Friday, October 26, 2012

Go Counties Manukau!

Very happy week.  Counties Manukau are the champions!!


I couldn't bear to let the weekend go by without a comment on the 'big match' coming up tonight.

Counties Manuaku rugby team are contesting the final of the National Provincial Championship tonight.  Far from the previous heydays of the mid 1990's and the championship winning side of the mid 1970's, the team presents itself with a winning season record, finishing 8 points clear at the top of the table and playing, by far, the most attactive style of rugby in a country who plays the most attractive style of rugby in the world.

Steelers! Go you good things!

Kevin Warwood

Don't Hate Cars, Just the consequences of oil.

Dear readers,

The article below makes some very good sense.

Why should we keep spending money on motorways and roads?  Becasue there is still a demand for them and the point of the article - technology will fix the issues with cars. 

I often wonder if it is oil or cars greenies hate, it seems to be both, where it only makes sense to dislike the consequences of oil powered vehicles.

Have a good weekend.

Kevin Warwood

Friday, October 19, 2012

On-Street Parking: A Stethoscope to Monitor a City’s Economic Activity and Vitality.

On-Street Parking: The Bellwether of a City’s Economic Activity and Vitality.

I have suspected for some time that there will be a ‘one thing’ that is the parameter that will show the health and economic vitality of a city and it will have something to do with parking.  I was right.

On-street parking, when monitored well (as a lot of cities still don’t do the monitoring bit well enough yet but is improving), can be the bellwether of a city’s economic activity and vitality.  A bold statement when there are so many other possible bellwethers out there and so many more that are more fashionable to monitor, such as inflation, building consents, GDP and others.  But none will give you the activity signal immediacy like on-street parking.

There are some rules that have to be in place first of course, you have to be able to monitor the parking meters occupancies or transactions in real time and it doesn’t even matter if you are still using abstract pricing.

On-street parking gives us the one signal to indicate how large, small or size of change that is occurring in the city and you can see it everyday in your parking stats.  I set up a group of reports from my ITSL metro parking machines to deliver data each morning that I can then compare to a standard norm for parking activity. I have had to spend a number of hours and my teams hours getting the right data as the reports from the machines are limited in scope, but we finally are able to monitor the change in activity everyday.

Think about it.  On-street parking is the recipient of every change that happens within a city.  If a construction site opens up, the car parks and the street are full of contractors and other related activities, so my reports show me that a change is happening and I go and look to see that a building is going up.  If a building is being demolished (likely in Christchurch right now), then a private car park opens up and drains the street with cheaper pricing.  My reports pick up a lack of activity in the street and I go and look to find the new off-street car park open and thriving with cars that were parking on-street.

On-street parking is like the collection of arteries and veins of the body.  They flow around the city picking up any changes to activity or vitality of the city.  Get your stethoscope out, make sure it can monitor what you want it to monitor and listen to the changes.

Kevin Warwood

Tuesday, October 9, 2012

Hotel Parking: A Neglected Profit Center

Hi bloggers,

I found this article which was interesting reading.  It made me think of a discussion I had with a hotel manager once while I was trying to get the car park to add to our business.  The story goes, I asked the manager if I could lease his car park building as his car park was half empty.  He said it was full.  I told him again, it’s half empty, I've just walked through it (which annoyed him as it was a secure site ....) to which he said, it was full, I get exactly the right t number of cheques a month for spaces in the car park.  I said yes, but that just means you’re selling the night time parking (when everyone is at home in the building or apartments).  There is room for casual parking and it would be a great money earner since you are 200 m from the CBD and restaurant and club zone. He looked at me and said (pause) "it’s still full".  I gave up.

There are huge missed opportunities in Hotel parking but educating the hotel owners can be a real issue.

Read it Parking Today at he following link or the article is copied below.  Kudos to Joshua Miller.




Hotel Parking: A Neglected Profit Center

Joshua Miller

Hotel owners and managers spend tremendous time and energy looking for strategic ways to make the most of their hotel asset. What they often fail to look at is that the hotel itself usually sits in the middle of or adjacent to a large parking facility.

This facility often takes up as much real estate, if not more, than the hotel itself. But because parking is outside the core focus of the industry, parking facilities are rarely strategically managed. As a result, the extremely profitable dollars of parking revenue are often left on the table.

Revenue Control

 Most hotels do not view parking as a profit center, but rather as a service amenity. As a result, hotel parking management is usually focused on providing quality service. As long as customers are arriving and departing from the hotel without complaints, most hotel managers are happy, particularly if some revenue is generated along the way.

