The hidden cost of flat pricing (and how dynamic pricing helps)

If you’re managing commercial operations at an airport or running a car park business, there’s a good chance you’re leaving money on the table. Not through poor service or inadequate facilities, but through something much more fundamental: your pricing strategy. 

Most airports still rely on flat pricing models that treat all demand as equal, all customers as identical, and capacity as unlimited. For car park operators, these models often stem from simple drive-up rates that get copied online without considering digital customer expectations. Yet none of these assumptions hold for airport operations, and the results speak for themselves: missed revenue opportunities, operational strain, and customer experiences that fail to meet expectations. 

The pressure is mounting. Airport commercial teams face increasing demands to maximise non-aeronautical revenue whilst car park operators compete against ride-sharing services like Uber and Lyft that have fundamentally reshaped ground transport behaviour. 

Meanwhile, stringent procurement processes require clear ROI justification, and lean teams struggle with manual pricing updates across multiple channels. 

For medium-sized airports, the challenge is finding the sweet spot between operational efficiency and commercial opportunity, whilst car park operators need straightforward solutions that work across their entire portfolio.

Why you need to reconsider a one-size-fits-all approach to pricing

For commercial directors and car park operators, flat pricing creates a false sense of security that masks significant revenue losses. When you charge the same rate regardless of demand, seasonality, or customer willingness to pay, you’re essentially capping your revenue potential during the times when passengers are most willing to spend more. 

During school holidays, major events, and peak travel periods, passengers demonstrate natural price tolerance when seeking guaranteed parking spots. They’ve planned their trips, booked flights, and need certainty. Yet flat pricing prevents you from capturing this additional value, leaving money on the table precisely when demand is highest. 

Operational strain without financial reward becomes a recurring problem when fixed pricing attracts high volumes of short-stay traffic during busy periods. Your team works harder managing increased turnover and capacity pressure, but your revenue doesn’t reflect that additional effort. 

For medium-sized airports trying to scale, this creates unsustainable pressure without the financial return to justify additional personnel. For car park operators, churn increases pressure on staffing, reduces space availability, and lowers average transaction value across your portfolio. 

The absence of behavioural incentives means you lose valuable tools for demand shaping and operational planning. Without price signals to encourage booking during quieter periods or off-peak travel, you can’t influence customer behaviour to spread demand more evenly or improve cash flow predictability. 

This particularly impacts car park operators trying to manage multiple sites, where coordinated pricing strategies could significantly improve portfolio-wide performance. 

The real cost of ignoring customer behaviour

The impact of flat pricing extends beyond simple revenue loss to create operational and strategic challenges that build over time. For airport commercial teams accountable for revenue targets and car park operators seeking business expansion, these costs create significant competitive disadvantages. 

Underpricing during peak demand: Underpricing during peak demand represents the most direct revenue loss. By using fixed pricing, you’re essentially subsidising high-demand customers who could afford higher rates, reducing the revenue available for infrastructure investment or business expansion. 

Lack of product differentiation: Product differentiation failure occurs when flat pricing treats all parking products equally, ignoring the premiums that passengers place on convenience, proximity to terminals, or enhanced services.

For example, customers understand that covered parking near main terminals offers more value than surface parking requiring shuttle buses, yet flat pricing fails to capture this difference in perceived value. 

Conversion friction: Conversion friction develops when pricing doesn’t reflect customer segment needs. Business travellers may view short-stay rates as reasonable, whilst finding long-stay options expensive, whilst leisure passengers might see the opposite. This mismatch reduces booking conversion across both segments, limiting total volume growth and creating customer satisfaction issues that impact repeat business. 

Lack of strategic planning: Strategic planning limitations emerge when flat pricing provides no mechanism for gathering actionable demand intelligence. Without pricing tools to test customer price sensitivity, you can’t develop the market insights needed for strategic decisions about facility investment, service expansion, or competitive positioning. 

How does dynamic pricing solve these challenges? 

Dynamic pricing doesn’t require complex algorithms or constant price changes. At its core, it means aligning pricing with real customer behaviour and demand patterns to optimise both revenue and operational efficiency. 

