Unlocking the Potential of Airport Car Parking

Airport car parking has emerged as a powerful revenue driver, often surpassing income from retail operations. A new CAVU-sponsored white paper, ‘Maximising the Value of Airport Car Parking’, published by specialist airport commercial advisory firm, The Mercurius Group explores the commercial dynamics of this lucrative sector and introduces strategies to maximise its potential. Having estimated the value of airport car parking industry in Australia and New Zealand at A$700 million, Mercurius predicts this figure could be propelled to a turnover beyond the A$1 billion mark through the adoption of best practice strategies. 

Taking an industry-wide view, CAVU is proud to sponsor this insight into how airports can unlock the full potential of car parking. Here we summarise some of the highlights.  

1. Car Parking Revenue is Crucial for Airport Profitability

Across Australia and New Zealand, car parking contributes an average of 12% to airport revenue, with some facilities reaching 25%. Internationally, the impact is even more significant, as evidenced by Manchester Airports Group’s (MAG) FY24 results, where car parking accounted for 30% of total revenue. Given the high profit margins, the effect on overall airport profitability is substantial. 

Car parking’s role extends far beyond financial gains. It offers airports a unique opportunity to create meaningful, direct interactions with passengers, potentially revolutionising the entire airport journey. In ‘Maximising the Value of Airport Car Parking’, The Mercurius Group emphasises the need for a comprehensive commercial strategy encompassing space planning, land use allocation, and the adoption of innovative technologies to enhance the customer experience. 

If we’re to consider the areas in which airport business operates, most relationships are business-to-business (B2B), where the airport deals with businesses who have relationships with customers. From airlines and retailers to car rental operators, it’s often another party that has a direct relationship with the end user. 

Through airport parking, a new world of business-to-consumer (B2C) business unlocks a world of possibilities for airports to materially grow their car parking business – and some of their other businesses as well. This offers more than improved revenue, as we can create and manage the relationship with consumers directly to guide them towards our own intended outcomes. 

Embracing Digital Touchpoints

Technology integration is reshaping airport parking management. Online booking platforms and dynamic pricing models offer convenient, advanced reservations while optimising occupancy rates and gathering valuable customer behaviour data. Mobile payment systems and automated guidance through the booking process streamline the parking process, reducing traveller stress and providing crucial insights for service improvements. 

Online booking tools are becoming a far more common product feature within airport car parking portfolios and account for an increasingly large portion of airport bookings, particularly in the longer stay market where they can make up over 90% of the share of revenue. Short-term parking in Australia continues to be dominated by drive-up revenue.  

Promotional marketing also highlights the guarantee of parking availability and a certainty on pricing. The growing use of online booking tools by consumers provides ongoing opportunities to build relationships, drive revenue and unlock a powerful data source for customer insights. 

Cross promotional activity can leverage multiple aspects of the commercial portfolio, including parking upgrades, retail offers, or lounge access deals. This can also stretch to additional third-party products such as insurance and car rental.  

Personalisation: The Next Frontier

Understanding passenger preferences is crucial for delivering superior customer experiences. By analysing parking data and customer insights, airports can create personalised offers and targeted marketing campaigns. For example, frequent flyers might receive discounts on long-term parking, or travellers could be offered bundled services that include parking and other airport amenities. 

These personalised experiences not only increase customer satisfaction but also encourage repeat usage and brand loyalty, creating a virtuous cycle of improved service and increased revenue. Each car park user creates a data footprint covering the product used, length of stay, and transaction value: 

• Transactional data, such as parking product usage and length of stay, provides valuable insights into customer preferences and travel patterns, which can enhance retail strategies, targeted advertising, and aviation development.  

• Online booking data enriches this picture by revealing customer contact details, residential locations, and preferences for promotional offers, enabling effective cross-selling of food and beverage, retail, and lounge products.  

• Additionally, the use of credit card payments offers an opportunity to collaborate with credit card companies for deeper insights into customer demographics, purchasing habits, and residential data, facilitating more targeted marketing and business development. 

2. Connecting the Disconnected

The implementation of a robust and effective car parking strategy requires a holistic parking systems approach, utilising tools within each parking element to inform, implement and manage initiatives, and maximise value from the parking business. 

CAVU advocates for a comprehensive and customer-centric approach to optimising airport car parking. By leveraging data analytics and understanding passenger behaviour, airports can tailor their car parking offerings to meet specific customer needs and preferences. This involves implementing dynamic pricing models, enhancing the booking experience, and integrating innovative technologies such as automated license plate recognition (ALPR) and mobile payment systems. CAVU’s approach focuses on creating a seamless and efficient parking experience that not only boosts revenue but also improves customer satisfaction and loyalty. 

Through The Global Travel Marketplace, CAVU aims to make travel more seamless and enjoyable by connecting all touchpoints across the travel ecosystem. Our clients range from small regional airports to international travel hubs around the world.  

Our solutions include: 

Ecommerce platform – propel : Powering The Global Travel Marketplace, purpose built to drive growth, increase revenue, and deliver a seamless booking experience for customers. propel, which can be deployed across any travel related sector, enables clients to manage multiple travel products from FastTrack security lanes to e-sims through an easy-to-use Intranet, and enables clients to deploy all products into one single basket transaction. 

Revenue Management Services – Intelligent Performance: Allowing clients to maximise their revenue opportunities, our Revenue Management Service goes beyond just pricing, leveraging data and insights to predict demand, devise strategy, and optimise return – all supported by an in-house team of experts. 

Digital Marketing Services – Intelligent Performance: Our inhouse team of experts provide clients with tailored digital marketing strategies designed to drive awareness, increase conversions, and build customer loyalty. 

Passenger Experiences: Physical passenger experiences including Airport Lounges and Private Terminals, that can be deployed in any airport, carefully designed to offer more choice and improve the travel experiences for customers and, in turn, extract more value from the passenger journey. 

Conclusion

Maximising the Value of Airport Car Parking, from The Mercurius Group’s white paper, and sponsored by CAVU, underscores the immense potential for airports to boost car parking revenues through innovative strategies and best practices. By focusing on revenue optimisation, customer-centric approaches, and strategic implementation, airports can significantly enhance both financial performance and customer experience. 

As the industry evolves, embracing these holistic approaches to car parking management will be crucial for airports to maintain competitiveness and ensure long-term success. The future of airport revenue lies not just in optimising existing streams, but in reimagining the entire passenger journey, with car parking playing a pivotal role in this transformation. 

To fully understand the potential impact car parking can have on airport revenue, download ‘Maximising the Value of Airport Car Parking’ and start building your strategy.