This thought process often results in parking department managers being promoted from the position of bellman, valet, security officer or front desk agent. If these employees can ensure consistent service, then they are viewed as competent for the job. Unfortunately, they rarely have any business or financial training, and are then put in charge of what can sometimes be a multimillion-dollar operation.

In addition to the lack of training and development, the hotel parking accounting process is inherently complicated, as there are many different hands in the financial “pot.” Hotel guest parking charges are generated by front desk agents adding a code in the front desk management system during the check-in process, but agents often forget to do so.

Event charges are often posted to group master bill accounts by the hotel accounting team, but the amount posted is based on data generated by the parking staff.

Lack or Neglect of Technology

Many smaller hotels or hotels that are first experimenting with charging for parking do so based on the honor system. Only hotel guests are charged, and only those that admit to having a car ever see the fee. The honor system does not work in a hotel environment, and we often see as much as 50% or more customers with a vehicle parking for free.

Controlling access to the facility with parking technology prevents people from leaving the property without paying. Those hotels that do use technology usually purchase a PARCS (parking access and revenue control system) during initial development or when major renovations or ownership changes occur.

These systems are then left in the hands of various department managers who turn over every year or so. Unlike property management systems or physical plant equipment, they are not typically maintained by an IT or engineering department and eventually begin to fail, until they reach the point when those revenue control features they might have offered do not work anymore.

Charging for Parking

Another way that hotels don’t maximize their parking assets is by failing to charge in a market that supports doing so. Many isolated resort, limited service and suburban properties do not charge parking fees for fear of driving their customers away.

They claim that customers faced with a decision between two similar hotels will chose the one without a parking fee. We disagree. While no one wants to pay additional charges if they don’t have to, we see that most guests make their decisions based on brand loyalty, location and/or amenities.

Unless the parking rate is going to be exorbitant, this is not typically part of the decision-making process. We recognize that customers often complain about paying for parking, but they also complain about telephone call rates, high-speed Internet charges, mini-bar fees, room service prices, etc.

The decision to charge should be based on a competitive market survey. By checking the policies and rates of its competitors, the hotel will be able to understand what the market can support. It is important, when conducting this survey, that the hotel review its competitive parking market, rather than its competitive hotel room market.

Once the hotel has decided to charge for parking, just like hotel rooms, parking inventories need to be strategically managed so they generate the optimal revenue yield. Hotel revenue managers look at the value of different groups versus transient business, at how booking varying sizes of contracted corporate rooms affects the availability of transient business during peak and slow periods, what rates guests will pay at various periods of the booking window, etc.

It is rare that a parking garage is managed with this much strategy, but the strategy has the same financial impact on parking revenue as it does for rooms. Failure to manage parking revenue in this fashion is often the most overlooked and easily solved source of parking revenue loss.

Discount/Complimentary Parking

The next area of parking revenue management to consider is the use of discounting and complimentary parking as a tool for the sales and catering departments. Most hotels offer discounted parking to all events and many in-house groups. This is often done automatically rather than strategically. Just as a hotel would not waive a meeting room rental fee or provide complimentary upgraded bar liquor without strategic analysis of the value of the group, parking should not be given away without consideration either.

The last aspect of parking revenue management that often goes unaddressed is utilizing parking inventory to its maximum potential. Hotels that pay for overflow parking when they can fit more vehicles on-site fail to maximize their inventory. This is also true of hotels that pay for overflow parking appropriately but do not track usage and confirm filling from their overflow garages. We often find hotels getting over-billed because they are unaware of their actual usage.

Contract Management

Many hotels outsource their parking operations to parking services vendors because they feel they do not have either the resources or expertise to manage the operation themselves. A parking vendor can offer skilled revenue control, claims management, flexible staffing and professional service, so outsourcing is often an excellent decision. However, the lack of expertise that directs the hotel toward outsourcing can sometimes lead them to negotiating unfavorable contract terms.

Without knowing what is going on in an operation, it is possible to make deal terms that seem competitive but are later discovered to be not as great as originally planned. Consider the example of an internally managed operation about to be outsourced into a percentage rent agreement.

A hotel might make a great deal with their new operator, only to find out later that there was so much extra revenue on the table from the revenue control problems mentioned above, that they end up paying the operator much more than they had planned. Without expertise, parking operators will always have the negotiating advantage when making deal terms, especially in revenue sharing scenarios.

