Dominic Welling takes a closer look at what some airports are doing to maximise their car parking revenues.
Airport car parks are arguably the busiest and most successful in the world, earning some US gateways in excess of $100 million each year.
It is, of course, revenue that can be used to develop the airport business – either by contributing funds toward vital infrastructure development projects or by helping to keep airline costs down.
According to Michael Civitelli, a parking consultant at Walker Parking Consultants, for large hubs, car parking can produce between $80 million to $100 million of annual revenue and, for an airport of any size, it will be in the top three non-airline generators of revenue.
The fact is certainly borne out by the 2010 ACI Airport Economics survey which reveals that car parking now accounts for around 7% of global airport revenues and is the second biggest source of non-aviation related revenue (equal with real estate) after retail.
The driving culture of the US, and the fact that relatively few of the nation’s airports boast rail links, ensure that car parking revenue is big business for most gateways.
And most publish their figures, which makes for interesting reading. Denver International Airport (DIA), for example, made $118 million in revenue from car parking in 2010 and Dallas/Fort Worth International Airport (DFW) saw its car parking revenues hit more than $97 million.
Elsewhere, Phoenix Sky Harbor International Airport (PHX) generated $73 million from its car parking system last year and Hartsfield-Jackson Atlanta International Airport pocketed $95.7 million from parking.
Even smaller airports such as John Wayne Airport in California earned nearly $36 million from parking. The total accounted for a third of the $109 million the gateway made from non-airline related activity in 2010.
Parking rates, of course, vary depending on the location of the car park used and the service provided, with customers traditionally paying less for remote car parks and top dollar for more convenient facilities adjacent to the terminal.
Covered parking in a garage is also usually more expensive than ‘open air’ facilities and the charges for VIP or valet parking, with the increased security and additional services that it brings, is typically priced at the higher end.
For example, someone parking at PHX can currently expect to pay between its lowest daily rate of $7 to its premium $25-a-day service. Additionally, there is the option to pay by the hour in some of its facilities which would set customers back $4 per hour.
At DIA, people wishing to park their vehicle will see daily rates vary from $7 to $30, depending on where they park, with hourly rates ranging from just $1 to $11.
Likewise, the daily cost of parking at DFW ranges from $8 to $22 depending on the location and service for which you are willing to pay.
Manipulating the rates is an easy way to help increase the revenue offered by car parks, whether it is simply by raising them or offering coupons or special packages to customers.
John Ackerman, chief commercial officer at Denver International Airport (DIA), says: “We have a vast parking operation at the airport, and in 2010 we earned around $118m in non-airline revenue generation just from our car parks.
“A lot of it is down to the airport’s sheer size – we are the 10th busiest airport in the world with 52mppa passing through our gates – as well as the fact that the next closest parking facility is 10km away from the terminal.
“Our parking lots have been very full this year. In fact, we have been forced to turn away customers.
“As a result, in June we raised the rates between 5%–15% depending on the product, and although transactions may have declined slightly, revenue has gone up significantly since then.”
There is no doubt that airports are in the money now when it comes to airport car parking, but TransCore’s director of airport systems and services, Forrest Swonsen, believes that for the success to continue in the long-term, airports will have to improve the offering and up their game on customer service.
Swanson says: “If airports want to keep customers coming back to their car parks, they need to make the car parking experience as pleasurable and as stress-free as possible.
“Airports have to look at their physical layout and consider how to maximise revenue, or squeeze every dime out of what is already there. This can come through rate changes, and product offerings, but they should also be more customer focused.
“They should try to be more forward thinking, for example, and consider parking as a product and an experience, like the terminal concessions.”
Swonsen, therefore, encourages airports to leverage different marketing opportunities such as wayfinding, advance reservation programmes and even introducing loyalty-style programmes for business passengers and frequent flyers.
And his call for improved customer service at airport car parks is backed by Phoenix Sky Harbor’s parking superintendent, Lynda Dodd, who insists that a fast and efficient service is a top priority for the Arizona gateway.
She said: “Our ultimate goal is to get our customers from the parking facility to their terminal as quickly and efficiently as possible.
“We concentrate on cost-saving measures to keep our parking fees affordable to our public and, while revenue is critical to our operations, we put customer service first wherever possible.
“So just because it may generate revenue, if it’s not good for the customer, we are not inclined to do it here.”
The importance of car parking revenue has certainly led a number of gateways across the globe to come up with different, unique and innovative ways to upgrade and modernise their car parking infrastructure and services.
One direction in which airports are increasingly heading, to attract more custom and streamline processes, is online booking systems.
Prague Ruzyne Airport, for example, has followed the trail blazed by many of Europe’s larger gateways with the recent introduction of online booking for parking at the airport.
