Do I really have to reserve airport parking online?

11 Jan 2011

Hmm... Do you HAVE to? No. Does it make sense? Let's see.

Economics theory calls it price differentiation. Here's what it means. Imagine a company that makes some product or provides service (airport parking is a service in our example). How much should this company charge to maximize its profit? The answer is both simple and complex: as much as customers would be willing to pay. The trick is that different people would be willing to pay different price for the SAME product (or service). You can see examples of price differentiation everywhere. Take apparel for example. Can you find the same blouse in New York City on 5th ave, at Macy's and in a discount store, Marshal's for example? The blouse is the same, do you think the price will be the same? Of course not. It's price differentiation.

Let's go back to the airport. Which traveller would be willing to pay the highest rate for airport parking? The one that drives in 1.5 hours before his flight. How much would he pay? He would pay pretty much any sane rate that parking attendant would ask. That's because he would have neither choices nor time to explore and compare them. Consider another extreme: who would be willing to pay the least? I bet it would be a person comfortably sitting in front of his computer and having parking lots listed in front of him sorted by rate per day. If you have a choice of not making a reservation, parking lots encourage you to reserve by offering their best rates. That is why our rates are low.

Finally a couple of words about commitment. Who likes commitment? Not everyone. That's why we do not ask you to be committed. If you have more than 24 hours before your flight and a friend agrees give you a lift to the airport, you just cancel the reservation and get your money back. All of it. Even if you cancel on the day of your travel, reservation site will only charge you the rate of one parking day, which is usually $4 - $10.

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