Retail and parking are big business for airports, making up 70% of all non-aeronautical revenue worldwide, according to the most recent Airport Economics Report from Airports Council International (ACI). Parking is particularly important in car-obsessed North America, where it comprises more than 40% of airports’ non-aeronautical revenue by itself.
But times change, and some recent developments are posing new challenges to airports’ retail and parking revenue. Today’s travelers are less affluent, with many demands on their wallets and time. E-commerce gives them more retail options than ever, and widespread duplication of retail outlets across (and even within) airports makes in-terminal shopping less compelling. And of course, travelers have less time to shop and dine because they’re spending more time in security.
Airport parking faces similar challenges: off-site parking, public transportation and—increasingly—ridesharing compete for travelers’ dollars. According to OAG’s North American Market Report, ridesharing is now the preferred third-party method of transportation to and from the airport—and roughly two-thirds of all travelers (and 70% of business travelers) wish it were available at more airports. The Economist also points out that environmental regulations are pushing airports to encourage public transportation and off-site parking as a way to reduce on-site air pollution.
With these new and intensifying pressures on their retail and parking revenues, airports must look for fresh solutions and competitive strategies. Here are four ways mobile technology can help airports maintain non-aeronautical revenue, even as outside forces threaten it.
1. Leverage Location to Drive Retail Sales in the Terminal
Partnering with retailers and concessionaires, airports can leverage mobile apps and location technology (GPS, beacons, etc.) to send targeted promotional messages to airport app users, right when they’re most likely to act on them. Let’s say Passenger Q is a frequent traveler and airport app user who has visited Airport News n’ Brews three times in the last two months. The next time she heads to the airport, she receives a personalized push notification as soon as her car enters the parking garage. The airport welcomes her back and offers her 10% off a magazine purchase with her coffee at Airport News n’ Brews.
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Or consider Passenger Z. He just downloaded the airport app for the first time and heads off to catch a midday flight. As soon as he exits security, he receives a push notification reminding him to pick up lunch from Bistro to Go and get a free cookie. Where do you think he stops next?
These kinds of timely, relevant messages can be powerful enticements for passengers who appreciate helpful suggestions to make their travel smoother and more comfortable (especially when they can also save money). According to SITA’s Air Transport IT Trends Insights 2017, however, only 18% of airports have implemented location-based food and beverage promotions, and just 19% have implemented location-based duty-free ads and offers via mobile. There’s a clear opportunity here for airports that are forward-thinking enough to take it.
2. Improve Traffic Flow and Increase Shopping Time with Location Tech and Airport App User Data
An airport mobile app can act as a passenger’s personalized digital guide to and through the airport terminals, directly to their gate. And while they use mobile turn-by-turn navigation to speed their route through the concourse, the airport collects valuable (and previously unavailable) data about where bottlenecks occur and how passengers move through the terminal. This data can be leveraged to streamline operations, eliminate bottlenecks, optimize locations of mobile retail carts and much more.
3. Make Your Airport App Your Parking Hub
Smart parking guidance systems like Park Assist® can help airports streamline garage traffic flow while driving revenue through sophisticated pricing strategies. An airport mobile app can (and should) integrate with these systems, enabling app users to find the closest open parking space with a tap and find their way back to their car just as easily. (Check out our Fort Lauderdale-Hollywood International Airport Customer Snapshot to see how it works.)
4. Create Additional Revenue with In-App Advertising
In-terminal advertising is used to generate valuable non-aeronautical revenue, and in-app ads can do the same. The right app development partner can help you select ad units that won’t disrupt the app user experience and should be able to connect you with advertisers and campaigns that are relevant to your brand and the passengers who typically frequent your airport. According to App Annie, worldwide in-app ad spending shot up 37% from 2016 to 2017. That’s revenue that could be contributing to your bottom line.
Clearly, mobile and location-based technologies give airports many new options to address challenges to their main non-aeronautical revenue sources, retail and parking. The four use cases above are only the beginning. As mobile and location technologies continue to permeate the consumer and business landscape, the opportunities for airport mobile apps will continue to expand. Getting in on the ground floor now with a scalable mobile solution will position your facility to capitalize on those opportunities as they arise.
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