We don’t often consider the ‘law’ of supply and demand when it comes to parking, but it fits in our business just as much as the selling of commodities, or widgets, or frankly anything else.
Consider: If the supply of parking spaces goes up, and the demand remains steady, the price of a space tends to go down. On the other hand, if the demand for parking spaces increases, and the supply remains the same, the price tends to go up (Can you say Manhattan?)
I had a conversation the other day with a parking pro in Vancouver, BC. I had parked in a rather large structure near his office and noted that it was controlled by ‘pay by license plate’ equipment. I also noted that at noon on a business day, the garage was virtually empty.
“Yep” he said. “When the demand when south and the supply stayed the same, we had to do something. It meant reducing staff by automating and keeping our operational costs at a minimum.”
Seems that about four years ago the city opened a rapid transit system linking downtown to the Vancouver airport. In addition to helping travelers get from the airport to downtown more easily, it also reduced about 50,000 daily trips into the downtown area, and the resulting need for parking. Demand down, supply the same.
The parking industry in this city is flat, but not emotionally depressed. There are many office buildings under construction downtown and few if any have parking included in the design. In a few years, I’m told, as these new buildings fill, demand will rise, and with supply remaining the same, parking will be “back”in Hollywood North, as Vancouver, known in entertainment circles.
This cycle is being played out in other cities across North America as “progressive’ city councils look for ways to keep cars out of the central business districts and legislate autos and hence parking out of existence. More than three decades ago, Seattle approved Columbia Center, a 72 story skyscraper downtown. Virtually no parking was added to the facility. San Francisco completed Westfield Shopping Center in the trendy SOMA area with no parking. Is the trend pervasive? Yeah, kinda, sorta. Look around your city.
We are being told that the ‘young’ people today think less about cars than about their smart phones. In ‘my day’ the first thing you did when you turned 16 was get a driver’s license. Now I try to bribe my granddaughter with a car, and she isn’t interested. Yikes.
Some tell us that the urbanization of youth is a passing trend and as soon as they marry and have families they will return to the ‘burbs’ and the lure of that quarter acre and white picket fence. I know that oldsters are moving downtown, living in lofts and walking to clubs, restaurants, shopping, and work. And apparently they love it.
Wanna go skiing, or a quick trip to Vegas, rent a car. Why have the expense of owning one and the hassle of PARKING?
What’s all this mean to our industry? Operators I spoke to were cautiously optimistic. They felt that it meant that not just demand would affect bottom lines, but also the ‘way’ parking was run would be a major factor.
We have seen that automation and technology are making the way we park a different experience. Parking apps that connect what we are doing downtown with parking also are becoming more important as demand lessens.
My sources tell me that patience is needed. As central business districts become more crowded, as buildings are renovated, built, and filled with offices and living space, parking supply will remain the same and demand will increase.
If that occurs, smiles will again appear on operator’s faces. In the meantime, to survive, the will have to rethink their business model and affect how they handle and operate parking space supply. They ignore change at their peril.