Parking an excellent source of revenue
“We do not consider parking to be a revenue source.” I read that quote in a blog post from a Director at a University in the Midwest and wondered if I’d read it correctly?
It got me thinking, I wonder how many other educational organizations have the same outlook about parking revenue? Are more parking operations are feeling the pressure to improve their bottom line and looking for ways to generate revenue?
Focus on the bottom line
An estimated 30% of traffic congestion is created by drivers looking for parking. That means there is a demand for parking – often greater than it’s supply. That also means, parking can be a stable revenue stream, as viable as any other service you provide.
Every industry has different challenges and revenue potential. We often speak to municipalities, airports, educational institutions, hotels, hospitals, and housing developers who all struggle with how parking financially fits into their business model. Despite their different needs and challenges, most operations find technology to be a valued tool for bottom-line driven initiatives. If you choose the right technology, it’ll give you the flexibility to not only identify or improve revenues, but to reduce expenses.
At a very basic level, technology can reduce the costs associated with labour for enforcement agents and lot attendants, have a positive impact on the efficiency of your operation with better processes, and create a better experience for employees and customers. As an example, cloud-based systems that give your customers self-serve, online options to purchase permits or pay for violations is a big step forward in streamlining office resources and minimizing manual tasks. As another example, equipping patrols with real-time data means they can be more efficient on patrol and better identity and manage violations.
Revenue generation is most often about maximizing the utilization of your parking spaces. And that can be done in many ways – most of which are made much easier with the aide of parking management technology. The availability of parking data that is part-and-parcel with parking technology offers real insight into areas where your operation can improve. You can check out our blog Parking data helps generate revenue and improve experience to see some examples of operations that are using parking data to improve their operations. Technology also helps identify and manage revenue-potential scenarios for decisions like permit overselling or general lot planning.
A simple parking revenue scenario
Jumping into the adoption of parking management technology doesn’t have to be overwhelming, and you don’t need to make full scale changes at once. Small change can have big impacts on the bottom line and can create opportunities to phase in other technology and changes to make further improvements in the future.
Here’s a look at a common scenario that’s within the reach of most parking operations: creating premium and standard space designations
Your operation has 500 spots split across 2 physical lots. Both price points are very inexpensive at $4-5 dollars a week.
Lot A – 250 spaces @ $240.00 per year ($20.00/month)
Lot B – 250 spaces @ $180.00 per year ($15.00/month)
Annual revenue generated across both lots is $105,000
Revenue generating scenario
Premium designation is given to the spots closest to the building entrances, representing 20% of the spaces in each lot.
Lot A – 200 standard spaces @$240.00 per year ($20.00 / month)
Lot A – 50 premium spaces @$360.00 per year ($30.00 / month)
Lot B – 200 standard spaces @$180.00 per year ($20.00 / month)
Lot B – 50 premium spaces @$270.00 per year ($30.00 / month)
Annual revenue generated across both lots is $115,500
That’s a 10% increase in revenue with no extra overhead costs.
Finding revenue streams in your parking operation doesn’t necessarily require you adopt new technology. The technology does make it easier to manage however. In the scenario above for example, creating virtual lots that includes different user types and permit types is a relatively simple process. Adding LPR capabilities takes it to the next level to streamline how you patrol lots and identify violations.