Parking is a revenue source! Stop missing out on this opportunity
Parking an excellent source of revenue
“We do not consider parking to be a revenue source.”
I read that quote in a blog post from a Director at a University in the Midwest and wondered if I’d read it correctly?
It got me thinking; how many other educational organizations have the same outlook about parking revenue? In addition, are more parking operations feeling the pressure to improve their bottom line and looking for ways to generate revenue?
Focus on the bottom line
30% of traffic congestion is drivers looking for parking. That means there is a demand for parking – often higher than it’s supply. That also means parking can be a stable revenue stream, as viable as any other service you provide.
Every industry has different challenges and revenue potential. Consequently, we often speak to municipalities, airports, educational institutions, hotels, hospitals, and housing developers who all struggle with how parking financially fits into their business model. Despite their different needs and challenges, most operations find technology to be a valued tool for bottom-line driven initiatives. If you choose the right technology, it’ll give you the flexibility to not only identify or improve revenues but to reduce expenses.
Technology and Revenue
At a fundamental level, technology can reduce the costs associated with labor for enforcement agents and lot attendants. Furthermore, it can have a positive impact on the efficiency of your operation by better processes and improving experiences. As a result, a cloud-based system gives your customers self-serve, online options to purchase permits or pay for violations is a significant step forward in streamlining office resources and minimizing manual tasks. As another example, equipping patrols with real-time data means they can be more efficient on patrol and better identify and manage violations.
Revenue generation is most often about maximizing the utilization of your parking spaces. And that can be done in many ways – most of which are made easier with the aide of parking management software technology. The availability of parking data that is part-and-parcel with parking technology offers real insight into areas where your operation can improve. You can check out our blog Parking data helps generate revenue and improve experience to see some examples of operations that are using parking data to improve their services. As a result, technology can also help identify and manage parking revenue potential scenarios for decisions like permit overselling or general lot planning.
A simple parking revenue scenario
Jumping into the adoption of parking management technology doesn’t have to be overwhelming. You don’t need to make full-scale changes at once. A small change can have a substantial impact on the bottom line and can create opportunities to phase in other technology and changes to make further improvements in the future.
Here’s a look at a typical scenario that’s within reach of most parking operations: creating premium and standard space designations.
Your operation has 500 spots split across two physical lots. Both price points are very inexpensive at $4-5 dollars a week.
Lot A – 250 spaces @ $240.00 per year ($20.00/month)
Lot B – 250 spaces @ $180.00 per year ($15.00/month)
Annual parking revenue generated across both lots is $105,000
Revenue generating scenario
A premium designation is given to the spots closest to the building entrances. This represents 20% of the spaces in each lot.
A Lot – 200 standard spaces @$240.00 per year ($20.00 / month)
A Lot – 50 premium spaces @$360.00 per year ($30.00 / month)
B Lot– 200 standard spaces @$180.00 per year ($20.00 / month)
B Lot – 50 premium spaces @$270.00 per year ($30.00 / month)
Annual revenue generated across both lots is $115,500
That’s a 10% increase in revenue with no extra overhead costs.
However, finding parking revenue streams in your parking operation doesn’t necessarily require you to adopt new technology. The technology does make it easier to manage, however. In the above scenario, creating virtual lots that include different user types and permit types is a relatively simple process. Adding LPR capabilities takes it to the next level to streamline how you patrol lots and identify violations.