Tag Archives: smarking

Member News: Smarking Releases The Significant Cost of Free Parking: Learnings from the City of Santa Monica

The Significant Cost of Free Parking: Learnings from the City of Santa Monica

The City of Santa Monica Tests the Impact of Free Parking During the Holiday Season


Amid COVID-19, municipalities and businesses across the country were facing a 50-70% drop in commuter parking activity and visitation. This severely impacted the economic activity in the area and local businesses.

As the City of Santa Monica was entering the holiday season, the city was looking for a way to stimulate economic activity and to increase visitation in the downtown area through the use of parking incentives for prospective visitors.

In December 2020, the City of Santa Monica decided to test the impact of free parking on economic activity in downtown.

 Their goal was to alleviate any financial barriers for residents and visitors to shop in the area. Their Parking Operations Team was asked to participate in a program to encourage visitor traffic by selectively offering extended free parking at several downtown parking facilities.  To test this, the city kept their gates active and each visitor was required to pull a ticket for entry and return upon exit, Allowing the collection of  occupancy and duration data throughout the program’s period, as well as to measure the effectiveness of offering free parking to promote visitation.

The City of Santa Monica’s Top Priorities:

  • Residents and visitor’s satisfaction: Improve parkers experience and increase visitation
  • Support local businesses: Stimulate economic activity by removing financial barriers
  • Enable Data-Driven Policy Decisions: Leverage the results to support policy decisions

The Holiday Parking Program:

  • Free parking was enabled at parking structures 1-6 and paid parking was maintained at structures 7-8 to see if parkers shift to take advantage of the offer
  • The impact of the program was continuously tracked through Smarking’s business intelligence and measured by Smarking’s team
  • The program was active between December 10th and December 25th

Did Free Parking Increase Visitation or Did Parkers Just Shift from Paid Lots?

To determine whether the program encouraged visitation, Smarking performed a year-over-year (YoY)  transaction analysis. Jannette Choi, Account and Customer Success Manager at Smarking, analyzed the transactions in structures 1-6 to assess if the increase was due to a decline at the paid structures, 7-8. The results indicated:

  • There was insignificant change in YoY loss in transactions from Dec 10- 22
  • Between Dec 23-25, parking structures 1-6 suffered a YoY loss in transactions of 64.94%, while Parking Structures 7-8 observed a loss of 55.36%

This indicates that the program did not encourage parkers to shift from paid to free garages. Parker behavior may be driven by accessibility to the amenities by the parking facility and less so on the benefit of free parking.

“Free parking devalues the inventory. Parkers are more location sensitive than price sensitive. Paid parking helps to manage the supply and to maintain effective turnover for nearby businesses. When merchants say that there isn’t enough parking, that it’s always full, re-evaluate your rates to create turnover.”  – Henry Servin, Parking Manager at the City of Santa Monica

Download the full report here. 

The City of Santa Monica has followed the recommendations and is reinstated paid parking for all lots. To learn more about the City of Santa Monica’s parking programs, visit https://www.santamonica.gov/

City of Santa Monica and Smarking Partnership

Since 2017, the City of Santa Monica and Smarking have partnered to enable data-driven policies that serve visitors and residents. See more of our work together:

Member News: Driving with Data: Parking Leaders Accelerate Recovery During COVID-19

Driving with Data: Parking Leaders Accelerate Recovery During COVID-19

While COVID-19 has caused massive disruption across many industries such as restaurants, events, hospitality, airline & travel – parking underlies them all. With a 90%+ decrease of parking demand immediately following the shelter-in-place order, it’s one of the hardest hit industries in the U.S. Parking facilitates the daily needs of 100MM+ commuters across the U.S., making it one of the most important urban mobility infrastructures.

At commercial properties, parking contributes 5-10% of revenue on average and offers an opportunity to help recover revenue loss from core offerings that have been disrupted during the pandemic.

However, parking is largely overlooked due to the misconception that the cost of parking management and the revenue opportunity is static. With the right strategies in place, parking can be a dynamic tool to curb expenses and recover revenue loss.

Overall, the parking industry contributes to the US economy by directly employing 581,000+ individuals and generating $131B+ in annual revenue*. It plays an important role in the recovery process of the economy.

Prevent Further Revenue Loss with Data-Driven Goals

Like many real estate owners, Macerich was faced with the challenge of reforecasting revenue and parking budget in a post COVID-19 world.

