The world has changed and parking is no exception. With parking revenues down 90-95% we are far from a return to normal in parking. In fact, consumer studies show most people are awaiting a vaccine before returning to their normal routines. Rather than tighten down the hatches and wait for this long storm to pass we should all embrace and adapt to a new reality. Demand is unlikely to recover quickly, staff and customers have new expectations, and history shows us change is critical to survival.
Parking demand will not have an immediate recovery
A concept gaining traction in the parking industry is that commuter parking revenues will increase due to a drop in demand for public transit from safety concerns. However, a long term decrease YoY in commuter revenues seems more likely when you consider our nation’s shift to working from home. As Business Insider points out, even the offices that are reopening are asking their employees to split time between the office and working from home.
Here are what the numbers say about possible outcomes:
Let’s assume that the predictions about a long term drop in public transportation are correct. Cities have very different public transit ridership levels (1.2% in Kansas City vs 56.6% in New York) so public transportation ridership changes will impact these areas very differently. Indeed, the few cities with very high public transit ridership could in fact see an increase in revenue. However, let’s take a look at Atlanta (9.8%) as an average American parking market and say that 50% transit commuters start driving.
Let’s also assume the trend of working from home and working less than 5 days in the office continues. Conservatively, let’s say people will work 2 days per week from home on average (this number is right in line with current forecasts).
Our change in commuter parking demand could be projected at: 9.8% * 50% = 4.9% Increase in commuter parking demand from less people taking public transit 2 / 5 = 40% Decrease in demand from people working from home more days per week
In most cities, the reality is commuter parking will likely suffer despite the high expectations set by the prediction of public transportation changes.
Staff and customers expect parking companies to provide a safe environment
In a study conducted by VRBO, 51% of consumers said they will be paying close attention to sanitizing standards. Locations that offer contactless payments (reduced human and physical contact) and market it effectively will see a larger demand than similar locations who do not offer those payment options. This presents an opportunity for parking companies to differentiate themselves from their competitors.
Parkers aren’t the only ones concerned about their health, employees are too. With only 49% of employees responding that they feel their company cares about their well being, worker safety needs to be addressed by managers to prevent turnover or worse - infection. While sanitizing and employee education goes a long way, changing business processes to reduce employee contact with each other and customers is critical to stay in compliance with health guidelines.
It’s hard for employees to stay six feet away from customers and each other when they don’t have the proper tools and processes. Some parking companies have been able to move their workforce remotely with ease since they already had cloud based systems, automated attendants, and touchless payment options. Other operations are restricted by their manual processes that require admins to be in the office and employees to come in contact with customers at parking locations.
Dr. Megan Healy, Chief Workforce Development Adviser to the Governor of Virginia cautions, “there's a liability to you knowing that there's potential hazards in your workplace and you don't do anything about it.” Not implementing processes and tools that protect employees and customers can escalate to a Department of Labor investigation and mostly importantly risks lives.
History shows us how to overcome this
Fortunately, during times like these we can always turn to the lessons from our past to learn about who survives and why. A similar level of turmoil rocked the airline industry in the wake of 9/11. Airlines took a massive hit and the industry split into two different types of companies.
There were those who were too stubborn to change their business and joined the ranks of the airlines who were merged or had their market position crippled by competitors with more efficient models.
Then there were airlines, such as Alaska, that took radical action to streamline their processes, renegotiate agreements, and outsource work wherever there was economic benefit; these airlines emerged from the crisis with new competitive advantages that allowed them to capture new market share.
History shows us that this crisis, much like 2001 for airlines, will be a final blow to some parking companies and a triggering event for new growth for others. It’s apparent that COVID-19 and the after effects from it will be our reality for sometime. Fortunately, we have guides to help us through this. Clear customer and employee expectations about safety is our guide. The lessons we learned from airlines about streamlining businesses is our guide. We have the tools to determine our own destinies.