IPI’S ASK THE EXPERTS
What’s your best strategy or tip for pricing parking for greatest efficiency and to balance availability and cost? Associate Director, Transportation Services Texas A&M University It would be nice to always be able to use economic theory to properly price parking, but we often find ourselves in political environments that will not allow it. We have had success by offering a selection of pricing options from which to choose so there is always a lower priced (less convenient) option available for customers. This has allowed us to gain acceptance for charging more for convenience, which helps balance demand and generate revenue.
Gregory A. Shumate
Senior Associate DESMAN Make sure the price-point differential between the available parking supply intended for short, moderate, and long-term parkers is substantial enough to motivate users to make parking choices based on their expected stay. Also, be sure to reinforce the pricing strategy with good regulatory signage, easy payment options, and an enforcement presence that is obvious and consistent.
Barbara Chance, PhD
President and CEO CHANCE Management Advisors Assuming you are dealing with a reasonable land use area, if you have a lot of empty spaces, your parking is priced too high (or is in the wrong place). If you have no empty spaces, your parking is priced too low. Forget generalized formulas about parking occupancy or esoteric ones about elasticity of demand. Get out in the field and analyze for yourself what is going on.
Jennifer Tougas, CAPP, PhD
Director, Parking and Transportation Western Kentucky University Conduct a survey that asks, “Would you be willing to pay $X for this product (what type of parking at what location, amenities, etc.)?” Select a range you are considering. For each person taking the survey, randomly assign the dollar figure they see. You can then run a regression analysis on the outcome (yes or no) that will show you what the market will bear for the product you describe. Works like a charm!
David Hill, CAPP CEO
Clayton Hill Associates Three steps: establish a price for peak use periods and for evenings and weekends and then adjust them seasonally; price each rate segment high enough that you generally have 10–15 percent availability and manage your price to always yield that result; and as a benchmark, your monthly surface lot price should be at least 30 percent greater than transit fare for that same period. If your price is lower than transit, you can remove some parking space or surrender it for development. If your price result is more than 30 percent greater than a transit pass, you should add some space.
Have a question for IPI’s experts? Send it to fernandez@parking.org and watch this space for answers!
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INTERNATIONAL PARKING INSTITUTE | JANUARY 2017
The opinions, beliefs, and thoughts expressed by the contributors do not necessarily reflect the opinions and viewpoints of the International Parking Institute or official policies of IPI.
Debbie Hoffmann