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VPNE Partners with Smarking to Increase Parking Revenue and Asset Value for Commercial Real Estate Owners
Since 2015, VPNE has partnered with Smarking to enable data driven parking operations and yield management by deploying Smarking’s Business Intelligence Enterprise SaaS across its New England portfolio. The collaboration has led to higher operational efficiency, better parking services, and increased revenue growth for VPNE and its clients.
Project Scope
VPNE piloted Smarking's Automated Yield Management (AYM) platform at two garages in the Fall-Winter 2018. Early success at these locations (Fig. 1) prompted the expansion to additional 11 garages in Spring 2019.
Key Results
By July 2019, AYM has led to a 101% increase in online revenue on a single online sales channel, which presents $485,000/year revenue growth (Fig. 2).
Beyond Business Intelligence: Revenue Boost through Automated Dynamic Pricing
In 2018, the VPNE and Smarking partnership advanced to a new level when the two firms implemented a fully automatic dynamic pricing engine, the Smarking Automated Yield Management (AYM, read as “aim”) system; the first time automated dynamic pricing had ever been implemented in the parking industry. By July 2019, AYM has increased digital revenues by 101% across 13 VPNE parking facilities, bringing in an additional $485,000/year in revenue.
At a 5% cap rate, AYM’s revenue contribution represents $9.7 million in parking asset value uplift for VPNE’s clients. The joint success reinforced VPNE’s market leadership in New England, and elevated the market practice of yield management for the parking industry.
FIG 1. EARLY AYM RESULTS AT PILOT GARAGES: WEEKLY PARKWHIZ REVENUE
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Garage A in Boston, weekly online revenue grew from $1,206 before AYM to $2,134 after AYM
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YoY online revenue growth went from 131% to 208%
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Garage B in Boston saw weekly online revenue grow from $965 before AYM to $2,710 after AYM
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YoY online revenue growth went from 133% to 674%
FIG 2. MONTHLY ONLINE REVENUE AT GARAGES WITH AYM
AYM’s success is more significant when compared with the long-term revenue trends of other online channels with conventional rate setting. Over the same period, a non-AYM online channel revenue growth averaged 48% across these garages, and transient drive-up’s revenue growth averaged 0.25%. This also indicates that before and after AYM, there is no cannibalization across online channels or between online and drive-up channels. By offering parkers more options and more competitive rates during off-peak hours, and charging premium rates during peak hours, AYM has helped VPNE capture incremental yield and deliver a steadier stream of parkers to the garage.
The “Headline” Garages: Where Can AYM Be Most Successful
AYM’s success is most pronounced at “headline” garages – garages that have excess parking inventory during off peak hours, located in urban areas with a diverse mix of parking demand, and with higher-quality historical parking transaction data that helps empower AYM’s machine learning algorithm. For example, at one garage in Cambridge, where AYM enabled online revenue has more than tripled since the activation, the occupancy pattern of online parkers has become more steady, indicating that AYM was able to capture demand during off-peak hours when the garage had excess capacity (Fig. 3).
“Smarking represents the next step in digital-first parking management, and gives our garage and regional managers the tools they need in order to run an efficient and more profitable business."
Nick Litton, COO &
Partner, VPNE
FIG 3. GARAGE C IN CAMBRIDGE, AYM ENABLED ONLINE IN CAMBRIDGE, AYM ENABLED ONLINE WEEKLY REVENUE AND PEAK OCCUPANCY
Weekly online revenue increased from $241 before AYM to $1,318 after AYM
Daily peak occupancy’s fluctuation decreased after AYM started, showing that AYM has added volume at times when the garage has excess capacity.
Similarly, AYM is able to capitalize on historically slow weeks and capture incremental revenues. At Garage D, AYM performed best during the week of July 4th when transient drive-up and contract parking demand was much lower than usual (Fig. 4). By identifying this trend, AYM automatically adjusted its products and pricing to capture complementary demand, resulting in better utilization of the garage’s empty spaces while generating more revenue.
FIG 4. D GARAGE AYM ENABLED ONLINE REVENUE VERSUS DRIVE-UP WEEKLY REVENUE
AYM enabled online revenue peaked at $3,484 in the week of July 4th when the drive-up demand was at its lowest, indicating that AYM successfully captured complementary parking demand.
Partnership with Smarking: Data Driven Parking Operations and Yield Management with Business Intelligence
For VPNE, Smarking is a tool to amplify the impact and intellect of VPNE staff - from garage managers, to regional managers, to C-level executives. VPNE uses Smarking to unify near 50 parking access revenue control systems (PARCS) across its parking portfolio onto one platform. The Smarking platform helped VPNE streamline parking management process and information flow. For example, a portfolio-level parking performance trend analysis that used to take a regional manager several days to complete now only requires a few clicks on the Smarking dashboard. As a result, VPNE is able to serve their clients more efficiently and effectively, while saving managers hundreds of hours on different levels throughout the year, across the organization.
VPNE utilizes Smarking’s data analytics tools to capture the latest changes in local market and to optimize parking pricing and inventory allocations accordingly. At one garage that has shown rising peak occupancy, VPNE promptly made a rate change that resulted in a $67,556 (13%) revenue increase in a month.
In addition to daily parking management, VPNE also leverages Smarking’s technology to communicate with major commercial landlords and key stakeholders about market trends and key parking performance metrics. For example, to understand how ride hailing services such as Uber and Lyft have affected parking demand and revenue, VPNE’s Yield Management Analyst visualized long-term parking occupancy and revenue trends across multiple garages using Smarking’s dynamic data visualization tool set. This effectively elevated the relationship between VPNE and their clients, as projects of this kind can only be carried out at reasonable cost with a market leading business intelligence platform that’s designed, built, and supported for parking professionals.
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VPNE: The Leading Parking Operator in New England
Founded as Valet Parking New England in the 1990’s, VPNE is the region’s leading parking operations firm. High-profile properties managed by the VPNE team include the Prudential Center Garage, Back Bay Garage, Kendall Center Garages, 100 Clarendon Street Garage, and 47 Boylston St. Garage, owned by elite commercial real estate landlords including Boston Properties, Oxford Properties, Tishman Speyer, and many others.
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