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This chapter provides an overview of how to document the relevant goals of airport management and the metrics that can be used to evaluate the performance of potential parking strategies. Evaluation of a Parking Strategy Begins with Management Goals When identifying and evaluating potential parking strategies, it is beneficial to confirm and define the relevant goals of airport management prior to implementation. The goals for each airport are unique and reflect managementâs vision for the airport, its mission statement, and its specific values. To achieve these goals, management may have a strategy or long-term plan of action consisting of new parking products, services, or supporting technologies (see Figure 2.1). The following three parking-related goals are frequently cited by airport managers: â¢ Provide a high level of customer service for the traveling public and employees. â¢ Improve operational efficiency by reducing the costs of parking operations while maintaining or improving customer service and safety, and enhancing revenues. â¢ Enhance net parking revenues, consistent with achieving airport managementâs other goals. Each airport operator places different emphasis on these three goals (and subsets of these goals), reflecting the unique characteristics of the airport, the degree of competition (or partnership) with off-airport (private) parking operators, the adequacy of available parking facilities, the interval before the next required parking facility expansion, and other factors. Few operators seek an equal balance among these three goals (i.e., a point in the exact center of the triangle in Figure 2.2), with most operators leaning toward one goal or another. For example, some airport operators prefer to forego potential revenues to provide improved customer service (e.g., provide a high proportion of close-in, covered parking spaces), while other operators choose to enhance net revenues by avoiding or postponing capital costs (e.g., deferring construction of structured parking and, instead, expanding surface lots that are distant but within walking distance of the terminal), and some seek to improve efficiency at the expense of both customer service and revenues. Confirming and Documenting Relevant Management Goals and Objectives The airport operator should have a clear idea of its short- and long-term goals and objectives for the parking program to guide its selection of parking strategies. Furthermore, it is impera- tive that these goals and objectives are consistent with the overall goals and objectives of the organization. With an established foundation of goals and objectives, the airport operator can 5 C H A P T E R 2 Documenting the Goals of Airport Management
then determine the technologies and level of investment necessary to implement strategies that support these goals and objectives, and the types of data that must be collected to measure progress. Numerous departments or divisions within an airport organization are affected by, or influ- ence, parking operations. Included are airport operations, finance, properties and concessions, facility maintenance, planning and engineering, information technology (IT), environmental, construction, accounting/audit, public relations, and security/police. These relationships should be considered when identifying and evaluating parking strategies to assure that they support the overall goals and objectives of airport management. It is recommended that representatives from all departments that are affected by, or influence, the parking program be involved in the development and prioritization of goals and objectives. By considering the range of needs and constraints, tradeoffs that achieve the best possible outcome can be developed. Parking strategies reviewed in this research project were grouped according to the three goals important to airport operators. Many of the strategies will add value in achieving one or more air- port operator goals to (1) improve customer service, (2) reduce operating costs, and (3) enhance parking revenue. If the operator has not already defined and documented its goals and objectives for the parking program, these three goals can serve as a starting point for the development of potential goals and objectives. Providing customers with a safe and secure environment is another overarching goal that, although addressed separately, influences parking operations and customer service. Strategies selected in support of the goals and objectives will depend on the relative level of importance placed on each goal identified by the airport operator, as well as any constraints. 6 Guidebook for Evaluating Airport Parking Strategies and Supporting Technologies Figure 2.1. Typical management process. Figure 2.2. Parking-related goals.
The airport operator has many issues to consider when developing and prioritizing goals, objec- tives, and supporting strategies for its parking program, including the following: â¢ Expected change in origin and destination (O&D) airline passenger volumes (O&D passengers are those beginning and ending their journeys at the airport); â¢ Estimated future parking requirements by type of product; â¢ Available parking spaces by type of product; â¢ Net revenue projections in relation to revenue needs for the organization; â¢ Funding considerations/constraints; â¢ Relationship of parking provided by the airport operator and that provided by private operators, including â Supply, â Market share versus desired market share, â Products offered, and â Parking rates; â¢ Willingness to use airport resources to market the airportâs parking facilities; â¢ Targeted customers and their demographics; â¢ Interaction between the location and operation of the airportâs public and employee parking facilities, if any; â¢ Airport development plans/capital program; â¢ Airport roadway and, particularly, curbside capacities; â¢ Environmental implications; and â¢ Airport development and land use plans, including the availability of land for parking. Developing Metrics to Evaluate the Performance of Selected Parking Strategies Metrics are important for measuring progress toward achieving goals and for determining the most effective parking strategies. Metrics are useful for providing updates to management, jus- tifying or discontinuing investment in certain strategies, planning, and program monitoring and improvement. It is important to develop a baseline from which to compare the selected metrics. To establish the baseline, an airport operator can collect and analyze âbeforeâ data either by selecting a time period for analysis of existing data or collecting new data. Progress can be measured based on improvements over a subsequent time period or over similar periods by year. Progress may also be measured by evaluating performance compared to a future target. Metrics selected will depend on what the airport operator is trying to achieve and the resources it allocates for performance mon- itoring. The following examples are some of the more commonly used parking-related metrics to monitor and track parking revenues, facility utilization, customer service, operations, and other aspects of public parking: â¢ Revenues and net revenues â Revenue, operating cost, and net revenue per space overall; â Revenue, operating cost, and net revenue per space, by parking product; â Revenue per transaction, by parking product; and â Revenue per airline passenger. â¢ Facility use â Daily peak-period spaces occupied (i.e., peak use), by parking product (if available); â Daily overnight spaces occupied, by parking product; â Percent occupancy or relative occupancy by parking product; â Average length of stay, or length of stay distribution; Documenting the Goals of Airport Management 7
