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..
Understanding Dynamic Pricing in Parking Facilities
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.
Who is Dynamic Pricing Relevant For?
Dynamic pricing is primarily intended for:
Urban parking operators: city centers, train stations, multimodal hubs, commercial areas, where demand fluctuates significantly depending on the time, day, or events.
Airport parking managers: faced with attendance peaks related to holidays, conventions, or seasonal movements, and a wide diversity of customer profiles (short and long stays).
Local authorities and public operators: seeking to optimize rotation, enhance their assets, or regulate urban mobility.
Private entities: shopping centers, hospitals, campuses, wishing to maximize the profitability of their parking infrastructure.
In summary, any structure with a limited capacity parking facility, facing variable demand and wishing to manage its economic performance, can benefit from dynamic pricing.
How Much Revenue Does Dynamic Pricing Generate?
One of the main advantages of dynamic pricing is the direct increase in revenue. Rather than simply aiming to fill spaces, this approach maximizes the value generated by each space.
Revenue increase: Operators implementing a dynamic pricing solution generally see an increase in their revenue of at least 10%. For some, this increase can even reach 20-25%.
Optimization of marginal contribution: By promoting the right mix between short and long stays (Length of Stay or LOS), dynamic pricing maximizes the value generated by each space, going beyond simple occupancy rates. The optimization targets revenue, not directly occupancy rates.
Demand period management: Real-time adjusted pricing encourages entries during off-peak periods and better values spaces during high demand periods, thus capturing maximum value.
Use Cases and Concrete Results
Thanks to this type of solution, many parking operators have been able to:
Increase their revenue by at least 10% on average, with peaks of up to +20 to +25%. Nantes Atlantique Airport, for example, generated an estimated net gain of around €800,000 in the first year by adapting its discount policy for pre-bookings. Marseille Provence Airport also saw rapid benefits in terms of occupancy optimization and revenue growth.
Better manage parking usage, reducing periods of underutilization and adapting the offer to avoid unprofitable saturations, while meeting occupancy constraints.
Improve customer satisfaction through more agile pricing that meets passenger expectations, particularly through attractive online prices.
Take the example of an airport parking facility: during periods of high demand (holidays, events), the algorithm anticipates peaks in attendance and adjusts prices to maximize the value of different reservations (especially long-term) while maintaining an adapted offer for short stays during off-peak periods. Result: optimized revenue, better flow management, and improved customer experience.
Why Dynamic Pricing is Essential in the Parking Sector
The parking sector faces specific challenges:
Limited and perishable capacity: each empty space at any given time is a permanently lost revenue opportunity.
Fluctuating demand: attendance varies according to time, day, season, local events, or customer habits.
Heterogeneous customer behaviors: some book in advance, others seek flexibility, some prioritize price, others the guarantee of a space.
Faced with these challenges, dynamic pricing is the most effective solution to adapt supply to demand in real-time, avoid revenue losses, and meet the expectations of each customer segment.
The Kowee Difference: Data Expertise and Business Support
At Kowee, we have made dynamic pricing our core business, with an approach that goes well beyond traditional methods based solely on occupancy rates.
We have developed advanced algorithms capable of:
Taking into account each customer's parking duration, a key factor often overlooked by traditional solutions.
Analyzing in real-time all parking data (entries, exits, bookings, historical data, events...).
Predicting future demand and adjusting prices on the fly, for each customer segment.
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.
