Five tips to help parking businesses make smart decisions and take steps toward recovery during the pandemic.
The surreal events of the past few months have all the makings of a fiction story, and the full extent of COVID-19’s global impact on our health and economies is yet to be understood. In real-time, we observe industries that have quickly mobilized to provide solutions to meet immediate needs and make a difference. The commitment and resourcefulness of so many in medical services, as well essential workers to keep vital goods and services flowing, is appreciated by us all.
Through it all we’ve witnessed mass disruption to the travel industry. Yet as significant as it is today, this will not last, and there will be a return to travel despite the current uncertainty. For now, as airline routes and airport operations have been cut worldwide, how do we navigate our way through this unprecedented period? Here are five practical tips from IDeaS’ parking industry experts to guide airports in making smart, informed decisions during this difficult time.
1. Maintain Pricing
If demand is low, should prices be low as well? During this exceptional period the answer is “no.” With extensive travel restrictions in place, remaining demand is typically price-insensitive. Decreasing prices will do little to attract demand but will make it harder to increase rates again in the future.
Those in the travel industry during the 2007-2008 global financial crisis may recall many hotel operators dropped prices hoping they would gain market share. In most cases that didn’t happen, and more importantly, it took the industry almost seven years to restore prices to previous levels. The clear message here is: “Don’t panic, and avoid rash decisions and discounting.”
Some airports may make a business decision to offer free parking for a period. If you do so, you must ensure you position it appropriately, without devaluing your product. Develop and apply a pricing strategy for different conditions to build a stable foundation for future growth.
2. Control Costs
As revenue declines, airports will need to consider ways to reduce costs. This may include temporarily closing some parking facilities, especially remote lots requiring buses or shuttles. Airports should determine whether shuttles can be grounded, reviewing policies with vehicle insurance providers with a view to temporarily remove those shuttles from operating.
With a likely excess of empty spaces, there may be other avenues to explore. Check if companies such as car rental agencies need storage to park excess inventory. Offer spaces and services to local health agencies. Empty lots may even have the potential to be repurposed as drive-thru COVID-19 testing sites, providing a positive contribution to your community and aiding a faster recovery time for all.
3. Communicate Appropriately
What is important to a traveler will be different during this time. Priorities are likely to surround security and safety in getting from point A to point B. In digital strategy and marketing activity, price promotions should take a back seat to messages that promote certainty, safety, flexibility and empathy. Strength of relationship and communication is extremely important for any organization during this crisis.
Travelers are unlikely to be booking trips on the whole, so messaging should switch to providing advice around processes implemented to ensure traveler’s health and well-being, as well as any additional flexibility that may have been added to products and services for when plans change. In this current environment, secure parking enables travelers to stay in control of their journey, minimize interaction with others, and feel more confident where travel may be a necessity but comes with a level of anxiousness.
4. Provide an Exceptional Customer Experience
Travelers understand we are in extraordinary times but may still appreciate a choice between lower-priced and premium offerings. More than anything though, they will not want to see opportunistic price-gouging or limited choices that compel them to spend more than normal. Rather, given that most locations have spare capacity, use this opportunity to deliver increased value.
Offer upgrades for pre-book customers at little or no cost. Revisit your cancelation policies and offer increased flexibility. Providing goodwill during these challenging times can drive increased loyalty in the future, alongside the value and operational benefit realized today.
5. Bring Forward Deferred Maintenance
Managing maintenance projects with full parking lots can be challenging. This period of low demand may present an opportunity to complete deferred maintenance such as striping and painting, filling potholes and detailing shelters and shuttles, ahead of when travel resumes. Much of these types of maintenance can be carried out safely during current social distancing measures and will provide an improved overall customer experience when there is a return to travel.
On the topic of maintenance, now is also a good time to do an audit of your revenue management and online selling systems to maintain data quality and integrity. Perform a physical space count and update your systems accordingly. Audit your parking products, review competitors, their product offering, and update seasonal pricing structures. Your parking product descriptions and terms and conditions should be reviewed in your online booking engine, as well as Google Analytics product mapping for optimized marketing tracking.
We are clearly in the midst of an extraordinary event that is changing traveler behavior and the face of business for the near term. But like other exceptional events of magnitude, this too shall pass. The travel industry will rebuild. Our natural curiosity to discover new places might be paused but is certainly not extinguished, and people will want to meet in person and travel the world once again.
With this in mind, maintain a level-headed approach to managing your business at this time. Take a long-term view of what’s in the best interest of your travelers and airport. Pause to make informed decisions as much as possible, and work with trusted partners to help you weather the storm.
- Airport Parking Revenue Management in the Time of COVID-19 - April 1, 2020
- A Day in the Life of a Parking Revenue Manager - December 18, 2019