Airport Parking is Flying High

December, 2019

The following article is excerpted from a longer piece by the authors. The entire article with backup graphics can be found in the online version of Parking Today December, 2019…log on to parkingtoday.com.

Gary Cudney recently co-authored an article titled, “Reclaim Your Revenue – TNCs are Impacting Your Airport’s Revenue Stream,” available at www.wginc.com/TNCimpact. After that article published, Ted Anglyn with Parking Property Advisors (PPA), contacted Gary and advised that PPA was also researching Transportation Network Companies’ (TNCs) impact on airports. PPA compiled data for 23 airports including total enplanements, parking rates, parking revenue, and total revenue.

Airports have adapted and actually increased parking and ground transportation revenue the past four years.

In addition, these airports’ annual reports were searched to understand the impact of TNCs, like Uber and Lyft, on the airports’ overall revenue streams. This article represents a collaborative effort to evaluate the data compiled by WGI and PPA, assessing the big picture while analyzing the “TNCs effect.”

Parking revenue data gathered and assessed by WGI and PPA confirm that airport parking is alive and mostly well, despite TNCs’ disruptive impact. 

The data illustrate that for 2018, parking revenue for the 23 studied airports was nearly $2 billion, up 13.6 percent from 2015 -- about when TNCs started to come on the scene -- and up 4.3 percent from 2017. Over the same four years, total enplanements grew by 11.4 percent and total operating revenue grew by 20.6 percent. It is very interesting that during this four-year period, the parking revenue for the 23 airports grew slightly faster than total enplanements. 

Even though parking revenue did drop as a percentage of total revenue (from 18.7 percent in 2015 to 17.6 percent in 2018 – down 6 percent), the revenue collected from TNC fees and greater enplanements increased during the four-year timeframe by 20.6 percent.  

The takeaway is that TNCs disrupted airports, causing congestion, fewer parking transactions in some cases, fewer rental car transactions, and reduced usage of taxi, shuttle, and limo services. Yet, airports adapted and actually increased parking and ground transportation revenue the past four years.

Not That Bad; In Fact, Pretty Good

Further supporting the idea that airport parking is healthier than some think, we were surprised to read in the airport annual reports how many of them recently built, or were building, new parking structures and rental car garages (CONRACS). Many are experiencing a growth in parking demand. John Glenn Columbus International Airport reported in its 2018 Certified Annual Financial Report that construction was approved for a, “$140 million consolidated rental-car facility to alleviate unprecedented demand on garage parking. 

Dale Denda with PMRC shared that the group’s recent reports include 35 airport parking structures, and CONRAC projects at 26 airports. Of the 35 airport projects, 22 are, “committed and proceeding with programming, predesign, design, and/or construction during the third quarter 2018 through the second quarter of 2019,” while the other 13 are reportedly potential future projects. 

Could It Be as Bad as It Looks for TNCs?

Uber lost $1.8 billion in 2018. In its 2019 second-quarter earnings report, Uber had a $5.2 billion quarterly loss, with $3.9 billion due to stock-based compensation that it paid employees after going public, and $1.3 billion due to operations. Uber also reported that it expected to lose up to $3.2 billion due to operations and $7.1 billion including the stock compensation for all of 2019. 

Uber also announced on July 29, 2019 that it was laying off one-third of its 1,200 marketing team members. As publicly traded companies, Uber and Lyft shareholders will presumably demand the firms become profitable, which likely means raising ride rates above their currently subsidized levels, not just cutting expenses and head counts. These anticipated price hikes would make riding a TNC to the airport more costly and likely result in a return of some travelers driving themselves -- and paying for parking.

Looking Ahead…

The airports evaluated for this article report overall parking and ground transportation revenue grew on a percent-difference basis slightly faster than total enplanements. This latest trend is partly fueled by the increase in revenue collected by the airports for TNC drop-off and pick-up fees. 

Airports have had to explore different management approaches to land-side operations, ranging from designating curbside space specifically for TNCs pick-ups and drop-offs to creating taxicab-like staging areas; geo-fencing terminal access roads to capture use, and then collect associated fees; creating drop-off and pick-up zones in parking structures away from terminal curbsides; to adding significant new directional and informational signage, zone creation, traffic management, security personnel, and law enforcement, and more, to fit each scenario and help future-proof airport parking revenue -- and continue positive customer experience.   

Gary Cudney can be reached at:
Gary.Cudney@WGInc.com.