Why is Dynamic Pricing in Car Parks Key to Boosting Revenue?

A sizeable proportion of non-aeronautical revenue streams is attributable to car parking, with research indicating Heathrow, Gatwick, Manchester and Stansted airports generated a staggering £673 million in car park revenue in 2023. 

Such financial opportunities mean car park operators are keen to maximise their revenue streams, and dynamic pricing in car parks has a key role in ensuring these opportunities are maximised, all while maintaining all-important customer satisfaction levels. 

Driven by data-led insights, dynamic pricing in parking continues to play a fundamental role in optimising revenue, occupancy rates, and demand. 

So, what is dynamic pricing in car parks, and why should operators pay attention?

What is Dynamic Pricing in Car Parks? 

Dynamic pricing in car parks isn’t new – it’s a common strategy used in airports worldwide. 

It involves adjusting parking fees in real time based on various factors such as flight schedules, seasonal travel peaks, and historical booking patterns. 

For instance, during holiday seasons or times of high passenger traffic, prices may increase to reflect higher demand, while off-peak periods might feature lower rates to encourage usage. 

This model allows airport car park operators to increase their revenue by aligning pricing strategies with passenger behaviour. 

By using data and predictive analytics, operators can ensure that spaces are used efficiently while offering value-driven pricing to travellers. 

Dynamic pricing in car parks is a key tool in meeting the unique demands of airport environments, where occupancy levels can vary. 

How is Dynamic Pricing in Car Parks Beneficial for Car Park Operators? 

1. Increased Revenue

Dynamic pricing in car parks ensures that spaces are priced to match demand. For instance, during peak hours or special events, prices can be increased to reflect the increase in customer requirements. 

Conversely, during off-peak periods, lower prices can attract more customers who might otherwise avoid using the car park. This balance means operators can consistently maximise revenue to meet varying demand. 

2. Improved Occupancy Rates

Flat-rate pricing often leads to inefficient occupancy: car parks may be full during peak times but underused at quieter hours. 

Using dynamic pricing in car parking incentivises visitors to use the service during off-peak hours. Customers may be encouraged to park earlier or later in the day if rates are lower, increasing overall usage. 

3. Improved Customer Experience

Dynamic pricing in car parking presents operators with the scope to offer tailored pricing options that appeal to different customer segments. Early-bird discounts, loyalty programmes, and pre-booking incentives are just a few examples of how operators can enhance the customer experience while driving revenue. 

Additionally, transparent communication about pricing changes helps customers understand the value they are receiving, improving trust and the likelihood of repeat bookings. 

4. Data-Driven Decision Making

Using a dynamic pricing model in car parks requires collecting and analysing data, which can also inform broader business strategies. 

Insights into parking patterns, customer preferences, and demand fluctuations can help operators refine their services, improve resource allocation, and identify new revenue opportunities. 

5. Sustainability Benefits

Dynamic pricing can contribute to sustainability by reducing congestion and optimising space utilisation. By encouraging off-peak parking, operators can minimise traffic bottlenecks and reduce emissions from vehicles circling for parking spaces during busy periods. 

How Can Operators Introduce Dynamic Pricing in Car Parks? 

There’s no doubting the benefits of using dynamic pricing in car parks – but what do car park operators need to get started? 

1. Invest in the Right Technology

As we’ve mentioned, dynamic pricing in car parks is dependent on real-time data collection and analysis, so parking management software is essential. Look for systems that integrate with booking platforms, payment gateways, and occupancy sensors. 

2. Analyse Demand Patterns

Understand the factors that influence parking demand at your location. Are there nearby attractions or events that create spikes? What are the peak and off-peak hours? Use historical data to identify trends and forecast future demand. 

3. Test and Optimise

Begin with a pilot programme to test different pricing strategies. Monitor key performance indicators (KPIs) such as revenue, occupancy rates, and customer feedback, and adjust your pricing models accordingly. 

4. Communicate with Customers

Transparency is critical to gaining customer acceptance of dynamic pricing. Use clear signage, app notifications, and website updates to inform customers about pricing changes and the reasons behind them. Emphasise the value and flexibility they’re gaining from this approach. 

5. Monitor and Refine

Dynamic pricing is not a set-it-and-forget-it solution. Continuously monitor performance and refine your strategies based on new data and customer insights. The more adaptable your approach, the more successful it will be in the long term. 

How Can Propel™ Support Dynamic Pricing in Car Parking? 

Our Propel™ platform is designed to support car park owners and operators in introducing dynamic pricing.  

Propel™ provides a comprehensive suite of tools that simplify implementation, from real-time data analytics to user-friendly pre-booking systems, allowing you to set optimal prices, improve occupancy rates, and deliver a straightforward customer experience. 

Built to evolve with your business, Propel™ provides the flexibility to help operators adapt to changing demand patterns while maintaining control over operations, while advanced insights and integrations allow for informed decisions and maximised revenue. 

Propel™ ensures that you have the technology and support needed to transform your car park into a high-performing, revenue-generating asset. 

Get in touch and learn how to introduce dynamic pricing as part of your strategy.