Automobile Parking

Industry Snapshot

According to a 2009 Dun & Bradstreet report, the automobile parking industry was valued at $4.38 billion in 2008, generated by 5,649 establishments that employed approximately 68,250, the majority of which were parking lot attendants and cashiers. Other positions included enforcement officers, maintenance personnel, office personnel, and information managers. The financial success of the automobile parking industry is tied to commercial real estate growth--a boom in new office buildings (and high occupancy rates within them) requires more lots to house the cars of commuters, clients, and related service industries in the area.

Because of the economic recession of the late 2000s, the parking industry slowed in terms of construction of new sites as consumer spending decreased and sources of credit constricted significantly. However, the industry was comprised of a large number of players, with few firms operating nationally and most firms operating locally or regionally. These smaller companies may have difficulty withstanding the pressures related to a negative economy and thus become targets of mergers and acquisitions, which is how the larger firms fueled much of their growth in the late 2000s. Further mergers and acquisitions were expected within the industry.

Organization and Structure

Often, parking lot operators do not own the land on which their businesses sit. Arrangements with the real estate holder are primarily of the fixed-fee management contract type, which does not require an outlay of capital from the operator; the parking company simply contracts to run a parking lot on the land and collects a percentage of the parking revenues. Fixed-fee management contracts usually run one to three years. In another, less common type of contract, known as a lease arrangement, contracts run three times longer but provide a greater profit potential. In leasing a lot, parking-lot operators are required to invest their own capital in the expansion or improvement of the lot, but they receive a greater share of the profits.

The National Parking Association (NPA), founded in 1951 and based in Washington, D.C., had a membership of more than 1,000 private and public parking professionals. The association organized annual conventions and trade expositions, and published Parking, a trade periodical. The NPA also lobbied for industry concerns and reported on its activities in periodic Legislative Updates and Issue Alerts. The NPA's Parking Consultants Council, formed in 1972, was a professional and technical advice group within the association concerned with design issues, economic analysis, financial counseling, and analysis and maintenance of off-street parking facilities. The NPA also operated a foundation, the Parking Industry Institute, which granted scholarship awards to employees of member organizations and their families.

The International Parking Institute (IPI) was founded in 1962. It has a company member base of more than 1,300. Its mission is to provide leadership, technical resources, and information to the parking profession and related fields. The IPI provides professional training, holds an annual conference and publishes a monthly magazine called The Parking Professional, among other services and activities.

Background and Development

The growth of the parking industry has coincided logically with the growth of the automobile industry. According to the International Parking Institute, the first parking garage was built of timber in 1909 in Columbus, Ohio. In 1912, the city of Chicago developed municipal parking lots in an effort to relieve the heavy downtown traffic congestion. The first parking meter was put in place in 1935 in Oklahoma City. Over the years, the number of off-street and on-street parking spaces and facilities grew rapidly in response to the popularity of the automobile and the development of public roadways. Parking equipment also became more sophisticated, including automated gates and machines that accept money, calculate fees, and print tickets with and without the aid of an attendant.

The International Parking Institute reported that there were roughly 105.2 million parking spaces in 2006, with a 2 to 1 ratio of off-street to on-street parking, and up to five million metered spaces. Approximately half were owned by municipalities, and the rest were privately held.

Current Conditions

Since the September 11, 2001, terrorist attacks on the United States, parking lot operators, especially at airports, have had to be vigilant when it comes to safety. An article released in the June 2004 issue of The Parking Professional stated that "as airports have had to face new service and safety challenges, so too have their parking facilities." In 2008, the average parking structure garnered $1.1 million in revenue and employed about 13 people. Automobile parking was the largest industry sector, followed by parking lots, parking garages, and outdoor parking services and parking structures. States with the majority of parking establishments were New York with 1,091, California with 790, Texas with 321, Florida with 290, Illinois with 237, and Pennsylvania with 232. Together they shared more than half the overall market.

According to the 2008 survey Parking in America, conducted by the National Parking Association, the overall average monthly parking price for an unreserved space was over $125.55, while reserved spaces averaged $183.74. In a central business district facility, unreserved monthly rates were between $10 and $800 and averaged $118.90. Reserved facilities in central business districts' monthly parking ranged from $15 to $1,500 and averaged $173.24. Twelve-hour daily weekday parking in a central business district facility ranged from $0.50 to $60, averaging $12.51. Fees for 24-hour parking at a hotel parking facility ranged from $6 to $80 and averaged $23.10. First-hour parking at a hospital facility within a central business district averaged $4.41; outside a central business district, first-hour fees averaged $2.98. Based on monthly unreserved parking rates, the most expensive cities for parking were New York ($478.75); Boston ($426.75); Honolulu ($388.50); San Francisco ($338.75); Ventura, California ($325.00); Brooklyn ($300.00); Philadelphia ($279.00); and Chicago ($269.00).

In the late 2000s, the parking industry continued to battle a public image problem as the press released consumer-interest stories on the many facets of congested city parking--from lack of parking and high rates to hard to navigate parking garages and a multitude of parking regulations and violations. Philadelphia was particularly hard hit when, in January 2008, television network A&E debuted Parking Wars, which chronicled the daily on-the-job experiences of employees of the Philadelphia Parking Authority. The Philadelphia Inquirer called the show an "unmitigated flop,"

On the technology front, the Ibn Battuta Mall in Dubai premiered the world's first automated parking facilities in 2009, capable of housing 765 vehicles. The automated lot allowed the driver to drive into the entry station, where the vehicle is picked up by a computerized lift and shelved inside the building. When the consumer is ready to leave, the car is returned to the centralized auto recovery station. The automated parking alleviates the need for consumers to travel through the parking garage, which can be unsafe. It also saves space as the facility can "stack" vehicles.

Industry Leaders

In 2006, Central Parking Corporation was the largest parking lot operator in the United States. Central oversees 2,500 various parking facilities offering more than 1.2 billion parking spaces. Central also had parking facilities in Canada, Europe, and Latin America. The company also offers shuttle transportation, valet parking, and parking meter enforcement and collection. Revenues of the privately held company reached $1.21 billion in 2008 and employed 18,000.

Standard Parking manages and leases 2,200 paid parking facilities for airports, offices, hospitals, shopping centers, hotels, and universities throughout 330 cities. It manages over 1 million parking spaces. Standard garnered revenues of $700 million in 2008, while employing 13,320 people.