May 02, 2012
Revenue Management and Parking elements
zzz...boring! Yea, the topic of revenue management may be the perfect cure for your latest insomnia but it's also become critical in your profit generations. Revenue management, also known as yield management, is the process of understanding, anticipating and reacting to consumer behavior in order to maximize revenues or profits. I will use other words, by manipulating your price, companies can maximize their profits.
So let's put our attention with Hotel Parking to determine if revenue management is appropriate:
1) The product or service is perishable. Parking spaces are a perishable commodity - if a space sits empty, the lost income cannot be made.
2) Capacity of the product is limited. A parking facility has a certain number of spaces and more cannot be added without additional costs or construction.
3) Market Segmentation - There are discounts and early bird specials, but with RM consulting, the potential for parking facilities to increase revenue is even greater.
4) Advance purchase - Often done through reservation systems, to enable forecasting and manipulate price and demand.
5) Variable cost of a parking spot is low - the main parking variable cost for parking attendants and maintenance. Sell an additional parking spot, and the revenue contribution to the profit is up.
6) Demand Variation - demand for parking varies throughout the day. Revenue Management parking consulting can smooth the demand curve by stimulating demand during low demand times and increasing revenue during high demand times.
The parking industry is the prime candidate for RM approach.
Now stop a good minute, grab your notes and think your respective parking facilities in your hotel. How many parking spots do you have? Do you have a control system (parking, tickets, watchman...). What are your costs associated to it? Do you pay a rent for it? What's your pricing?
Contact us, for your Parking Revenue management project, and we will organize it for you.
Maxime @ RSVP - Hospitality