Revenue management of airport car parks in continuous time

Abstract

We study the revenue management (RM) problem encountered in airport carparks, with the primary objective to maximize revenues under a continuous-time framework. The implementation of pre-booking systems for airport carparks has spread rapidly around the world and pre-booking is now available in most major airports. Currently, most RM practices in carparks are simple adjustments of those developed for hotels, exploiting the similarities between the two industries. However, airport carparks have a distinct setting where the price-per-day of a parking space is heavily discounted by the length-of-stay of the booking. This is because the customer decision tends to be made after the length of the trip is already set, and it becomes a choice between parking or alternative modes of transport. Consequently, the length-of-stay becomes a critical variable for revenue optimization. Since customers are able to book the parking by the minute, the resulting state space is very large, making a conventional network solution intractable. Instead, decomposed single-resource problems need to be considered. Here we develop a bid-price control strategy to manage the bookings and propose novel approaches to define such bidprices depending on the length of stay, which could be utilized in real-time RM algorithms. Managing stochastic carpark bookings by length-of-stay in the decomposed single-resource approximation allowed us to achieve within 5% of the expected revenues for a multi-resource approximation, with a fraction of the computational effort. When expected demand exceeds the available parking capacity, the method increases the revenues by up to 45% relative to the first-come-first-serve acceptance policy.

Vertical Equity Analysis of Parking Reservation Based on the Auction Strategy

“…Te efectiveness and equity of the parking reservation process are determined by the parking reservation strategy. Te frst-come-frst-served strategy served as the foundation of early research studies on reserved parking strategies [32,33]. "First-come-frst-served" is a strategy that allocates parking spaces according to the order of drivers' reservation, with the frst reserved frst served.…”

Estimating the Lag Time Between Flight Arrivals and Parking Exit Volumes at a Major Airport: A Practical Approach

“…Due to its importance, airport parking has attracted much attention in recent years. Numerous related studies are carried out on fields such as revenue management [4], [5], [6], operations management [7], performance evaluation [8], parking behavior [9], [10], [11], and demand forecast [12], [13], [14], to comprehensively explore and address various aspects of airport parking-related challenges and opportunities.…”