Automobile Parking

SIC 7521

Industry report:

This classification covers establishments primarily engaged in the temporary parking of automobiles, usually on an hourly, daily, or monthly contract or fee basis. Establishments primarily engaged in extended or dead storage of automobiles are classified in SIC 4226: Special Warehousing and Storage, Not Elsewhere Classified.

Industry Snapshot

The financial success of the automobile parking industry is tied to commercial real estate growth, such as a boom in new office buildings (and high occupancy rates within them) that requires more lots to house the cars of commuters, clients, and related service industries in the area. Because of the economic recession at the end of the first decade of the 2000s, the parking industry slowed in terms of construction of new sites as consumer spending decreased and sources of credit constricted significantly. In addition, the industry comprised a large number of companies, with few firms operating nationally and most firms operating locally or regionally. These small companies had difficulty withstanding the pressures related to a negative economy and became targets of mergers and acquisitions, which was the driving force behind the growth of the larger firms at the end of the first decade of the 2000s.

By beginning of the 2010s, things were looking up for many U.S. industries as the economy started to recover. In 2010 the U.S. Census Bureau reported that 12,554 establishments operated in the parking industry. Together these businesses employed 129,519 people who earned a total annual payroll of around $2.1 million. Parking lots and garages in the United States earned $8.3 billion in revenues in 2010.

Organization and Structure

Often, parking lot operators do not own the land on which their businesses sit. The operators primarily have fixed-fee management contracts with the real estate holder, which does not require an outlay of capital from the operator because 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. When 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., has a membership of more than 2,300 private and public parking professionals. The NPA organizes annual conventions and trade expositions and publishes Parking, a trade periodical. The NPA also lobbies for industry concerns and reports on its activities in periodic legislative updates and issue alerts. The NPA's Parking Consultants Council, formed in 1972, is 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 operates a foundation, the Parking Industry Institute, which awards scholarship to employees of member organizations and their families.

The International Parking Institute (IPI) was founded in 1962 to provide leadership, technical resources, and information to the parking profession and related fields. It has a company member base of more than 2,500. 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 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 5 million metered spaces. Approximately half of these spaces were owned by municipalities, and the rest were privately held.

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 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, California, Texas, Florida, Illinois, and Pennsylvania. Together they shared more than half the overall market.

According to the National Parking Association, the overall average monthly parking price for an unreserved space in 2008 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 ranged from $15 to $1,600 and averaged $713.24 for monthly parking. 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, while 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).

At the end of the first decade of the 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 in January 2008 when 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."

Technological changes were being adapted and adopted by the industry. For example, in 2009 the Ibn Battuta Mall in Dubai premiered the world's first automated parking facilities that were 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 central 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.

Current Conditions

According to IBISWorld, the parking lot and garage industry in the United States was worth $8 billion in 2011. The economic recession at the end of the first decade of the 2000s had a negative impact on the industry, as did rising fuel prices, as consumers looked for transportation besides driving. In addition, the IBISWorld 2010 report claimed that "an increase in unemployment, and decreases in disposable income and domestic flight miles have kept airport parking lots under capacity." Although growth would be aided by an increase in commercial construction in the 2010s, other factors, such as industry consolidation and enhanced technology, were expected to hamper employment.

One of the reactions of industry participants to the challenges of the early twenty-first century was to embrace the new technological changes. For example, Casey Jones, chairman of the International Parking Institute, acknowledged the use of automation in a May 2011 article in the Pittsburgh Post-Gazette, saying, "We're taking our cues from other industries. We understand that our customers demand it, want it." Automated features that were appearing in some parking lots and garages included machines that could accept payment from a cell phone (as well as call and remind the driver when the allotted time is almost up, then add time if requested); a license plate recognition program that could locate a lost car; and automated signs that indicate whether a lot is full and, if not, direct the driver to the nearest open space. A system developed by Boomerang Systems of Morristown, New Jersey, provides robots who park cars. According to the Pittsburgh Post-Gazette, "Drivers pull into an entrance-level stall, punch in some information and have their cars whisked away on wheeled, computer-controlled pallets that shuffle and arrange the parked cars in all of the garage's available floor space." Boomerang claims the system doubles a garage's capacity and removes the need for traditional ventilation systems, because the car engines are off. Although it can take up to four minutes for the robot to retrieve a car, drivers can call ahead--or use a smart phone app--so their car is ready when they arrive at the garage.

Industry Leaders

In the early 2010s, Central Parking Corporation, based in Nashville, Tennessee, was one of the largest parking lot operators in the United States. The company had 2,200 various parking facilities offering more than 1 million parking spaces in 40 states, as well as facilities in Canada, Europe, and Latin America. Central also offered shuttle transportation, valet parking, and parking meter enforcement and collection. Revenues of the privately held company that employed 14,000 workers reached $774 million in 2012. In 2012 Central's parent firm agreed to merge Central with Standard Parking, the company's chief rival.

Chicago-based Standard Parking Corp. managed and leased 2,200 paid parking facilities for airports, offices, hospitals, shopping centers, hotels, and universities in 340 cities in 2012, accounting for more than 1.2 million parking spaces. Standard reported revenues of around $730 million in 2011 while employing 11,914 people.

Another industry leader was ABM Systems Inc. of New York City. Through its Ampco division, the firm operated 1,800 parking facilities, most at airports, in 35 states.

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