apa_ipi progressive rate presentation 061112

Michael Klein, CAPP Executive Director Albany Parking Authority Progressive On-Street Rates Eliminate Time Limits, Enhances Customer Service, Generates Turnover, Supports Economic Development, and Improves the Bottom Line Presented at the June 2012 IPI Conference and Exposition

Implementing On-Street Market Based Rates

Thanks

• Albany Parking Authority

• International Parking Institute

• Parking Professionals

Special Thanks

Don Shoup

• Market based economic approach

• The High Cost of Free Parking

• Provided a variety of slides and references

THEME

ROADMAP

• New Paradigm

• Progressive Rate Structure

• Signage

ROADMAP

• Marketing

• Customers

• Financial

New Parking Paradigm

Coin Only Payment

1935 First Parking Meter Installed

Oklahoma City

Payment platform limited

Photo credit: Don Shoup

Rationing & Price Control Results

Shortages - queues

Inefficiencies – cruising

Favoritism & corruption

Cost of Free Parking

• The High Cost of Free Parking

Payment Platforms

• Multi-space meters

• Smart single-space meters

• Pay by (cell) phone

• Virtual payments

Market Pricing

Demand Based Approaches

•Time of Day

•Day of Week

•Length of Stay – The APA Sweet Spot

•For Special Events

Progressive Rate Structure

0

5

10

15

20

25

1 2 3 4 5 6 7 8 9 10

Do

llars

Hours

MSM

SSM

• Economics 100 – supply, demand & price

• Economics 300 – price ceiling & rationing

• The High Cost of Free Underpriced Parking

• The right price is the lowest price for ~ 85% occupancy

• The right price will vary by block, time and day of week

• Parking is like a spot market in land rental Credit: Don Shoup

Right Pricing

The Goldilocks Principle

Credit: Don Shoup

Old Rate $1.25/hour 2 hour max

New Rate $1.25/hour First 2 hours 3rd hour @ $1.50 4th hour @ $1.75 NO!!!

Is This a Rate Increase?

• Gradual unit price increase for new service

Occupancy & Turnover

• By block-face

• By time of day

• By day of week

Occupancy

No significant change in occupancy based on new platform and progressive rates

Turnover

- 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00

NORTH NORTH SOUTH SOUTH NORTH SOUTH SOUTH TOTAL

LODGE JAMES LODGE PEARL EAGLE GREEN BROADWAY

PEARL BROADWAY EAGLE LODGE LODGE PEARL GREEN

STATE STATE STATE STATE STATE STATE STATE

TURNOVER

TURNOVER

State Pearl Lodge North

MSM PURCHASE AMOUNT PER HOUR OF DAY

MSM NUMBER OF CUSTOMERS/DAY

Turnover = 7.2 customers/space/day

State Broadway James North

MSM PURCHASE AMOUNT PER HOUR OF DAY

MSM NUMBER OF CUSTOMERS/DAY

Turnover = 3.4 customers/space/day

State Eagle Lodge South

MSM PURCHASE AMOUNT PER HOUR OF DAY

MSM NUMBER OF CUSTOMERS/DAY

Turnover = 5.3 customers/space/day

State Lodge Pearl South

MSM PURCHASE AMOUNT PER HOUR OF DAY

MSM NUMBER OF CUSTOMERS/DAY

Turnover = 7.3 customers/space/day

State Lodge Eagle North

MSM PURCHASE AMOUNT PER HOUR OF DAY

MSM NUMBER OF CUSTOMERS/DAY

Turnover = 5.5 customers/space/day

State Pearl Green South

MSM PURCHASE AMOUNT PER HOUR OF DAY

MSM NUMBER OF CUSTOMERS/DAY

Turnover = 5.7 customers/space/day

State Green Broadway South

MSM PURCHASE AMOUNT PER HOUR OF DAY

MSM NUMBER OF CUSTOMERS/DAY

Turnover = 4.1 customers/space/day

• Leverage your industry contacts

for best practices and advice

Signage

• Plan for the future – Now and Later

Marketing

Value of working with a professional communications firm – Gramercy Communications