Management agreements in which an operator makes some sort of management fee and passes the expenses on to the hotel are usually less risky if the hotel expects to make a big improvement. However, the set fee can also fail to offer proper incentive to the parking operator.

In addition, market conditions can change such that the original terms no longer make sense. Changes such as increases in rates or operational flow that requires more or less staffing can significantly affect the bottom lines of the hotel or the operator. These changes must be considered in advance and as they occur to determine if the deal structure still makes sense.

Contract compliance can also be a major issue for hotels. As with many contracts in a hotel environment, once the deal is executed and the hotel is satisfied with the operator, the contract goes in a file in the accounting or corporate office, never to be looked at again until renewal. Hotels can be easily taken advantage of in these circumstances.

Operators sometimes “sneak” through costs that were not agreed upon, fail to follow service plans like secret shopping, fail to pay additional rent if certain thresholds are met, etc. A controller or general manager should review their parking agreement on at least an annual basis to ensure that the terms are still fair and that all parties are living by them.

Even though parking is considered an ancillary department that generates only a smaller portion of overall revenue, if effectively managed, it can be one of the most profitable minor operating departments in a hotel. The bottom line of a large hotel parking operation can sometimes contribute more EBIDTA than the hotel’s restaurant. All it takes is the same strategic planning, analysis and oversight that hotels put into the rest of their activities.

Contact Joshua Miller, Principal and Managing Director of Niche Advisors’ San Diego office, at

Dunedin Hospital - A case of the frog boiling slowly.

Dunedin has been in the midst of a Hospital Parking crisis for sometime.  Infringing preganant woman is an extreme step to realise that.  Might be a case of the frog being boiled slowly.

Monday, October 8, 2012

Mall Parking - people in circulating cars are not shoppers, they’re people circulating in cars!

100% parking performance is difficult to achieve.  To demonstrate this, picture a row of car parks.  Each car park has a car in it.  As a car pulls out, another parks and takes its place, with no queuing, no double parking and no vacancy.  This is the right number of customers that the car park resource can funnel into the mall.  Too many cars, resulting in double parking and circulating, is a system where the managers don’t have the car park resource operating correctly.  Circulating cars are not shoppers, they’re people sitting in circulating in cars!

In 2008, we were running a trial on parking enforcement in a mall in South Auckland.  The mall owner was keen to see how our new ‘camera car’ was working so we started to use the mall as a trial.  One part of the mall had a P90 restriction as it was adjacent to the local Courts, whose customers were parking in the mall.  The rest of the car park had staff dotted around and clogging up the best car parks during the day.  Turning over car parks is one of the best ways of increasing through-put of customers per car park and these two groups of people were lowering the car park turnover and consequently causing a lower number of customers through the mall. 

The car was fitted with two cameras mounted on the roof.  The car would slowly work its way up the aisle and then in 90 minutes, come back to do it again.  The abuse was incredible.  The enforcement numbers climbed dramatically and so did the revenue to the mall owner.  The phone call volumes to the mall management office and the parking turnover climbed as well.  This was a major shift away from the car park being self managing to an active management style.  The system created free car parks for customers but also generated complaints.  In the end, the mall company relented and asked us to slow the enforcement down a bit.

Mall owners have constantly said to me that when I want to raise a price to slow down the flow of cars into a mall car park because there are circulating cars, double parking, rage incidents and property damage occurring due to congestion, then it will somehow hurt the mall’s business.  The approach is to clear out the car park of all those who are not adding value to the mall, to make room for those who are adding value.  That means staff, people who are parking from neighbouring sites and contractors, should be moved on or asked to pay, so as to raise their value to equal that of the shopping customer.  It must be learnt that people circulating in cars are NOT customers,  they are just people circulating in cars in your car park because your car park is not efficiently run and it is acting as a bottle neck to your business.  Clearing out those who add less value is a sensible business decision.  High performance parking in malls is also a sensible business decision.

Parking performance is simple enough to implement, even a poor mans version.  It’s the collection of data to see how well your car park is operating, then analysing the peaks and troughs, dividing your car parks up into zones, the distribution of high value customers to the best spaces and the restriction through price, time restriction or parking equipment to lower value customers to those spaces. 

The best solution is to have exactly the right number of people parked in exactly the right number of car parks, with no circulating, double parking or vacancy …. for as long a period during the day as you can get.  Customers will be happier, retailers will be happier and people may enjoy going to your mall.

By Kevin Warwood, parking specialist