Key Takeaways: Post-Pandemic Growth with Dynamic Pricing
Updated: Apr 16, 2021
Key learnings from our webinar with Todd Tucker, SVP of Market Development of Arrive, Peter Owusu-Opoku, Asset Manager of LaSalle Investment Management, Dr. Wen Sang, CEO of Smarking
State of the Industry: Less Than 50% Recovered as of March 15th
Commuter Behaviors & Parking Demand Has Shifted
Surveys have found that people prefer a hybrid mode: 50% remote, 25% work from home, and 25% in the office
Commuters shift away from public transit, a recent survey showed that 52% of commuters who previously relied on public transit are using it less frequently or not at all
As vaccination availability and re-openings rapidly change, it’s not enough to update parking rates seasonally
Traditional Pricing Strategies Cannot Accommodate for the Fluctuating Demand
Determining rates on your historical data, location, or competitor rates is not sufficient
It doesn’t consider the demand of each unique market nor does it consider the remaining daily supply
Frankly- it’s too slow to capture the revenue opportunities or to help you create demand
Dynamic Rates Optimize Rates to Increase Sales & Revenue
Smarking's dynamic pricing solution uses the real-time and predicted demand to assign the optimal price that maximizes sales and profits.
Saves time: Gets rid of the analysis needed to determine the appropriate rates for each location
Reduce costs: You can do more with less
Increases revenue: Adjusts the price point throughout the day to capture revenue opportunities
How Smarking’s Dynamic Rates Work
The algorithm learns the dynamics of the location
The more data that’s available, the faster the algorithm learns the unique demand fluctuation of the location.
Factors that impact demand include: day of the week, time of day, location, holidays, and weather conditions.
Rates are automatically updated throughout the day
AYM responds to the parking demand by updating the rate multiple times a day and assigning the optimal price (400+ rate options) for that unique location
Rates are updated in real-time
Set it & forget it - Smarking tracks the performance
During implementation, parking managers can set the parameters: operating hours, max and min price, or event days
After that, operators can let the program run and learn from transaction data
Do Reservation Apps Impact Your Transient Demand?
A doctoral study by Todd Tucker, showed that online sales channels proved to create additional demand parking.
The study was conducted at 30 parking locations, over the course of 180 days, totaling 5,400 total observations.
Results Of The Study Indicated That Online Sales Channels:
Contribute a significant amount of revenue contributor to brick-and-mortar facilities
Improve revenue per space
Attracted new commuters
Do not cannibalize the demand of transient parkers
“The results show resounding evidence that online channels grew the pie, it didn't just move money from one channel to the other” - Todd Tucker, SVP of Market Development, Arrive
Commercial & Residential Landlords Leverage Dynamic Pricing
Within one month of activating Smarking’s dynamic pricing at their Chicago apartment building, there was a 754% revenue increase, an estimated annualized revenue uplift of $25,344.
Given the success in Chicago, the owner activated AYM at their New York garage within a high-rise mixed-use property
Resulting in a +43% month-over-month avg revenue growth within five months
Pricing Strategies for Recovery: Dynamic Pricing & Online Sales
Since June 2020, Smarking’s dynamic pricing engine (AYM) has generated a 95-250% revenue increase for online sales, producing $90,000 - $200,000 of additional revenue per year.
Online sales channels are now ~3x pre-pandemic levels, an incredible feat given that the industry on average is down -60%
“Smarking’s dynamic pricing solution helped prevent our locations’ revenue from falling as much as others during COVID. And we didn’t have to spend time or resources trying to figure out what the new pricing should be. It just updates it throughout the day according to demand, resulting in our NY location generating 26% more revenue than the U.S. avg.” - John Leaf, Sr. Branch Manager (NY), ABM
1. Leverage Online Sales Channels
Get the right tools and technology to fully recover and move forward, make use of contactless payment options and the opportunities to sell online.
2. Implement Dynamic Pricing To Drive Demand & Accelerate Revenue Recovery
Align your rates with the fluctuating demand of the market to maximize sales and revenue.
3. Asset Owners Expectations of Parking Operators Have Changed
Asset owners are looking for ways to do more with less in an effort to accelerate revenue growth, leveraging aggressive pricing strategies is table stakes at this point.
Learn more about Smarking’s Dynamic Parking Rates.
Schedule a free consultation and see how you can get started risk-free.
Wen Sang Todd Tucker Peter Owusu-Opoku
Chief Executive Officer SVP, Market Development Asset Manager
Smarking Arrive LaSalle