Sydney Airport Automates Its Parking Revenue Strategy with IDeaS

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Manual calculation of demand for each car park – a slow and unreliable process

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Car Park RMS
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  • Parking revenue management aligned with marketing initiatives
  • Overall strategy now managed automatically

The Story

Upgrading an unreliable manual process

Sydney Airport, located in New South Wales, is the busiest airport in Australia and serves 28 countries and 95 destinations worldwide. This expansive network drove a record 44.4 million travelers through the airport in 2018 alone, representing a 2.5% increase on the previous year, and the airport forecasts 74 million passengers by 2033. The economic impact is significant, and the Sydney Airport precinct contributes more than $38 billion AUD to the economy each year.

This continued growth has meant that demand for the thousands of spaces at the airport’s parking facilities has also increased. The airport’s parking and ground transport revenue stream reached $162.1 million AUD in 2018. This figure represents 10% of the airport’s total revenue.

With the parking and ground transport contribution to non-aeronautical revenue being a significant component of the airport’s success, Sydney Airport initially introduced an online booking service for parking in 2011. This allowed them to attract more price-sensitive customers and capture more data to better understand and align their parking products accordingly. However, they discovered that online booking alone wasn’t sufficient, and they needed a way to determine the right price to offer travelers at the right time. This was a challenge, since forecasting expected demand for each parking facility was a relatively slow and unreliable process. Using historical data with estimates on growth—combined with spreadsheets and business rules to adjust price points—was also time-consuming and limiting.

Reaching the limits of their available tools, and looking for a more scientific way to price, Sydney Airport began exploring options for revenue management automation that would both support and improve their growing parking performance.

Finding the right solution

Developing revenue capabilities and improving performance is a journey, one that inspired Sydney in how they structured their processes, technologies and culture. Their approach to incorporating the principles of revenue management within their organization was organized and thoughtful, including their comprehensive evaluation of available partners that could meet their needs.

During the evaluation phase, the team at Sydney Airport met with another long-standing client of IDeaS to learn about their experience with the capabilities of the IDeaS Car Park Revenue Management System (RMS) and the IDeaS Consulting Services team. This was important because Sydney was looking to partner with a provider with a strong background in revenue management and a reputation for delivering success.

After completing a thorough vendor review cycle, Sydney Airport narrowed their selection down to two respected companies: IDeaS and a partner they work closely with in other areas of their business. During an ensuing competitive analysis, IDeaS’ evaluation uncovered and identified revenue practices that would provide the airport with areas of improvement and opportunity. With their strong revenue management expertise and in-depth industry knowledge, IDeaS and their consulting team stood out as a future revenue management partner.

Automating & enhancing revenue strategy

Sydney Airport worked closely with IDeaS’ consulting and project teams to focus on their data, process and structure, communication and active involvement and support of their key stakeholders. Undertaking a complete review of the airport’s historical pricing structure, IDeaS used advanced SAS® analytical tools to identify and recommend a more optimal pricing structure. With the advantage of IDeaS Car Park RMS dynamically and proactively selecting the best possible selling price, the airport confidently introduced a completely new approach to pricing and a new product mix.

Throughout the project, communication and collaboration remained at the forefront of every decision made. Not only was the team diligent in engaging with their key stakeholders for engagement and support, but they also extended this principle to another very important group of people: their parking clients. Sydney Airport’s team was adept in extending, communicating and capitalizing on the principles of revenue management within their marketing initiatives.

Recognizing that the processes they were taking on had numerous benefits to their clients, Sydney Airport employed a fresh marketing approach that explained the changes they were making to their pricing—for the benefit of their customers. This new approach ensured their customers paid the best available rate for exactly what they needed, instead of picking a parking package that was the closest fit.

Sydney Airport’s journey will continue its evolution with the tools in place to perform tactical pricing activities where needed, while their overarching strategy is managed in a controlled and automated way. IDeaS Car Park RMS clients identify new opportunities to enhance and grow 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 that allows clients to develop rate structure strategies that optimize prices for multiple parking products with various length of stay and arrival dates.

Developed specifically for parking, IDeaS Car Park RMS is the industry’s leading automated and only self-learning forecasting and revenue management solution.