How to increase your parking revenue by 457%

Are you also concerned about the profitability of your parking business? Does it feel like it takes more than it gives? That's not how it should be. And it doesn't have to either. There are many smart things one can do to make their parking go from hassle to cash cow. For example, we have a perfect example of how you who own or manage parking assets can increase your income with three simple tricks:

1. Minimized Vacancies
2. Market pricing
3. Classification of parking spaces

Does that sound too good to be true? All the figures and examples in this article are actually taken from a real case that we worked on a couple of years ago - a parking facility in Stockholm. So it is not at all impossible that you, too, can increase your parking revenue by 457%!

Starting point: reserved seats with monthly rent

As a starting point, we have an ordinary parking facility: 51 spaces are rented as reserved spaces with monthly rent. Vacancy rate is high - 52.9 percent - which is also common when you are not actively working with your parking. So what can be done to increase revenue from this plant?

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Solution #1: Minimize Vacancy

Perhaps what is closest at hand in a facility with a high vacancy rate is to start right there. Everything else being equal for our Stockholm facility would revenue could increase by 112 percent, just by filling existing vacancies. This means an increase in revenue from SEK 237,600 to SEK 504,900 per year. It's a good “bang for the buck”, you might say.

3 ways to reduce vacancy rates

1. Post vacancies on a digital queue page where potential parking customers can register their interest
2. Promote your queue side both within and outside your existing customer group
3. Automate queue management and filling with a system that automatically matches expressions of interest against vacant positions

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Solution #2: Market Pricing

If you want to add another gear, you can raise that income level a good bit more with fairly small funds. Then you need to take a look at their pricing. In this facility, all seats were originally rented out at the same monthly rent, 825 SEK.

However, some of the sites had a better location, were slightly larger and stood on paved ground, while the other sites were located on a gravel pitch a little further away. So it is quite natural to make a simple classification with market pricing:

• Reserved parking “normal”: 1000 SEK/month
• Reserved parking “normal plus”: 1400 SEK/month

The potential revenue increase here then lands at 688 800 SEK/year, which is an increase of 189%.

“One is willing to pay for premium if it is packaged as premium”

— Pelle Sjögren, Mobility46

But won't tenants be angered by the price hike?

We have several customers who have developed their parking business in exactly this way. For example, a large property owner who reclassified and raised prices in the best places by over 100%. Of course, they were properly nervous about the launch, but all the most expensive seats ended up being eaten first.

Therefore, a customer does not have to think that a price increase is wrong. Most of us are willing to pay for premium if it is packaged as premium. In the case of this property owner, they doubled their income only by creating structure and order, classifying the locations and pricing correctly. In addition, all the tenants were satisfied, as they had the opportunity to choose for themselves a parking form and price level that suited them.

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Solution #3: classification and expanded service offerings

The third solution is the most sophisticated. It is also the one that will provide you with the most satisfied customers and the biggest revenue increase. Here you take a holistic approach to your parking based on their needs:

1. Look at the demand for parking and parking services in and around the property
2. Create a classification of your parking spaces to match demand
3. Optimize utilization by, among other things, converting reserved parking spaces into unreserved parking spaces
4. Future-proof the deal by offering electric car charging and expanded services such as car and bike pools

In our Stockholm facility they did this...

From renting out 51 places to a monthly rent of SEK 825/piece, we created a differentiated offer with more options:

• Reserved monthly parking “premium” 7 places: 1400 SEK/month
• Unreserved parking (daytime) 19 spaces: 1000 SEK/month
• Unreserved parking (evening/weekend) 19 places: 800 SEK/month
• Reserved electric car charging points 3.7 kW, 13 seats: 1400 SEK + 500 SEK charge plan/month
• Visitor parking, 7 spaces: SEK 30/h (based on 20% occupancy)
• Public charging station (2x11 kW): 50 SEK/h (calculated on 15% utilization)
• Car pool, 3 seats
• Cycling pool

In total, this generated an annual revenue of SEK 1,323,720, which was an increase of 457% compared to baseline.

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It doesn't have to be difficult to develop your parking business

The bottom line is that there is a lot you can do to develop and future-proof your parking business, without swallowing the whole camel at once.

Our main advice to those of you who are thinking about these things is: do not take water over your head, but rather take it step by step and start at a level that suits you. Already, by starting to think about your parking, you have come a long way!

Look at where you want to go, where you are now, and what feels easiest or most fun to start with. Maybe it's the pricing, maybe electric car charging or the unreserved parking.

Once you have landed there, there is so much exciting you can do to develop the parking business over time. You can look at overcrowding, service identification and camera-based visitor parking. But those are the themes of other blog posts and other conversations.

That's how long we'll stay here. But if you feel like talking further, we are always here for you — just a click away!