Identify earned

Media opportunities

Positive – Proactive

Consistent

• Be Creative

(audio)

• Communicate on all platforms

• Provide useable information

• Be a credible source

Between April 2011 – November 2011

Print Media 5 print placements

Online Media

19 placements

Broadcast Media 34 placements

• Total Advertising Value Equivalency “AVE”

- $51,198

• Total PR Value

- $180,869

Customers

• Complaints of the 2-hour limit – meetings

• Exposed to tickets – want to do the right thing

• Off street parking – not close enough

General Challenges

• Albany is the Capital of New York

• Significant amount of visitors

• State employees – feeding meters

Unique Challenges

• On-street parking for one hour = $1

• Off-street parking is at least $20 for the first hour

• How long would you cruise rather than paying the higher rate? Credit: Don Shoup

Cruising

Credit: Don Shoup

Financial

SHORT STAYCUSTOMERS

LONG STAYCUSTOMERS

SHORT STAYREVENUE

LONG STAYREVENUE

# of Spaces # of M-S Annual Annual Dollars Projected Investment Payback

Block Face W/O H/C Meters Time Limit Cash CashKey T`otal

Per Space New Revenue Per Space

Period

State - Broadway - James - North 5 1 2 HR $11,926.15 $30.50 $11,956.65

$2,391.33 $358.70 $2,000 5.6

State - Eagle - Lodge - South 21 2 2 HR $42,957.25 $108.25 $43,065.50

$2,050.74 $307.61 $952 3.1

State - Green - Broadway - South 6 1 2 HR $13,394.65 $41.25 $13,435.90

$2,239.32 $335.90 $1,667 5.0

State - Lodge - Eagle - North 26 3 20 MIN & 2 HR $47,432.45 $344.25 $47,776.70

$1,837.57 $275.63 $1,154 4.2

State - Lodge - Pearl - South 25 3 20 MIN & 2 HR $55,383.00 $251.25 $55,634.25

$2,225.37 $333.81 $1,200 3.6

State - Pearl - Green - South 8 1 1 HR $15,004.05 $105.25 $15,109.30

$1,888.66 $283.30 $1,250 4.4

State - Pearl - Lodge - North 10 1 2 HR $23,523.55 $107.75 $23,631.30

$2,363.13 $354.47 $1,000 2.8

Grand Total or Average 101 12 $209,621 $988 $210,609 $2,085 $312 $1,188 3.8

Phase 1 Budget Plan

Budgeted for 15% revenue increase

Phase 1

0

200

400

600

800

1000

1200

1400

COST PER SPACE PROJECTED NEWREVENUE

PAYBACK PERIOD

Series1

Phase 2

• Budgeted for 15% increase

• Better indicator due to 1:1 replacement

• Actual increase 29%

Phase 2

0

200

400

600

800

1000

1200

COST PER SPACE PROJECTED NEWREVENUE

PAYBACK PERIOD

Series1

• Budgeted CAPEX of $10,000/MSM

• Meter (installed)

• Signs (installed)

• Parking Ambassador program

• Marketing

Budgeted OPEX - no change

• Increase in back office expense

• Credit/Debit Card processing costs

• Decrease cost in labor

• Various puts and takes for maintenance

Budgeted OPEX no change

• Replace labor

with capital

• Actual revenue better – due to progressive rate structure

• Actual OPEX – still too early to report on results

Future Plans

• Phase 3 – continue migration

• Incorporate Smart Single-space meters

• Pay by cell phone add-on

• Integrated payments & enforcement systems

• Other virtual systems

RECAP

• We must be willing to think differently – simpler

• The progressive rate structure WORKS!!!!

• Signage – consistent, clean and simple

• Marketing Matters

• Engage and listen to our customers

• Analytical focus – believe in the research

THANK YOU FOR ATTENDING We hope you have enjoyed this presentation. If you’d like to

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