The new technology deployed at the Czech Airport allows visitors to buy parking via the airport’s website, and receive a bar-coded confirmation. This barcode is then recognised at the barrier when entering or leaving the car park.
With the system, however, customers are also able to benefit from a range of discounts on parking services offered by the airport, including at least a 5% discount on some standard parking prices.
As a next step, members of OK Plus, the Czech Airlines’ frequent flyer programme, will be able to collect reward miles for parking reservations, and miles saved will also be spent on parking at the airport.
Likewise, in the UK, Inventive IT Ltd has launched ‘Altitude’, an airport parking pre-booking and pricing system at Liverpool, Robin Hood Doncaster and Durham Tees Valley Airports.
Peel Airports Group, which owns the airports, asked Inventive IT to help them develop a new pre-book and pricing system when its original solution was proving problematic for customers and, as a result, the respective airports where loosing online business to competitors.
The airport group wanted to offer a simple booking system for its customers, which would in turn allow it to be more creative with pricing and promotions.
Sammy Patel, head of car parks business of Peel Airports, said: “With our system we are able to easily and clearly differentiate our products online, and within the first week of introduction we have seen a significant increase in the average transaction value by upselling and cross-selling parking products.
“Importantly, we are now able to yield pricing appropriate to demand.”
Elsewhere, in South Korea, Incheon International Airport has introduced a range of new technology to both speed up the parking process, ease payment difficulties and ensure that passengers can find their cars on their return to the giant 5,000-vehicle capacity car park below its Transportation Centre.
Technologies include parking space management and guidance lamp systems (red = occupied, green = empty) to direct drivers to empty spaces in the three-level garage below the Transportation Centre.
While a car-finder application on digital screens located in the car park not only reminds drivers where they parked their vehicles, if they have forgotten, it provides them with directions to the nearest payment kiosks and exits lanes.
Such is the demand for airport parking, that Walker Parking Consultants’ Michael Civitelli claims some gateways could easily lower their prices without missing out on any revenue.
And he says that one of the ways airports could achieve this ‘win-win’ scenario is by looking into developing special discounts, such as multi-day packages or Internet coupon offers.
Citivelli says: “It is less about infrastructure and more about deals and pricing or products and, notably, valet services.
“There are a number of different products that airports could exploit, such as weekly discounts, point schemes, valet services, or frequent flyer deals for example.”
John Ackerman from DIA adds that although the Colorado gateway currently has no firm new products to unveil, the airport was considering a “reserved or premium parking” service.
He notes: “It will probably be like some sort of member club where frequent flyers can reserve themselves a guaranteed close-end parking space, which could be their own private space every time they travel. We could also tie in with airlines, to latch onto their frequent flyer clubs.”
Elsewhere, at PHX, the gateway already offers various discount schemes, which can end up earning hundreds of thousands in revenue.
Dodd says: “We offer coupon campaigns during peak holiday travel, allowing customers to receive 40% off the usual terminal parking rate – from $25/day to $15/day.
“The net effect is increased revenue stream to the airport and it influences customers to use facilities that are lower in demand, thereby balancing facility loads. In 2010, we generated about $700,000 in new revenue through this programme.”
Meanwhile, alternative methods to generate more money out of car parks must include ‘upselling’ on current services by adding some special extras, muses Swonsen.
“Airports are capitalising on valet services at the moment, both for long and short-term passengers, where they can be used as a meet-and-greet or pick-up service,” comments Swonsen. “They should upsell on this product by offering additional services such as an oil change, or car wash, or general car inspection.”
Once again, these services are actually offered already at PHX where, according to Dodd, they offer customers free assistance with air for flat tires, battery jump starts, locked keys or even if they simply forget where they have parked.
Lastly, and something which has not yet caught on in the US, is the concept of credit card, or pay-on-foot systems.
According to Swonsen, the idea of completely unattended parking, with customers using a credit card on entry and exit, is a comparatively new thing in the US.
Some airports, however, have invested in the technology, which has both cost-cutting advantages for the airport and efficiency benefits for the customers.
John Wayne Airport (JWA) began rolling out the first phase of its Parking Access and Revenue Control System (PARCS) back in July.
With PARCS new ticketless option, a customer can swipe a credit card to gain access to the car park, and the same credit card can be used upon leaving, when payment would be automatic.
Additional features of PARCS will include a pay-on-foot station and a parking space count system that will allow passengers to see how many spaces are available at each level.
Denver’s Ackerman admits that this is the kind of new technology that would be of interest to his airport.
He enthuses: “In terms of technology, we are looking at an unmanned credit card payment system, which means customers no longer need to go through cashiers.
This is not only secure and convenient but it also offers significant cost savings and profitability.”
For those of who thought car parks were boring, thing again!