There are few things more stressful these days than a trip to the airport, involving as it does a labyrinth of lines and bag checks and TSA screenings that can make it hard to gauge the amount of time needed to get to the gate. Added to this list is the issue of airport parking.
“On travel days, there are many variables and very little room for error,” said Mark Lawrence, CEO and co-founder of the SpotHero parking reservations app.
Typically, the choice for those who wish to park their car at the airport has been between the convenience and proximity — but higher cost — of on-airport parking or the discounted rates and added amenities of the off-airport lots. In the sense that they both provide parking for those headed to the airport these two entities might be seen as competitors but each provides a distinct experience and both are looking for ways to increase the ease with which their customers can park their car and make it to the gate on time.
Friendly Rivalry
“We don’t really have a formal partnership with off-airport lots other than to provide quality parking options to our customers,” said Adam Gubser, airport parking manager for San Francisco International Airport. “In the end, it’s all about location and quality of service.”
The office of parking operations at McCarran International Airport in Las Vegas reported that they were “indifferent” to off-airport parking as “they do not really impact our demand.”
“In some respects, they’re absolutely competitive,” said Todd Tucker, senior-vice president of market development for the ParkWhiz parking reservations app. “On-airport would love everyone to park on site for the revenue it draws. They promote the safety of the garages and the proximity to the gate but also charge a premium, which makes them the most expensive option.”
Tucker points out that parking is one of the biggest revenue streams for airports and therefore something they’re looking to protect but that from a consumer point of view the operations are quite complementary. “One customer might be all about convenience so will park on site because it’s closest,” said Tucker. “Other people are cost conscious so will choose the off-site options.”
There are also those times when airports are at capacity and the off-airport lots can take the overflow. “We do not have enough capacity to accommodate current demand,” said Elias Constantinides, airport parking manager for Los Angeles World Airports, who reports that demand has only grown in recent years.
“We have a good working relationship because a lot of airports sell out and we become an option for overflow situations,” said Charles Bassett, president of operations for the L&R Group of Companies, which runs Wally Park.
Price and Convenience
“We view off-airport-style operations as one of many parking products that meet the specific needs of the customer,” said Jack Ricchiuto, executive vice-president of SP Plus, which manages a number of on-airport parking operations through its Airport Services Division. “These operations tend to be less expensive than premium close-in garage or on-airport curbside valet.”
Ricchiuto noted that price and convenience are major components in determining the behavior of consumers. “Off-airport operators strive to create brand loyalty by offering corporate parker discounts, frequent parker programs and amenities like car washes, oil change services, dry cleaning and more.”
There are also those times when airports are at capacity and the off-airport lots can take the overflow.
Anne Kozel, vice-president of marketing for Park ’n Fly, said that extras can also include valet services, covered parking, car detailing and even pet boarding. She noted that 25-30 percent of the customers add at least one of those extras.
“Quite a few people going on trips want the whole shebang,” said Kozel. “Boarding their pet, having the car detailed and the oil changed.” WallyPark’s Bassett said that about 25-30 percent of their customers also look for some value added.
On-airport operations are starting to look at adding some of these extras — usually when building a new garage or upgrading their equipment. San Francisco International Airport is in the process of opening a new garage. It’s scheduled to open in January 2019 (but currently ahead of schedule) and “in addition to some of our current parking products like valet parking, car washing and laundry services, we are looking to roll out more of a rounded-out business plan that includes reservations, a parking guidance system and other types of amenities,” said Gubser.
Ricchiuto said his company has been helping their airport clients to compete on a more level playing field with off-airport operators through the development of custom and branded websites, search engine optimization and the effective use of marketing channels and social media promotions. “Competing in this market segment is important if airports are to prevent the erosion of parking revenues,” said Ricchiuto.
New Technology
Part of competing in the market is embracing the new technologies. “Airports are beginning to look at how technology can help in operations and not just in ticketing and revenue control but in marketing and pricing,” said Bill Plamondon, CEO of Parking Reservation Software, which provides reservations and marketing software and support. “In the last 12 months, it’s become pretty common that when an airport is looking for new equipment they will also look to add new software.”
They’re also starting to embrace digital parking platforms, something off-airport operations have been doing for awhile.
“In the last 12-18 months, airports have become more open minded to what I call omni-channel selling,” said ParkWhiz’s Tucker, who pointed out that the industry is catching on to the fact that people want to use their phones for everything.
Using these types of apps, “affords customers more control over their travel plans,” said SpotHero’s Lawrence.
Creating that seamless environment is something both on-airport and off-airport operations are working to implement. Ricchiuto thinks the U.S. market will also soon embrace concepts such as large-scale dynamic pricing and revenue yield management, which have already been implemented in Europe. “Today’s passenger is very interested in speed, mobility, efficiency and increased automation,” said Ricchiuto.
In the not-to-distant future, that increased automation might even include smart cars using a fast-pass type system where the parking can be booked through the car and the license plate triggers the opening of a gate to a reserved space, according to Tucker.
Park ’n Fly recently launched an upgraded version of their app that is tied to their gate system to allow customers to come and go as quickly as possible.
“Traveling is very stressful so the last thing you want to worry about is the parking experience,” said Kozel. “We are the first place people arrive before they take their flight and the last place before going home. We try to make the parking easy and enjoyable so it’s the one part of the trip people can say was a nice experience.”
Anne Shepphird is a researcher and writer. She can be reached at anneshepphird@gmail.com.
The New Disrupters: TNCs
One of the biggest new challenges to airport parking has been the proliferation of TNCs (Transportation Network Companies aka Uber and Lyft). Although the impact varies from market to market, it is something airports are continuing to examine and react to as necessary.
“To help offset the cost of managing TNCs, many airports are now charging access fees,” said Jack Ricchiuto of SP Plus. “And some have begun relocating TNCs to areas away from the terminal curb front and into less heavily trafficked areas.”
This is something that SFO has been dealing with for awhile. “San Francisco was the first airport in California and one of the first in the country to develop permit agreements with TNCs,” said SFO’s Adam Gubser. “We created a geofence-type tracking system that allows the airport to track when a TNC vehicle enters, exits, picks up or drops off on airport property.”
Gubser said they also recently relocated portions of the Uber and Lyft services to the fifth floor of the garage to alleviate the crush at the curb.
Research done by SpotHero at LAX showed that parking is still the most cost-effective solution for travelers in 80 percent of the circumstances but that convenience remains the primary factor driving customers.
