The parking industry is seeing a minor reduction in demand for parking and equipment, although most companies have done well through the past year. The public sector has been hurt more than the private, due to the great reduction in property values and the resulting loss in tax revenue.
According to members of the Temecula Parking Group (TPG), the economic downturn has had an impact, but parking in general is surviving. The TPG’s members are made up of parking operators, development owners, cities, universities, parking consultants and equipment manufacturers from across the country. They meet annually to discuss topics that impact the industry.
The group was riveted by a report from Walter D’Alessio, Vice Chairman of NorthMarq Capital, who discussed the current economic situation through the eyes of a company that finances and develops real estate. He was optimistic.
“The problem with the stimulus packages we have seen is that they have unintended consequences,” D’Alessio told the group. “It’s like those “balloon animals’: You squeeze in one place, and something pops out someplace else. Money is provided to the banks to loosen credit, but rules regarding the bank’s capital requirements are changed, which makes offering credit more difficult.
As for the economy in general, D’Alessio believes that it is strong and resilient. “These recessions are cyclic. We have seen it happen many times in the last 100 years. We have come out with a stronger and more vibrant economy than before. I can see nothing different this time.”
D’Alessio stressed that now, more than ever, building owners are looking for return on their investment dollar. If an operator or a consultant or a vendor approaches an owner, their presentation should include an estimate of percentage of return on the money invested.
“If an owner can see a solid 10% or 12% return on money spent for equipment or operations or improvements in a garage, they will look favorably on the project. They like to speak in percentages of return investment.”
The TPG agreed that certainly the industry doesn’t operate in a vacuum. Parking is indeed being impacted by the economy. However, that impact is different depending on the parking generator, the shopping center, ballpark, airport, office building, hospital, university or hotel that creates the need for parking.
When shopping is down, parking in centers follows. One operator reported that business was down 7% in shopping centers his company operated. However, another reported that they were full at a hub northern airport where people were filling the lots, both on- and off-airport for spring break.
Parking managers in cities and universities have seen the pressure turned up on them to generate revenue to replace that lost by decreasing property values. This has been reflected in citation management and increased parking fees.
Manufacturers have full order books, but they also have seen the decision times lengthen, and some projects, particularly in the public sector, be put on hold or canceled due to lack of funding. RFPs are down 5% from last year.
The economy, however, should not be viewed as an automatic and convenient excuse for the parking professional to blame for a downturn in business. Yes, there are problems with the economy – serious problems – but that economy presents opportunities.
Perhaps with some additional advertising, those spaces that were vacated by the family car could be occupied by others. Perhaps, by adjusting the rates, the volume of cars could increase or their revenue generation could be neutral even with fewer vehicles. Innovation and creativity are not slowed by a weakened economy, unless you want them to be.
With a slowdown in the construction industry, architects and engineers have a little more free time, so we should take advantage of this opportunity to collaborate more closely with those professionals on parking fundamentals.
Likewise, this is a good time to join other professional organizations so we can influence how they view parking. With fewer vehicles in a facility, and more competition for your capital dollar, now is a good time to perform those long-overdue repair projects.
Don’t overlook your most valuable asset – your staff. A poorly performing staff can adversely impact your operation more than a poorly performing economy. The economy will get better. Can you say the same about your staff?
This is an ideal time to train future parking supervisors.
The Parking Manager of today does not look at stacks of tickets. He or she programs stacks of servers.
The Parking Manager of today no longer calculates the value of tickets but return on investment (ROI).
The Parking Manager of today must maintain both ADA and PCI compliance. Training is something we can all do to promote our industry.
With trained professionals, we can demonstrate to owners, building mangers, asset managers, government leaders, hospital administrators, university officials and others that parking is an asset that adds to the bottom line. Moreover, every dollar spent on a well-trained Parking Manager is an investment with a high likelihood of a positive return.
Yes, there is a direct relationship between the economy and parking, so that when the economy suffers, the parking industry feels some of the pain. But instead of commiserating about the pain, take steps to reduce or eliminate it. Use current economic conditions as an opportunity to change the industry for the better. We won’t change the entire parking universe overnight, but perhaps we can change it one garage at a time.
The Temecula Parking Group was honored to have the International Parking Association as its guests at this year’s meeting. The IPA is made up of member countries in the parking business, mostly in the Pacific Rim. This year, members came from Australia, China, Taiwan and Canada. They made a presentation on automated parking as it is in China.
Sidebar:
Members of the Temecula Parking Group reported:
• Decline of 7% in parking demand at shopping malls.
• Reduction of 3% to 5% in monthly parking sales downtown.
• RFPs for parking equipment down 5% from last year.
• Longer delays (and inability) to finance parking projects.
• Enplanements at airports down 22%.
• Cancellation of some regional parking conferences.
• Reduction in budgets of many parking providers.
• Requests (or demands) from owners and asset managers to operate with less.
• Increased interest in transit.
• Governments (and administrations) siphoning parking funds for non-parking purposes.
• Capital costs associated with “green” projects.
• Fear as a factor in preventing many from spending.
