Parking Magazine | C-Suite | June Issue 2022
“Even with a limited pool of parking assets available, it’s possible to diversify to withstand shifting economic climates.”
Technology, marketing channels, and parking habits changed quite a bit in recent years.
But the business hasn’t truly changed; it’s still about bringing in parkers to your spots.
Fundamentals Determine Asset Value
The value of any asset is still determined by its fundamentals: core operating revenue as determined by its location and proximity to demand drivers.
Enhancements such as micromobility and EV connections may add a bit to an asset’s value, but they’re not the main driver of it.
Inform Data with Experience
There are more ways than ever to gather data about a parking location, and data is important. However, data is most valuable when combined with on-the-ground investigation of the neighborhood and exact location, as well as local expertise.
Combine data and research with experience to best evaluate an asset or revenue strategy.
Unless you know what you’re looking at, data is just hieroglyphics — use experience to translate into actionable insights.
Cast a Wide Net
Parking volume is the top driver of revenue, and locally informed marketing that sends the right message is the No. 1 way to attract parkers to your facility.
Appeal to the widest range of parkers with marketing approaches tailored to each customer type, as well as a variety of parking and payment options.
For instance, some monthly parking arrangements may need to transition to more flexible passes, or daily rates may need to fluctuate more often in line with demand.
Consider technology solutions to attract customers who look for parking via apps, prefer to reserve their spots in advance, or want to pay by phone.
Other customers may prefer to find parking when they show up or to pay with cash or credit card; options should also accommodate them.
Consider your current market and invest in technology or other upgrades that will drive revenue with all of your customers.
If you work with an operating partner, look for one that offers hybrid solutions to accommodate a variety of customer preferences.
Resilience in Diverse Portfolios
One way to diversity is through a mix of parking asset types, including facilities used 24/7 and those used mainly during the day.
Consider a city-agnostic approached the offers geographic diversity, and work with a local parking operator to better understand expansion opportunities, inform success, and drive revenue margins.
Parking & Smart Cities
Parking can be a part of the solutions for Smart Cities, but it can’t be the only solution.
Micromobility, EV charging, and other Smart City investments need to make sense for the parking owner’s business model.
This may require government incentives, funding of other types, or a partnership with a power supplier.
Given the current investments in EV production, it’s clear there will be more EVs on the road in the coming years.
However, real government infrastructure investment will be required to upgrade the electric grid capabilities so the charging stations that keep EBs going can be installed.
Connect with Local Government
Parking companies that are plugged into local and state government activity will be better positioned to tap into funding and partnership opportunities.
In addition, companies that understand government’s long-term plans and goals can prepare to take advantage of opportunities and potentially work with government to minimize negative effects.
Local operator networks can be valuable to help keep up with local government goals and plans, as well as to communicate with officials to ensure parking’s voice is heard.
Prepare for Opportunities
Although there have been few parking-only asset sales in the past couple of years, companies should be prepared for more opportunities, especially into 2023.
Companies with strong core revenue models and the flexibility to accommodate a variety of parkers and payment options will be able to position themselves for growth.
The author of this article Michael J. Nichols, is the President of Next Parking, LLC which specializes in the acquisition and operation of parking assets and provides parking industry consulting. It was founded in 2001 as a division of Next Realty, LLC. The company’s leadership team has 75 years of combined parking industry experience. Next Parking integrates industry expertise and access to off-market opportunities to acquire parking properties nationwide.