Key Takeaways From the "Impact and Recovery Planning for Parking" Webinar
Key takeaways from our webinar, "The COVID-19 Impact and Recovery Planning for Parking: Data, Tech, and Opportunities". Featuring Dan Roarty, President and COO of Arrive Roamy Valera, CEO of PaybyPhone Rick West, CEO of Millennium Garages and West FSI Ben Martel, CEO of Inugo. Hosted by Wen Sang, CEO of Smarking. Access the full webinar session recording.
The current state of the parking industry
At Smarking, we've been publishing high-level insights daily, here's what we're seeing from across the market. The chat below shows about 900 offsite parking locations and the dynamics in terms of the monthly parker's transactions year-over-year 2020 compared to 2019, starting February 29th, up until April 21.
Before the National Emergency was declared there was a year-over-year increase but right after, on March 13th, the volume went down to about 75% meaning that we're retaining about 25% of the volume compared to the same time period last year 2019. The good news is that we did stabilize at that level. Most weekdays, It's clear that essential workers are still using parking structures and we absolutely need to keep them open and controlled.
Besides off-street locations, we also support municipalities and monitor on-street locations as well. As you can see below on the left, the on-street daily peak occupancy also dropped significantly. Right now, we're in-between 5-10% on daily basis which impacts the cities significantly.
Below on the right, is a view of off-street activity and revenue, which has dropped even more than monthly parkers.
It's it's clear that after a full week of declining in the last week of March, we reached about 5 to 10% of the regular volume. While it's too early to tell, the good news is that yesterday and the day before it seems like it's picking up a little bit. Some early indicators that we may come back to normal hopefully soon, and we will continue to monitor these data and share with industry.
Parking leaders estimate a slow curve of recovery
Overall, leaders estimate that the parking industry will recover about 60% of transient volume by the end of the year, compared to 2019. Event venues and airports have a longer road ahead. There will most likely be a stepping stone approach, where slowly business start to re-open, by sector and region, not all at once.
"I think we'll see sequential improvements in business sector by sector, region by region. Parking might benefit in the sense that people may start to prefer their own transportation, versus public transit or ride share options, but to balance that, there may be an increase in people working from home after this.” - Dan Roarty
In the short term, Rick West, COO of Millennium Garages, forecasts that May will be the same as April, which is at 25% of monthly revenue and they are at 12% of their 2019 volume for transient parkers.
"We're forecasting June at 30% of volume for monthly parking. We set a policy that if you've already paid for parking, we'll give you credits, which helps us smooth out our budgeting. Once we hit July, we estimate a 10% increase per month." - Rick West
At an international level, governments are first looking at businesses that have the highest economic impact, with the lowest transmission risk. Such as manufacturing businesses first and restaurants and similar business models last. So those at the tail-end that had the fastest decline, may see a slower incline, but it is growing.
Consumer behaviors will change, and parking professionals need to use this time to prepare
The real question is how will consumers react, what long-term behavioral changes can we anticipate? Even if the cities start to re-open, company work from home policies and peoples behavior may stay the same as a precautionary. For valet, even if we show customers that we're sanitizing their cars, there is going to be a behavior change. Trust has been broken.
"We need actively displayed programs that helps consumers re-build trust, like cleansing, prop the doors open, introduce contactless payment solutions. As clear and frictionless as possible." - Ben Martel
In parking, programs are typically sold by the month and by the use, but as people change their work patterns, there is going to need to be more parking programs, prorate options, digital credentials, etc. There's an increased need to be more flexible, provide more choices, and communicate more with your customer base. Technology is going to play a big role in that. Take that friction out.
"Communicate to the general public, don’t take it for granted that people know that you’re open. We put out a press release so that people knew that we're parking 1,000 essential workers a day. We've seen monthly parking go down, but it's increasing on the transient side." - Rick West
For commercial properties, think about how peoples behaviors will change in the workplace. Businesses may stagger start times at the office simply to stagger the use of the elevator. Recovery is dependent on how people accommodate to social distancing and their level of comfort.
Technology and data will play a key role in accelerating recovery
It’s clear that customers are going to ask for the contactless options and the industry will need to further reduce friction. The experience of the consumer is key, and we need to reassure safety to re-build trust.
"People are paying attention to the little details now, like does this store have Apple Pay so that I can avoid contact? In parking it’s not as easy, we have decades of investments and infrastructure. So how do we take legacy equipment and let it support digital payment and allow us to move faster. Digital payments will provide a big push." - Dan Roarty
Operating costs that companies have brought down, are going to stay down. The industry is going to move towards incremental improvements instead of large investments. Evaluate technology that allows for adaptability to 'future proof' your operations.
"Parking data is going to be the best barometer of the recovery of business activity in the city. Cities need the data to forecast tax revenue" - Rick West
Get to know your customers. The parking industry still has the issue of 'we have all these cars but we don’t know who they are'. There's going to be an explosion of doing everything through your phone, as a credential, to pay, to make reservations, everything. We need to leverage that data to get to know our customers, what does their business look like, how can you better accommodate?
Up your game on being discoverable online and to differentiate yourself. And make your prices discoverable, give people the ability to plan as they re-think their commutes. Those are the ones that will be more relevant.
Security isn’t there anymore, the sense of stability has taken. Value is going to play a much larger role. Parking operations need to sharpen their pencils on their pricing. Static pricing on a sandwich board is not going to work anymore.
"Parking doesn't generate demand, we service demand. When you lower your rate, do you generate new demand? No. You take market share. So, as an industry, we have to figure out a new way to price to fight for market share. Dynamic pricing is going to play a big role in that." - Rick West
Now's the time to be proactive with technology and data to asses your portfolio and opportunities
Recovery strategies starts with an assessment of your portfolio. There are many solutions to support digital payments in surface lots, but as you get into valet or gated locations, it gets more complex but the solutions are out there. Develop your strategy, site by site, to understand the path to digitizing and upgrading operations and improving safety measures.
If you have a completely contactless location, make sure people know, market it, use pictures. People are going to start to seek this out to reduce their risk.
"Data is king. Parking is one of the only industries where the customer is anonymous. That's not going to work anymore. You need to tailor new products, and you need the data for this." - Ben Martel
Get your data together, measure it and start managing. Get the visibility online, and leverage solutions to enable contactless and frictionless parking. Accelerate the adoption of technologies. Try things out, faster.
"A resiliency plan that deals with re-focusing the business is key. This is an opportunity to accelerate technology and the collaboration of systems." - Roamy Valera