When tackling the challenge of customer acquisition and retention, parking operators and parking asset owners can layer another tactic on top of their other efforts: listing configurable amounts of parking inventory on third-party reservation platforms.
Doing so is not a replacement effort to the operator’s direct channel or drive-up business; rather, it’s a supplementary one.
Third-party reservation platforms (or “aggregators”, as they’re commonly referred to in parking) serve up parking options in their apps and websites to loyal, growing consumer bases, process credit card payments and take on the onus of merchant of record, and provide service and incentives to retain customers if something goes awry.
Operators and owners can activate third-party consumer marketplaces alongside other levers they’re pulling for customer acquisition and retention, which may include signage, drive-up digital payments (scan-to-pay & tap-to-pay), and partnerships with businesses, venues, etc. in the microclimate.
The benefits to using aggregators are many, but there are apparent challenges, too.
In his 2020 dissertation titled “An Empirical Investigation of the Effect of Mobile Channel Introduction on Parking Revenues”, industry leader Todd Tucker, President @ ParkingLogix, empirically proves that utilizing aggregators to sell parking inventory can have a significant impact on revenue.
These channels have millions of users and sophisticated, sweeping marketing strategies.
They’re in the business of building massive consumer marketplaces, so they invest heavily in pay-to-play marketing channels such as search engine marketing, digital advertising, pay-per-click campaigns, and paid partnerships.
In other words, it’s a huge visibility boost for the operator on the aggregator’s dime.
Marketing is, by definition, a metrics-driven engine. As a result, channels have extensive data on top-of-funnel activity, including app downloads, web visits, searches, and conversions.
This is in addition to the detailed reporting on occupancy, rates, transactions, and booking patterns that they serve up in their consoles.
All in, operators and owners can see customer activity across the journey to identify customer preferences at key inflection points.
However, Tucker identified something else:
The largest impediment to this value creation is the cost of labor associated with managing the channels.
This is troublesome for both sides of the marketplace: supply (parking operators and asset owners) and demand (aggregator / third-party reservation platforms).
And due to their pricing models (common scenario: commission + fee per transaction), operators know that if they’re going to maximize yield of inventory they’ve allocated for online sales, it’s mandatory that they’re always charging optimal rates based on factors like:
- Advanced booking window (how far ahead of time are they purchasing?)
- Average duration (how long as they staying?)
- Occupancy data (when is the facility busiest?)
- Events in microclimate (when can the operator charge more?)
- Average transaction value (how much are spaces selling for online?)
Operators know that in an ideal world, they’d be incredibly hands-on with managing rates and inventory for each aggregator, but the labor required is astronomical.
On any given day, a medium-to-large sized parking operator is providing top-tier service to dozens of clients at hundreds of locations, each with their own unique considerations. There’s simply no time to sit in front of a computer all day, adjusting rates.
Ultimately, what we all care about is the bottom line.
It’s a matter of assessing economics and market dynamics to understand if the commission paid to these channels, and the labor required to manage them, will pay off.
This assessment is still complicated and challenging, but less so today than it was a mere decade ago due to advances in technology in the parking industry.
This is primarily due to feats of engineering – such as APIs and integrations that enable the open flow of data – and vendors partnering with one another and building flexible technologies that work together for the operator, so that adding new tech doesn’t mean adding new silos.
The challenges of data standardization and centralization are pervasive in parking due to the amount of technologies on the market.
They’ll remain so as we, as an industry, work together towards defining universal standards for how we share and surface data.
In the meantime, innovative operators/owners and technology vendors are finding ways to make different technologies speak the same language and pull in data for a big-picture view of online and drive-up activity that allows adjustments to be made rapidly and proactively without adding extra work to the operator/owner’s plate.
A detour for a brief personal anecdote:
Our team built our software platform for the centralization management of multiple aggregators to address this pervasive issue of systems fragmentation and the inefficiencies created as a result.
Before we were Ocra, we were event parking operators around the Los Angeles Coliseum, and we used many consumer demand channels as possible to drive revenue and optimize yield of parking assets.
But it didn’t take too long before the labor required to log in to multiple seller consoles every day to set and manage rates and inventory on a per-channel basis started to take its toll.
Problems that using multiple disconnected aggregators created included:
- Selling the same spot more than once
- Missing opportunities to raise rates during periods of high demand
- Having to manually reconcile disparate reports at the end of every month
To increase margins and scale the operation, we needed reliable software to make multi-channel management more efficient, prevent slippage and misuse, and save hours of employee training – so we built it in house.
Today, over 50+ operators and asset owners utilize our software for dynamic inventory allocation, centralized rate management, and all-in-one real-time reporting to more efficiently manage aggregators for better yield.
In addition to new tech, including ours, we’re seeing the emergence of revenue management as a prominent function in parking.
Other industries like hospitality, real estate, and travel, which are a few years ahead of parking, data-wise, have these functions.
Parking is catching up and catching on, gradually overcoming the two main challenges of revenue management: getting the data and using the data.
Often, when operators add technologies to their stack, it’s because they want to deliver a better customer experience, online and onsite, and to collect data about behavior and utilization along the way.
Where tech vendors come in is in the form of integrations and partnerships.
They collect the data, centralize it, and pull out the most important points so that operators don’t have that layer of manual analysis.
That’s an operational solution – less labor – and also proves out massive returns on ROI that justify the investment many times over.
To wrap up, third-party reservation platforms present a compelling revenue opportunity for operators and asset owners; after all, they spend millions of dollars to get consumers’ eyes on spaces and have entire talented teams engineering search and purchasing flows to optimize conversions.
But with their fees, in order to make aggregators make sense for the bottom line, operators need technologies and insights for more effective management of multiple platforms.
With data that lets them price for anticipated demand and dynamic inventory allocation models (like the one we’ve developed for Ocra that puts all online inventory in one big “bucket” that all channels can race to sell) that eliminate oversolds and remove the revenue ceiling for high-performing channels, operators will see better margins.
Want to learn more about Ocra’s software and managed services for parking operators, asset owners, and hotels with underutilized parking assets? Book a demo with our CEO or email info@getocra.com.
