Parking Companies Vying With D/FW

D/FW AIRPORT -- If you're headed to the airport and don't know where to stash the car while you're gone, expect to be wooed with gifts, discounts, extra services and plenty of parking.

Free bottled water and newspapers, $9 coupons, carwashes, oil changes and valet parking are just some of the inducements that Dallas/Fort Worth Airport and nearby parking-lot owners are wielding this weekend to survive in the highly competitive bid for parkers.

"It's a real battlefield," said Tom Lombardi, whose company closely watches the business of airport parking lots across the country.

His online company, AirportParkingReservations.com, not only consults with others getting into the parking business; it also reserves spaces for travelers at more than 200 parking lots at 65 airports, including D/FW.

"The airports have always taken for granted parking revenue because demand was always increasing," he said. "Airport parking is very competitive now."

For the longest time, airports across the country mostly dominated the $2.2 billion niche of the parking industry because they offered the most convenience with their close parking spaces, experts said.

D/FW Airport has seen its parking revenue grow 55 percent, from $53 million in 1995 to $82 million in 2004. But each year since 2000, it's been up and down.

The turning point in the airport parking industry came in 2001, when the number of air travelers dropped dramatically. That meant parking revenue also slumped.

Business travelers -- who were willing to pay the higher prices for convenient, close parking at the airport -- stopped traveling.

Leisure travelers filled the void, but they were generally more cost-conscious than business travelers, experts said. That opened the door for off-airport parking companies to lure travelers away.

Now officials from D/FW Airport say they are battling to win them back, and executives from parking companies say they're doing all they can to keep the foothold they've gained over the past few years. It comes at a time when the airport already feels pressure to increase revenues that are not directly tied to the volatile passenger airline business.

There are 10,070 parking spaces sprinkled around eight lots outside D/FW. The airport owns an additional 39,988 parking spaces on its 13 lots. Prices for off-airport parking range from $5 a day to $22. D/FW's daily prices range from $6 to $16.

D/FW, one of the world's largest airports in terms of land mass, says it has enough room today to handle everybody who parks away from the airport.

The airport's highest occupancy during peak times is about 23,000 to 25,000 parked cars, said Dean Ahmad, manager of revenue management at D/FW. Earlier this week, that got as high as 27,000 cars. That means the airport has almost 13,000 empty spaces - a 32 percent vacancy rate.

"We definitely would love it if everybody who is parking off-airport parked with us," said Ken Buchanan, executive vice president of revenue management for the airport.

But that would mean driving some of the parking companies out of business. It's not an unheard-of idea, experts said. Some airports on the East Coast have tried with mixed results to use their eminent domain powers to buy out parking-lot operators so that the airport is the only source for parking.

Executives for D/FW said competing with the off-airport parking operators is ultimately good for consumers because it increases the amount of services and keeps prices down.

Because of that competition, Ahmad said, parking on the airport's property is a tougher sell these days.

One of the biggest competitors to the airport is The Parking Spot, a Chicago-based company that owns and operates two lots at the north and south ends of the airport. The lots offer a total of 3,793 spaces.

Branding with spots

Industry experts and even one competitor said The Parking Spot has done a good job distinguishing itself with its branding, which includes black-and-yellow spotted buses.

"They've done a phenomenal job of branding themselves," said Paul Shomer, marketing consultant for Standard Parking Corp., another Chicago-based parking operator with airport lots under the brand name Park Air Express. "They're a great company."

The Parking Spot's image was born six years ago in the Metroplex, when one of the company's executives hired Dallas-based Square One Advertising to create its brand.

Mark Wildman, vice president of marketing for The Parking Spot, previously used Square One when he was senior brand manager at Miller Lite.

He knew how important it would be to stand out in a parking industry that was without a true national brand and was mostly run by mom-and-pop businesses.

"Branding and icons are very important for getting people to remember you," he said. "If you can paint a picture for somebody, it's a lot better than a lot of words."

The 7-year-old parking company is owned by Chicago's Pritzker family, which is famous for its ownership of the Hyatt Corp.

The closeness of Hyatt helped led to the kind of services offered by The Parking Spot, said Martin Nesbit, founder and president of The Parking Spot.

The services -- which include free bottled water, free newspapers, a frequent-parker program and a shuttle that picks you up at your car -- helped The Parking Spot make a name for itself, experts said. Parking Spot prices range between $7.50 and $9.50, depending on whether you want covered parking.

"The Parking Spot is probably one of the highest-quality parking lots in the country," said Lombardi, whose online service doesn't have a reservations contract with the Chicago company. "They run the best service. ... The airports could never live up to The Parking Spot's service."

But Parking Spot executives say they are still wary of D/FW Airport.

"I would say of the nine airports that The Parking Spot competes against, D/FW Airport is the most aggressive as far as competing against us," Wildman said.

D/FW executives said they're marketing their parking business like never before.

The airport estimates that 26 percent of all travelers who park off the airport property have never used D/FW Airport for parking.

Ahmad and his colleagues are trying to reach out to them.

This year the airport set up one of its Express Parking buses in front of Dallas Market Hall for a promotional event to raise awareness.

It was the first time the airport undertook a marketing campaign that was directly aimed at bringing in more parking, said Ken Buchanan, the airport's executive vice president of revenue management.

The airport is also running a promotion that started Monday and runs through Nov. 30 that allows people to park near the terminal for $9 a day rather than the normal $16.

Although price is a big factor for parkers, some still want convenience.

Through valet parking, Kenneth Kundmueller, president of Irving-based FreedomPark, is after those customers. He says there's plenty of time-crunched business travelers who don't want to hunt for a parking spot.

So, for $22 a day, he sends one of his valets out to D/FW to pick up a customer's car at the curb of the terminal. While it's got the car, FreedomPark can take care of a variety of needs, including carwashes, oil changes, gas fill-up and even maintenance on certain models.

Kundmueller tracks when the flight is coming back and sends a text message to the client telling him where to go for baggage claim. A valet is then waiting outside the baggage claim doors to hand over the keys.

FreedomPark has enough room for 700 cars in its warehouse near Royal Lane and 635. For a $2-a-day discount, there are 200 more spaces outside the warehouse.

His company gets new business through word of mouth and spends no money on advertising.

"There's a good niche in this high end," he said. "We stay heavily focused on the quality of our service."

Big profits

Parking represents the second-largest revenue source to D/FW. Trailing only airline landing fees, parking makes up 26 percent of the airport's total revenue.

It's also an increasingly profitable line of business. Parkers gave D/FW a $54 million profit in 2004, up from $43 million in 1995.

"I understand that the revenues generated by parking are huge at the airport, but [the airports] are going to have to realize they have to provide the service as well," said John Van Horn, editor and publisher of Parking Today, a Los Angeles-based monthly trade magazine. "The off-airport guys are marketing-oriented guys. It's a huge marketing ploy, and it works."

D/FW is trying to match and in one case beat the service off-airport operators offer.

In November 2002, the airport opened two outer lots and branded them as Express Parking. Express basically matches what The Parking Spot offers, with its bottled water, newspaper and luggage assistance and covered parking.

The airport is also considering some of the other extras offered by outside lots, including oil changes, carwashes and valet parking.

Ahmad even sees a day when you could drop off your clothes for the airport to have dry-cleaned while you are away.

"That stuff is in the future that we really would like to do," he said. "We want to be the best at what we do. We want to be the standard."

Fort Worth Star Telegram


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