Auckland International Airport Maximises Its Car Park Revenue with IDeaS

The Story

Putting the brakes on spreadsheets

As the gateway to the land of the long white cloud, the Auckland International Airport is Australasia’s third busiest airport, with passenger growth on the rise and now with over 21.1 million annual passengers. With strong growth set to continue, passenger numbers are projected to reach 40 million per year by 2044

With its airport car park facilities responsible for delivering $64.2 million NZ in FY19—a significant portion of the non-aeronautical revenue—maximising car park revenue performance is critical in driving high levels of overall profitability for the organisation. With approximately 12,000 car parks, and fluctuating capacity due to airport construction projects, it achieved 5.2 percent car park revenue growth from FY18 to FY19, including 3.8 percent year-over-year growth in average revenue per  car park.

In 2013, recognising that they had outgrown their manual revenue management and pricing practices, Auckland knew their forecasting and pricing capabilities with spreadsheets were limited and revenue opportunities were being missed. With online reservation business for car park continuing its rapid growth, Auckland needed an automated revenue management solution that would allow them to become more efficient and replace their manual processes, in addition to supporting their long-term strategies.

Auckland’s revenue management challenge was really twofold. Not only did they need a thoughtful approach to adopting a robust  revenue management strategy supported by the rest of the organisation, but they also faced difficulty accurately and reliably forecasting drive-up and pre-book business to make informed pricing decisions.

A dedicated industry advisor

It was important that Auckland implemented a revenue management roadmap that not only took into consideration their existing capabilities and strengths, but strategically enabled them to change how they performed in the future. With limited resources, Auckland opted to first partner with the Consulting Services team at IDeaS Revenue Solutions. This allowed them to evaluate their existing pricing structures and potential areas for improvement and revenue opportunity using IDeaS’ capabilities with big data analytics.

After implementing the online products and prices in a manual environment through their online reservation system, and through monitoring the effect of these adjustments on total car park revenue, Auckland began the second phase of their journey. This phase involved strengthening their revenue management culture and building confidence in their forecasting capabilities before moving into automation and dynamic pricing.

IDeaS worked closely with the Auckland team to ensure that their challenges in revenue optimisation for car parks were understood and addressed on an ongoing basis. The incorporation of innovative revenue management coaching allowed their team to examine concepts and learn new ways to think about optimising revenue using the revenue management system. The data sources informing the current reporting, business intelligence and the pricing decisions had to also be reviewed and interpreted accurately before its utilisation as a feed for any forecasting or future pricing decisions.

A technology-enhanced revenue strategy

IDeaS defined a roadmap with Auckland Airport that first re-examined the online products and prices recommended by consulting services, and created a product and price strategy that was right for the sophistication of a revenue management system. With the move toward automation, the airport was able to consider many more pricing options than could be managed in a manual environment. This also prompted deep analysis of the drive-up car park business, leading to recommendations that would improve overall revenue performance.

The next step in the journey was implementing IDeaS Car Park Revenue Management System (RMS) to provide accurate demand and occupancy forecasts prior to switching on the distribution of dynamic pricing decisions to the online booking channel. IDeaS Car Park RMS used its proprietary algorithms and scientific modelling to present Auckland with a clear view on their business, so
the airport was ready to distribute optimised prices—starting with car parks that would deliver the most value. Building on that experience, the airport confidently moved ahead with each facility.

Capitalising on the airport team’s existing revenue management skills, the tools are in place to perform tactical pricing activities where needed, while the overarching strategy is managed in a controlled and automated way. IDeaS Car Park RMS clients identify new opportunities to enhance revenue, outperform their competitors and improve their overall business performance. Available on demand via a software-as-a-service model, IDeaS Car Park RMS is a cost-effective solution for all organisations. This platform allows clients to develop rate structure strategies that optimise prices for multiple car park products with various lengths of stay and arrival dates.

Developed specifically for car parks, IDeaS Car Park RMS is the industry-leading automated and self-learning forecasting and revenue management software solution.