JVH Gets a Response on Off Airport Parking

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JVH Gets a Response on Off Airport Parking

In the post below I comment on DFW airport and the charges that the airport is levying on local off airport operators. Correspondent Greg provided the following:

Well John, this is a tough issue. The Airport has millions of dollars in debt service to cover for their parking structures. The off-airport parking lots only exist because the airport is there. The added traffic on airport commercial roads from the constant flow of off-airport parking shuttle vans takes a toll on traffic and roads. The off-airport lots have costs to deal with, but not nearly the size of the costs that airports have to bear. The parking space is a supply and demand item, particularly at an airport. Parking revenues are typically the single largest source of revenue at any airport of size. That is important to protect. The off-airport business is no different than any other business in that their costs to operate dictate the rate they need to charge the end user in order to remain solvent. Bottom line is that the off-airport parking lots provide a needed asset (parking) that saves the airport from dedicating more land and debt to build more parking. But, the costs of having users of airport roads and infrastructure need to be covered and having these costs covered by the user is the only fair way of spreading the costs.

From my perspective is that by keeping the cars that park in their lots off the airport, these companies are removing stress on the infrastructure, not adding to it. If each shuttle trip has three people on it, on average, that means that two trips are removed from adding wear and tear on the roadway. I understand that these folks aren’t paying for parking to the airport, but they also aren’t using those facilities.

Disneyland is a huge draw in Orlando. There are probably 500 hotels and resorts in the area that would not be there if Mickey and Co hadn’t decided to locate their home in an orange grove nearby. Does this mean that Disneyland expects these hotels, restaurants, resorts, and the like to pay because they wouldn’t exist if Tomorrowland was somewhere else? I think not. To the contrary, all these facilities add to the “draw.”

Likewise, having hotels, restaurants, filling stations, and yes, parking around an airport adds to the convenience factor of the airport. An airport like say Denver that is a million miles from anywhere is difficult for the business traveller particularly. If a location is needed for meetings or trade shows or even entertainment of customers, it is non existent.

However O’Hare which is surrounded by hotels and destination attractions becomes popular not just for the fact that it facilitates my ability to get on and off an airplane, but also has facilities that lend to my ease and comfort. LAX, for instance, has a dozen major hotels within a mile as well as world class restaurants, and yes, parking. I now have a choice and can easily pick my parking, and other amenities I need. (I’m not that familiar with MLPS, Greg’s home airport, as I have only “flown through”.) Seattle is another that has a ton of hotels and the like, as is SFO, San Diego, Washington Reagan, etc.

I would think that this competition added by off airport facilities keeps the airport landside operation on their toes and helps drive pricing down, or at least keeps it competitive. When the airport, read that government, begins to diddle with the free market, what can go wrong?

I understand that airports seem driven to build huge, expensive garages but sometimes a surface lot might be the most business savvy alternative. In some airports, parking revenue is higher than the landing fees – In virtually all airports, it comes in second. DFW is paying off debt for other construction, using parking revenue. Hey, that’s OK, but at least let’s acknowledge what we are doing. Fees and rents can’t pay the way, parking has to take up the slack.

JVH

John Van Horn

John Van Horn

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