â Hourly, daily, or monthly number of transactions by facility or parking category; and â Available spaces by parking product (e.g., during a construction project that will cause a temporary loss or displacement of spaces). â¢ Customer service â Customer complaints by number of exits or by time period; â Customer satisfaction measures, such as the use of mystery parkers; â Customer delays at entry or exit during peak periods (or frequency of delays exceeding a specified goal); and â Average processing time or distribution of processing times at the entry or exit plazas. â¢ Payment methods â Non-revenue exits by facility; â Percent of exits paid by credit card, using pay-on-foot stations, using access cards, or using other payment methods; â Percent of unpaid and/or exception transactions; and â Use of validations. â¢ Operations and operating costs â Personnel (or staff hours) per 1,000 transactions and â Expenses as a percentage of gross revenues. â¢ Planning and marketing â Parking spaces per resident O&D passenger; â Airportâs share of the parking customer market; â Share of passengers choosing to park versus those being picked up and dropped off; and â Number of occurrences when the demand exceeds the available spaces (e.g., a facility is closed) and when overflow or holiday parking facilities are used. The airport operator may also wish to compare (benchmark) its metrics with those of other airports with similar characteristics, with the metrics of privately operated off-airport parking facilities, or the metrics of non-airport parking facilities or programs. The metrics should be developed to allow for fair comparisons, considering the metrics developed for the private facil- ities or programs of interest, and the frequency with which they are updated. Benchmarking As applied to airport parking, benchmarking is the process of comparing the fees, number of spaces, types of products and services, revenues, operational practices, and other aspects of an airportâs parking operations with those at other airports. Benchmarking helps airport operators understand how their parking operations rank or compare in relation to a particular indicator or metric. Benchmarking can also be used when seeking the approval of senior management by increasing managementâs awareness of the operations and facilities at other âpeerâ airports. The metrics used for such comparisons (e.g., parking rates or spaces) are usually simpler than those described in the previous paragraphs. Benchmarking analyses are most commonly conducted by comparing an airport with its peer airports. Typically, peer airports are selected considering the following: â¢ Passenger volume. Airport management frequently compares its airport with airports of sim- ilar size. Ideally, size is defined in terms of the number of annual O&D airline passengers, since these passengers are the customers for parking products. Since most medium- or small-hub airports serve few connecting passengers, comparable airports can be identified using the num- ber of enplaned or deplaned passengers. Many large-hub airports, however, serve as hubs for a major airline and therefore have a large number of connecting passengers. When identifying 8 Guidebook for Evaluating Airport Parking Strategies and Supporting Technologies
comparable airports for purposes of benchmarking parking statistics, connecting passenger numbers should not be considered. The number of annual enplaned passengers is readily available from such sources as (1) Air- ports Council InternationalâNorth America and (2) the Federal Aviation Administration (FAA) Compliance Activity Tracking System (CATS) 400 database (see Report 127 at http://cats.airports.faa.gov/reports/reports.cfm) for passenger and revenue data. A good source for originating and terminating airline passenger volumes is the U.S. Department of Transportationâs Research and Innovative Technology Administration (RITA) Bureau of Transportation Statistics. â¢ Proximity. Airport operators (and their governing boards or commissions) frequently com- pare their operations with those of nearby airports, particularly those of a similar size. Nearby airports are likely to have customers with similar costs of living and price sensitivities and to experience similar weather conditions influencing passenger preferences for covered parking and operating costs (e.g., costs for snow removal). â¢ Airlines. The operators of airports, particularly those serving as connecting hubs, often com- pare their airports with other airports that have the same dominant airline (e.g., Minneapolis- St. Paul International and Detroit Metropolitan Wayne County airports, both of which serve as hubs for Delta Air Lines). â¢ Extent of privately operated off-airport parking. Airports in areas where there is little, if any, off-airport parking will require more parking spaces and thereby generate more revenues per passenger and in total than comparatively sized airports in areas where there are many off- airport parking spaces. â¢ Passenger demographics. Selecting airports that accommodate passengers with a similar mix of trip purpose and place of residence may be helpful. For example, airports serving destina- tion resorts and comparatively few local residents who park for long durations (e.g., Honolulu, Las Vegasâ McCarran, and Orlando International Airports) will have different parking char- acteristics than airports serving a high proportion of local resident business travelers (e.g., LaGuardia, Mineta San Jose International, and Reagan Washington National Airports). The operators of airports serving comparatively few local residents may be reluctant to increase parking rates that would affect local residents, preferring to generate revenues from services offered to non-residents. â¢ Use of public transportation. The parking characteristics of airports with high passenger use of public transit (i.e., more than 10%) will differ from the parking characteristics of airports with lower passenger use of public transit. Some other factors to consider when conducting a parking-related benchmarking analysis include the following: â¢ Definition of the product. The type of product defined as short-duration parking or economy parking varies from airport to airport. When conducting a benchmarking analysis of parking rates by product, it is necessary to confirm that similar products are being compared. â¢ Local taxes. Some states and municipalities tax the airport parking fees paid by customers. The parking rates published by most airports include the costs of such taxes, while the rates pub- lished by many privately operated parking facilities exclude taxes. When gathering reported parking revenues from airports, it is necessary to determine whether the reported gross revenues include taxes collected. â¢ Airline agreements. At airports with âresidualâ agreements, higher parking revenues are transferred to the airlines in the form of lower airline rates and charges, which result in no net gain to the airport enterprise, except the positive aspect of lower airline costs. At airports with âcompensatoryâ agreements, typically parking revenues are not transferred to the airlines. Therefore, the extent of the benefits resulting from increased parking revenues may vary depending on the type and specifics of the airport operatorâs agreement with the airlines. Documenting the Goals of Airport Management 9