The invention discloses a parking guidance system and a method thereof based on release and forecast of a parking index, and belongs to the technical field of parking management and vehicle detection of the internet of things. The parking guidance system comprises an information acquisition subsystem, a data transmission subsystem, a central control subsystem and an information release subsystem,wherein the central control subsystem comprises an information release server, an index operation unit, a database server and a management terminal; in addition, the information release subsystem comprises terminals such as an internet, a vehicle-mounted GPS (Global Positioning System), a traffic transceiver, a three-color guiding panel, a mobile phone. The method of the parking guidance system acquires the flow information of an outlet and an inlet of a parking lot, uploads the data, and computes the parking index. Finally, the computed result of the parking index is transmitted to the terminals of the information release subsystem. The parking guidance system and the method thereof can release the parking index and forecast the travel information visually and roundly, and can effectively integrate the conventional parking guiding information and other dynamic information such as real time traffic status.