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.
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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.
ABM has been leading the charge and adopting these sorts of digital solutions.
"If you had a full-time manager sitting in a in room with seven computer monitors, constantly analyzing the behavior change - that's what dynamic pricing does does. It analyzes when parkers enter, how long they saying, and determines the right price point. Quite frankly, this is a job that's better suited for a piece of software than a human being." - Cassius Jones
In 2019, ABM implemented Smarking’s dynamic pricing solution in Manhattan and has been expanding since then.
Since June 2020, Smarking’s dynamic pricing engine (AYM) has generated a 95-250% revenue increase for online sales, producing $90,000 - $200,000 of additional revenue per year.
As of Nov. 2020 online sales channels are ~3x pre-pandemic levels, an incredible feat given that the industry on avg is down -60%.
Despite the impact of COVID-19, this garage experienced a significant revenue increase since implementing AYM. Demand varies per region, making it vital to customize rates per location, and monitor on a regular basis.
Brian Bush: It was important that we had buy-in from our managers, branch managers, facility and operations managers, and it was an education process for everybody.
"We oftentimes are debating on phone about what the system is telling us to do. And it goes against our every creed in our what we've learned in the parking world. But you have to take that risk. You have to let the data speak for itself. Have the buy-in, set the rates, and watch.
If we set a rate on a Friday we can't wait to come in on Monday and see how it performed over the weekend. And you have to keep keep nurturing it along. But I think it's ever so critical that if you do roll this out, you have to have buy in from top to bottom." - Brian Bush
Understand the Relative Performance of Your Locations by Benchmarking
ABM's performance relative to the New York parking market, shown on Smarking's Industry Benchmark
Matt Andrews: You know, most parking people and operators have a pretty good pulse on what's going on in our areas. But it's hard to see the market as a whole, and when COVID hit, we had to pretty much had to throw the budgets out the window.
So, we used the Industry Benchmark to articulate what we're seeing in the garage, how it compared to budget, and how to compare to the industry to understand what's going on.
And, being able to get your data on a national-level and then more granular like, Chicago or New York, and have a sample of different garages and locations that are aggregating into there, letting us know how the basic performance of the market is.
"We can then give that information to our clients, let them know where the market is, and then show them how they're performing against it. We can still give them that sense of confidence that their garages are performing as expected or above the industry." - Matt Andrews
I think, that's really important for asset managers and property managers to know that while the numbers might not be hitting those budgets standards that we put forward or what we saw in 2019, we can still give them a sense of confidence that we know what's going on in the market and their garages are still performing either where it should be or above the industry and in the area.
Top Recommendations for 2021
1. Make the Most of Your Current Equipment
Real-time access to the performance of your parking assets allows you to make data-driven pricing decisions and demand-based staffing decisions.
2. Leverage Online Sales Channels to Accelerate Revenue Recovery
With online sales channels and dynamic pricing, your locations can automatically keep up with the optimal rate structure for the unique demand patterns of each location.
3. You Can’t Manage What You Don’t Measure: Data-Driven Management
Benchmark your locations against the market and identify regional trends. Real-time data allows you to double down on what’s working and adjust what isn’t.
On average, asset owners and operators are missing out on approximately $1,600 per month without dynamic pricing. See if dynamic pricing is a fit for your operations, chat with our team for a consultation or to learn more about how it works.
Meet the panel
Stan Bochniak Matt Andrews Brian Bush Cassius Jones
VP of National Branch Manager Regional VP Head of National Accounts
Parking Sales