Revenue optimisation: Revenue optimisation becomes systematic when prices adjust to reflect demand levels and customer willingness to pay. During peak periods, rates increase to capture additional value from customers who prioritise certainty over cost.

During quieter times, competitive pricing maintains volume whilst optimising utilisation. This approach matches price to genuine customer value perception and market conditions. 

Demand shaping: Demand shaping transforms pricing from a passive revenue tool into an active operational management system. Early booking incentives improve cash flow predictability and operational planning whilst reducing last-minute capacity pressure.

Peak period pricing helps manage capacity constraints without requiring additional infrastructure investment. These tools become particularly valuable for medium-sized airports where operational flexibility is crucial for managing seasonal variations. 

Differentiated products: Product differentiation becomes financially viable when dynamic pricing supports tiered offerings that reflect genuine value differences.

Premium locations near terminals, covered parking, flexible cancellation terms, and additional services can command appropriate premiums when pricing reflects their enhanced value proposition. This enables car park operators to justify facility investments and create sustainable competitive advantages. 

Enhanced operations: Operational efficiency improves when pricing signals influence customer behaviour to reduce complexity and improve resource utilisation. Spreading demand more evenly across time periods reduces peak-time staffing pressure and makes better use of capacity during quieter periods, improving overall operational productivity and customer experience. 

How to get started – without overwhelming your team 

The transition from flat to dynamic pricing doesn’t require immediate system overhauls or complex technology investments. Many successful implementations begin with manageable changes that deliver measurable results whilst building internal confidence and expertise. 

Use rules-based pricing: Rules-based adjustments provide immediate impact through simple rate modifications during predictable demand periods. Seasonal increased pricing can be implemented manually or through basic system updates, whilst small premiums for last-minute bookings capture additional value from time-sensitive customers.

These approaches work particularly well for car park operators managing multiple sites who need straightforward implementation across their portfolio without heavy reliance on external development teams. 

Segment products: Basic product segmentation creates revenue opportunities through clear differentiation between parking options.

Separating premium locations, covered spaces, and flexible booking terms into distinct product tiers allows appropriate pricing for each value level. For airports, this might mean clearly differentiating terminal-adjacent parking from off-site options requiring shuttle services. 

Price based on season: Seasonal pricing variations reflect natural demand patterns through different rate structures for peak and off-peak periods. This becomes particularly manageable for medium-sized airports where quicker decision-making processes allow for more agile pricing responses. 

Incentivise your customers: Early booking incentives encourage advance reservations during lower-demand periods, improving cash flow predictability whilst spreading operational workload more evenly. For car park operators, these incentives can drive direct bookings rather than relying entirely on third-party distribution channels. 

The strategic choice facing your business 

The airports and car park operators that thrive in competitive markets understand their customers’ behaviour patterns and price accordingly, using pricing as a strategic tool for revenue optimisation, demand management, and customer experience enhancement. 

Your current flat pricing model may feel safe and predictable, but it’s likely costing you more than you realise. Every peak period where you could capture additional value, every opportunity to shape demand through pricing signals, and every customer segment that values premium services differently represents unrealised revenue potential that competitors using dynamic approaches are capturing. 

The question isn’t whether you can afford to move away from flat pricing. It’s whether you can afford the opportunity cost of maintaining pricing approaches that don’t reflect market reality or customer behaviour. 

The industry landscape is continuing to evolve as new transport options emerge, and customer expectations change. Those who adapt their pricing strategies to match these realities will build sustainable advantages, whilst those maintaining outdated approaches will find themselves increasingly disadvantaged in the market. 

Unlock the revenue potential hidden in your pricing strategy 

Sign up for our guide, ‘Why your pricing strategy is costing you revenue – and what to do about it’, coming Wednesday, 15th October.

You’ll discover why flat pricing limits revenue, how dynamic pricing and product segmentation can transform results, and the four foundations of revenue-driving pricing: understanding demand, segmenting products, pricing for value, and introducing simple rules. 

The guide also highlights quick wins you can implement immediately and tips for building long-term growth.

Reserve Your Copy