Airports look to boost non-aeronautical revenue to both keep costs down for tenant carriers while also maintaining normal operating standards and a healthy operating budget. Customer parking can be a major income generator for airports, says consultant Michael Civitelli, a commercial parking industry veteran and former airport operations manager. “Airports are where the really big money in parking is,” he says, “Especially at the larger hubs.”
Walker Parking Consultants’ Michael Civitelli spent more than seven years at the Seattle-Tacoma International Airport, eventually becoming senior manager of land side operations, managing parking operations for both the public and employees of the airport. He then spent a year and a half as operations manager for the Colorado Springs Airport before moving into his current position at Walker.
Walker Parking has been around for about 40 years, relates Civitelli, and is a leader in comprehensive parking services. Walker performs operational consulting for many airports, mostly in the areas of rate-setting analysis and parking audits.
“The company also conducts operational program analysis, where we come in and take a look at the entire operation; how it runs — is it efficient and effective?” says Civitelli.
“A large part of our business is in helping airports restore older facilities so they can get additional life out of them; that is the kind of service that’s in demand in an economy like we have now.
“We come in and do a condition assessment and provide the airport with guidance all the way through documentation and managing the construction process to basically rehabilitate an aged facility.”
A profit center
When asked about the common ways airports can lose potential revenue in relation to parking, Civitelli says two ways come to mind immediately:
1) “If there are any kind of internal issues. Airports are where the really big money in parking is; we are talking tens of millions of dollars in revenue, often more than $50 or $60 million per year. Airports can have a difficult time if they don’t have good systems and technology in place or don’t have the right kind of oversight making sure that the revenue the airport should be earning gets into the bank.
2) “On the business side, there are a number of airports that face very stiff competition from the private sector. As customers approach the airport they can see a number of private economy parking operations that are competing with the airport every day for both business and leisure travelers.”
Civitelli explains that a number of airports have really started to compete better, in terms of both the diversification of parking programs and the implementation of new technologies.
“Before the recession, airports were diversifying their parking programs, offering anything from new customer amenities to new types of parking programs, including anything from reserved parking to valet parking to monthly parking; and offering discounts to business travelers,” says Civitelli.
“Since the economic downturn, the trend this year in terms of generating additional revenue has been the old-fashioned strategy — raising rates.
“Airports are also certainly looking at cutting expenses; that’s how parking has changed…as the economy changed.”
According to a report published late last year by the National Parking Association (NPA), first hour on-airport parking rates in the U.S. averaged $3.78, with 24-hour service averaging $16.95. The report also indicates a lower average rate for 24-hour off-airport parking of $11.61.
Explains Civitelli, a lot of airport parking rates have gone up a dollar or two for long-term parking, with little change regarding short-term parking. In terms of cutting costs, he says airports look to labor first; and balancing staffing needs without negatively affecting the customer experience or service aspect.