers, based upon customer demand forecast and dynamic pricing structure.
Parking space allotment works closely with dynamic pricing to determine the right number of spaces to assign at the right price at the right time. This same strategy is used by airlines and hotels for allotting numbers of seats and hotel rooms to different price tiers; as the lower priced tiers sell out the pricing moves to the next tier until the highest price is reached.
Parking reservation systems equipped with this tool allow the operator to set aside spaces, set up black-out times and dates, and release spaces in a real-time environment.
Leg 3: Forecasting Demand
Demand forecasting is a critical piece of Revenue Management because both the dynamic pricing and the inventory management legs are heavily dependent upon the accuracy of the process. Having access to historical customer data and a robust reporting function are both key to prediction ability and are often packaged within an online parking reservation system.
Historical customer data is tracked and analyzed, and the findings are then used to reach logical conclusions based on past events and present trends. For example, historical data for past holidays, seasons, weekdays and weekends, paired with current trends or circumstances such as weather, gives an operator the ability to make an intelligent forecast for probable parking demand.
A solid parking reservation system will be equipped with robust reporting that will support an operator’s ability to forecast demand. It’s important to know exactly what reporting is available when making a parking reservation system choice.
Revenue Management is a proven strategy that when done properly will increase revenue. Careful selection of a parking reservation system equipped with these tools will give you everything you need to boost your parking revenue.
If you would like assistance in locating a parking software provider, contact PRS at firstname.lastname@example.org.
About Parking Reservation Software (PRS)
PRS is a scalable parking software solution for privately owned or government entity parking operations. Built to help operations run smoothly, increase reservations through marketing services and enhance customer experience, PRS is a comprehensive solution for any size parking operation.