Dynamic pricing is transforming parking management into a major economic performance lever. But who is this strategy intended for? What are the concrete benefits of dynamic pricing? And how can it be implemented effectively?
Xavier Zakoian, CEO and founder of Kowee, puts the emphasis on demand prediction in Parking Revenue Optimization. Though theoretical, this simple illustration will show the differences, in terms of revenue, between : Accepting the demand as it comes VS Selecting the lengths of stay that best contribute to the optimum..
Dynamic pricing, or yield management, is a pricing strategy that involves adjusting parking space rates in real-time based on demand, parking duration, reservation anticipation, and many other parameters. This method, already proven in other mobility sectors, allows parking operators to maximize their revenue and offer a more personalized customer experience.
The system relies on:
Analysis of historical entry and exit data, often spanning several years.
Real-time information from the parking facility, such as entries, exits, and the current number of vehicles present.
Accurate demand forecasts, estimating the expected volume of entries not only by date but also by entry time and parking duration (Length of Stay - LOS).
Consideration of seasonal cycles and special events in developing these demand forecasts.
An optimization engine that uses these detailed forecasts to calculate the best mix of parking durations at any given time, to maximize potential revenue. This optimization targets revenue, not directly occupancy rates.
At Kowee, this data is continuously analyzed by algorithms that analyze this data to predict demand and automatically adjust prices with each new request. The goal: to offer the right price, at the right time, to the right customer, in order to maximize the marginal contribution of each space sold.
Summary
Dynamic pricing in parking facilities involves adjusting prices in real-time to maximize revenue and offer a personalized customer experience.
At Kowee, we have developed a data-driven, connected, and scalable solution that places parking duration and predictive analysis at the heart of pricing strategy.
The results are concrete: increased revenue, better valuation of parking facilities, commercial agility, and enhanced customer satisfaction. Our ambition: to support parking operators in the transition to intelligent, agile, and profitable management, serving the mobility of tomorrow.
