In today’s budgetry-constrained operating environment, income from car parking – the leading source of non-aeronautical revenue for many US airports – is argubaly more important to the bottom line than ever before.
Airports simply have to get things right when it comes to car parking or risk losing vital revenues to off-site parking operators that continue to aggressively take market share from them while giving little in return.
Below are our 10 tips on how to improve your airport parking RFP tender documents by supplementing the standard functional, technical and compliance requirements with commercial considerations that can drive parking revenues.
With the ever-increasing use of smartphones and the ubiquitous availability of Wi-Fi, it’s no secret that self-service in travel booking continues to accelerate. More and more consumers choose to research and book their flights, hotels and, increasingly, parking online or through mobile apps.
With electronic payments projected at almost 35 billion transactions in 2014 and mobile payments not far behind (Cap Gemini World Payments Report 2013), the implications for airports and airport parking are clear: our technology must embrace and harness the power of these channels.
And why not? Online and mobile channels provide airports with a wonderful opportunity to directly connect with passengers to offer services and upsells such as pre-booked and prepaid airport parking, fast-track security, VIP lounges, F&B and retail offers and other airport products.
Even better, these channels provide the ability to build databases of contact details and behavioural data that enable us to serve the customer better with targeted offers and communications.
Off-airport parking providers have been online for years. It is time that airports began to use these tools to compete effectively, and that starts with updated PARCS equipment that is equipped to interface with an online pre-booking service.
There is no need for lengthy software development. There are a number of off-the-shelf pre-booking services that have already developed interfaces to major PARCS providers. These vendors will provide airports with an integrated airport parking site, the opportunity to create and pre-sell airport parking products and secure payment processing.
Tip 1: Include in the parking RFP a requirement for an online pre-booking and prepayment service fully integrated with the airport PARCS, the airport website and all airport mobile apps, and readily available for in-path integration with the airport’s leading carriers’ websites.
Tip 2: Include a requirement to provide one or more highly reliable customer vehicle identification systems at entries and exits – credit/debit card in and out, license plate recognition (LPR), toll tag or RFID reading – all to be fully integrated with the airport PARCS.
Tip 3: Include a parking bay guidance/counting system in the RFP, particularly in the busier garages where people can have difficulty finding vacant spaces. This may include bay sensors or LPR at internal intersections to provide a ‘find my car’ feature, which can be integrated with airport information touch screens in the terminals, parking lots or even on shuttle buses.
Try new management techniques
Many parking management contracts at US airports are for the supply of staffing and supervisory services only. With few exceptions, they do not include any opportunity or incentive for the parking contractor to add value to the service. This limits the benefit of the contractor’s vast experience in operating commercial parking in city centres, for example, and may leave millions in revenue opportunities untapped.
Why have we seen some airports earning less than $2,000 per parking space when others are generating more than $8,000 per space per year?
Tip 4: Include in the RFP incentives for incremental revenue generation for parking management contractors – including a meaningful revenue share above agreed benchmarks to increase total parking revenues. Where the airport already has good parking management, it should seek proposals (from the operator or outside providers) for expert commercial management expertise, including revenue and yield management capabilities, with the specific goal of increasing total airport parking revenues.
Tip 5: Where airport management has limited capital available for investment in on-airport parking, it should consider a concession or public-private partnership (3P) for the development and operation of all
of the airport parking. Concessions are already in place in a number of airports and these agreements can provide a true incentive for increased revenue if drafted properly.
Shake up your organisation
The trend towards self-service we’ve mentioned above extends to more than travel booking; it also helps save time with airline check-in kiosks and bag tagging, so why not parking?
The traditional cashier and supervisor-based organisation at airport parking lots is no longer the most appealing to time-poor customers who may face long queues at the parking garage exit. It is also increasingly expensive to operate for airports. To speed throughput, most airports should now offer automated entries, pay stations in the terminals and a combination of cashiers and credit card only exit lanes.
In fact, in Europe cashiers at exits have virtually disappeared, with all transactions handled at pay stations or exit terminals and any manual intervention being provided 100% remotely by a small team in a central control room who address issues immediately as they occur through intercoms and CCTV.
Reducing staff is not about reducing service, the objective is to take advantage of technology in such a way that customers benefit through payment choices, faster transactions and throughput, and immediate responses to entry and exit issues.
Tip 6: Require proposals to reduce or redeploy parking operations head count, including cashiers, to lower costs and improve traffic flows at exits – payroll costs can be reduced by as much as 50%. This reorganisation requires intercoms at all entries and exits, and ideally CCTV, to enable centralisation of all control/management of the PARCS in an airport control centre to increase service levels and improve response times.
Match and exceed your competition
Compared to the off-airport parking operators, airports do not prioritise the marketing and promotion of their prime landside assets – their airport parking. As a result, passengers can be ill-informed about the quality and value of the parking services available on-airport.
Parking offers for walk-to-airport products are highly valued, and some airport remote parking is even cheaper than off-airport lots. However, without like-for-like comparisons with competing parking offers, airport parking products are neither top of mind nor favourably compared with the off-airport operators’ price claims, which may be misleading – for example, quoting prices excluding taxes, fees and fuel surcharges.
Tip 7: Include in the RFP a specific requirement for a defined marketing and promotional plan and agreed budget, including generic advertising of the airport’s website as the route to best-value parking and product/price promotions targeting agreed customer segments.
Tip 8: Require RFP respondents to set out specific programmes and investments in airport parking loyalty perks and programmes to reward regular customers.
The really successful off-airport operators have this down to a fine art, with free water, newspapers, coffee, extra days, bonus points and other benefits. However, the airport is in a unique position to cross-sell and promote a broad range of airport-only services and products to passengers.
Airports should benchmark against their best off-airport competitors, not only in marketing but in the products and services offered.
Tip 9: Require the successful contractor to include flexible rostering of parking shuttle-bus services to meet the requirements of the airport as these change over time. Flexibility in bus size should also be required. The branding and advertising on parking shuttle buses is valuable and should always be specified and controlled by the airport rather than left to the contractor/shuttle-bus operator.
Be prepared to innovate
Airports tend to operate within a very traditional business and technical model, in part because of the regulated nature of airside operations. This should not preclude the adoption of novel and innovative landside solutions and strategies that add value and enhance the customer experience at the airport.
Tip 10: Invite and be open to novel solutions that enhance the parking product and service for customers. Be prepared to share incremental revenues where real value is added and customer experience is enhanced.
Many of the value-added features included in our 10 tips have been gradually built into the successful parking operations at Dublin Airport, in Europe, and at other airports globally. When you are ready to upgrade your parking system, be sure you are maximising your investment by using the most up-to-date, nimble and successful practices worldwide.