Airport Parking Pricing Strategies (2022)

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1   This report is intended to assist airport staff and others responsible for setting parking rates by informing them of rate-making strategies commonly used at other U.S. airports. The report provides information airport staff and others require to select and to implement a rate-making strategy that serves the airport’s needs. The rate-making strategies and other information described in this report were gathered through a comprehensive literature review and in-depth surveys of the staff directly respon- sible for parking operations and parking rates at 30 participating airports. The participating airports range in size from large hubs such as Denver International Airport (DEN) to non-hubs such as Monterey Regional Airport (MRY), and the airports represent all nine FAA regions. While these airports provide a wide range of parking products, all provide a combina- tion of close-in (or daily or a combination of hourly and daily) and economy parking facilities. The size of their parking facilities ranged from DEN’s 44,285 spaces to MRY’s 455 spaces. Their 2019 annual parking revenues varied from Dallas/Fort Worth Inter- national’s $181.5 million to Cherry Capital’s (Traverse City) $1.3 million. The reported revenues per originating passenger varied from $3.66 at Albuquerque International to over $15.00 at Harrisburg International. Parking is important for airports. Public parking is a fundamental component of every commercial service airport regardless of the number of passengers served, availability of public transit, or location of the airport. This is because most airline passengers and visi- tors (over 70% at most airports) use private vehicles to access the airport and those who do expect to be able to park their vehicles at the airport. Moreover, public parking is an important contributor to an airport’s finances and revenues, frequently generating more than 40% of the non-aeronautical revenues and representing the largest source of non-aeronautical revenues at most airports. Most airports have similar goals. Despite their differences, research shows that most airports—including those surveyed—have similar goals. They seek to • Provide superior customer service, • Improve operational efficiencies, and • Enhance parking revenues. While airports share common goals, the management place differing degrees of emphasis on each of these goals. Some airports’ management emphasize customer service to the pos- sible detriment of revenues. Other airports’ management emphasize efficient operations to the possible detriment of customer service. The data suggest no airport attempts to balance all three goals equally. S U M M A R Y Airport Parking Pricing Strategies

2 Airport Parking Pricing Strategies Most of the airport staff surveyed indicated that increasing airport revenues and enhancing customer experience were the primary goals of airport management relative to parking pricing. Some large-hub airport staff identified offering good customer experience as the main driver of their parking-pricing strategies. Indeed, staff indicated that parking prices are adjusted to manage and balance demand between the different facilities. There are potential strategies that respond to goals of airport management. Potential parking rate strategies that respond to most airports’ goals described are as follows. These strategies are discussed in greater detail in the report: Strategies can enhance parking revenues by • Increasing the cost of parking for 24 hours or more (i.e., the daily rate); • Reducing the daily rate in close-in facilities to attract customers who would otherwise park in less expensive and less convenient facilities; • Increasing the cost of parking for each hourly increment up to the daily maximum rate, causing the daily maximum rate to be triggered by shorter stays and avoiding modifying the more visible daily rate; • Reducing the time increments while maintaining the applicable rate (e.g., $2.00 per 20 min- utes rather than $2.00 per 30 minutes); • Offering discounts to customers parking for long durations (e.g., 7 days or more); • Offering discounts to customers making advance reservations; and • Offering discounts to major employers or frequent parkers. Strategies can improve customer service by • Assuring the availability of spaces for customers dropping off or picking up passengers, • Offering free parking for the first 30 minutes (or other time increment), and • Assuring space availability. Strategies can improve parking operations by • Charging whole dollar amounts, • Promoting the use of credit cards, and • Including local tax in the parking rate.