apa_ipi progressive rate presentation 061112
TRANSCRIPT
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
get a copy of the audio of this session or any sessions this week, stop by SHOPIPI.com near the registration counters to
place your order.