Updated: Feb 24, 2021
Regional Vice President of ABM, Brian Bush, VP of National Parking Sales, Stan Bochniak, and Branch Manager, Matt Andrews, discuss best practices amid COVID-19 and opportunities to accelerate revenue recovery. Hosted Cassius Jones, Head of National Accounts at Smarking.
Now's the Time to Pay Attention to Parking: Emerging Trends for Real Estate Owners
Parking is a key infrastructure in all major urban markets and verticals: retail, entertainment, restaurants, hospitality, and more. It's an asset class that isn't going anywhere, especially as commuters switch from public transportation. Even in today's environment, parking revenue is still flowing in and providing much-needed cash flow for asset owners.
Real estate owners are leveraging the steady cash flows from parking assets for a stable investment that is significantly less competitive than other asset classes.
As of February 2021, daily peak occupancy across North America is 21% on avg (down from 55% in 2019), while ABM locations in NYC are averaging peak occupancies of 67%; outranking 86% of locations in North America.
Given the vacancies, asset owners are opening up residential parking to the public as a new revenue source.
"Some of the most resilient assets here during the environment have been garages associated with residential assets, if cars are not in office garages, they are sitting in a residential oriented garage. So we're seeing more owners of residential real estate think critically about how to monetize the parking component" - Cassius Jones
Parking Management in the Digital Age: Do More With Less
Matt Andrews: A major issue was that we had several different type of revenue control equipment throughout the entire country. Those all have their individual ways of pulling data and getting that data out typically. We'd have to charge our managers to try to pull that data out, and put it in something that's readable.
And at that point you're looking at old data, and you're trying to make adjustments in the garage based on the older data, and that's just not very effective. As the emerging technology of online payments came onboard, we saw a need to streamline that process.
So with Smarking, we found gave us the ability to integrate with several systems and access all of our data across the country in real-time.
Matt, can you tell us how you've been able to leverage real-time data to enable remote management and about the agile operations that you guys have been enabled in Chicago?
Matt Andrews: One of the most important things for us during this time was to find efficiencies and cost savings for our clients, while also maximizing our employees' time when working from home. We gave access to those managers to spend time doing data analysis and pulling up additional locations.
By giving them the ability to login to other locations, they can analyze how those locations performing on a day-to-day basis. Every day in the morning, pull that data take a look at, make adjustments for changing rates. Or, do we need to be more competitive under our specials and doesn't make sense to have a higher evening radar? Should we come down on those?
That really allowed our managers to be remote and still do very high quality level work and maximize as much revenue as they can for our clients.
If You're Not Online, You Don't Exist: Online Parking Demand Outpaces Offline Sales
YOY US Visitor Parking Activity (Offline): +29.61% of YoY demand has been recovered since the start of pandemic-related shutdowns in March 2020.
YOY US Online Parking Demand: +40.75% of YoY demand has been recovered since the start of pandemic-related shutdowns in March 2020.
Traditional Pricing Strategies Are No Longer Sufficient
Stan Bochniak: There are definitely has been a shift in and the patterns. It's still emerging. Most of us are calling 2021 now reset year as we're trying to figure things out.
New commuter patterns emerge as more people WFH and adopt hybrid in-office models
Peak entry times and duration of stay have shifted significantly: Currently we're seeing shorter stays and commuters coming in later in the day
Are your monthly parkers shifting to daily? How have your rates adjusted for the new patterns?
"The key is the communication and monitoring that data as it's moving along through the whole cycle that we're going through." - Stan Bochniak
Brian Bush: I think you hit it right on the head about the consumer makeup is changed, you know, certain properties, we know we're attracting new customers. They may be customers that were previously riding, public transportation, that we've converted to our locations.
"There are certain locations that are going to get their share of volume just because where they're located, but you also have the right rate. Today, people are looking at your rate more than they're looking at your location." - Brian Bush
So it's important that when you do receive your data, that you work with your managers to make sure they're making sound pricing decisions on the data that's being provided. And ask, are your current rates capturing opportunities and creating new demand?
How Did ABM Achieve a 95-250% Revenue Uplift?
Cassius Jones: One of the things that we've been working on with ABM is implementing dynamic pricing on their online channels.
Earlier, I talked about that shift from physical in person transactions to digital transactions and, at Smarking, we're fans of taking a look at the airline and hotel industries and using those as a bellwether for where we think parking is gonna go.
One of the things that hasn't been happening in those industries, right outside of more digital transactions, is just leveraging variable and dynamic pricing strategies in order to better align demand with supply. Not only does this create better revenue outcomes for the supply side, the airlines and hotels and parking asset owners also actually creates a better consumer experience because you've got more evenly distributed demand.
This dynamic pricing solution is an algorithmic demand-based pricing program that Smarking developed back in 2018. ABM was one of our first clients to adopt the solution in in the Big Apple back and in 2019.
What the solution does is it is effectively automates the pricing of parking on your online digital sales channels. It's an algorithm that's basically predicting demand and finding that optimal price point in order to maximize revenues and occupancy levels.