Given the uncertainty with shelter-in-place restrictions, it’s an extremely difficult task. Rodolfo Pena, Asset Manager, Parking Strategy & Operations at Macerich, partnered with Smarking to get the data he needed for the upcoming budget cycle. Smarking generated a revenue forecast model based on both the historical data of the parking locations and revenue modeling.

This dynamic model provided Rodolfo with data-driven revenue projections for various recovery scenarios, preventing potential revenue loss by setting the right goals at the forefront. This model served as a baseline to decide on the final revenue budget goals together with their parking operators.

Smarking’s free professional services saved Macerich weeks of time that would have been spent on aggregating raw data and creating dynamic revenue models. Additionally, this data-driven approach served as a neutral and objective approach for all parties.

Access to real-time, centralized data is the first step in extracting key insights. Without this foundation in place, data can be difficult and time-consuming to collect, expensive to store, and complicated to analyze.

Staffing Allocation with a Demand-Based Approach

It’s going to take time to get back to pre-COVID demand levels. Without reliable, timely insight into demand, it’s challenging to determine the right amount of staff needed. Real-time parking data provides the insight needed to update staffing allocation and adapt as demand fluctuates to avoid overstaffing.

With Smarking, staffing allocation is a data-driven and demand based approach that enables cost savings for landlords and more efficient management of each unique location.

In June, a leading parking operator in Chicago partnered with Smarking to update staffing allocation. Smarking used the location’s historical demand data to project future staffing needs, saving landlords about $50,000 per location, without compromising visitors’ needs. The additional visibility into real-time occupancy also allowed parking managers to safely monitor all of their garages without physically visiting them.

With this digital capability, parking managers can now effectively monitor and manage more locations at a time, safely and remotely.

Even after parking demand has recovered, parking operators can continue to control staffing expenses and operate more efficiently. This cost-saving, data-driven strategy differentiates operators to real estate owners and provides a competitive advantage.

If you’re interested in learning more about recovery strategies and opportunities to streamline parking operations, schedule a free consultation with our team or give us a call at 415-483-2587. For a limited time, we’re providing a free 3-month trial of our industry leading Business Intelligence platform and AYM solution to help kick start recovery in the parking industry.

About Smarking

The leading Business Intelligence and Yield Management solution in North America, powering 2,000+ locations. Smarking specializes in turning transaction-level parking data into powerful, actionable insights. Partnered with real estate leaders including J.P. Morgan, Macerich, Unico, and Brookfield Properties. Learn more about Smarking’s solutions for Commercial Real Estate Owners.

Member News: Data-driven parking management strategies to curb expenses and kickstart recovery.

See how municipalities have partnered with Smarking to navigate through the COVID-era.

While COVID-19 has caused massive disruption across many industries such as restaurants, events, hospitality, airline & travel – parking underlies them all. With a 90%+ decrease of parking demand immediately following the shelter-in-place order, it’s one of the hardest hit industries in the U.S.

For cities, parking is the foundation of municipal economic activity and is a critical resource for employees, first responders, parents, senior citizens, and more. Parking related revenue contributes up to 30% of a city’s overall budget and can fund various community initiatives.

However, it’s largely overlooked due to the misconception that parking revenue is static. But with the right strategies in place, parking can be a dynamic tool to curb expenses and recover revenue loss. For cities, it’s more than revenue- paid parking is needed to manage traffic, reduce congestion, and increase customer turnover for nearby businesses.

1 – Reinstate Paid Parking to Keep the City Funded and Safely Running

For cities, paid parking can be tricky during an economic downturn. While parking revenue plays a key role in funding various city programs, it’s a balancing act to manage revenue needs to keep the city running and the community’s perception of the city.

“Providing ‘free parking’, as Dr. Shoup has taught us, is not really free. You still need to put the lights on, have to make sure that the public restrooms work, provide your ambassadors, your machines, cleanliness, etc. And there’s an induced cost. The last thing I want to do is offer free parking with no lights on and then discover that service workers are now exposed to dangers we hadn’t anticipated. We need to let people know we can be flexible, but it’s not free.” – Henry Servin, Parking Manager at the City of Santa Monica, CA

In the City of Santa Rosa, city leaders halted paid parking in April due to the COVID-19 shutdown. Gradually, unhoused residents began to camp out in surface lots, employees monopolized prime on-street parking, congestion in the downtown core was growing, and revenue loss was significant. The City of Santa Rosa needed to prepare to reinstate paid parking to manage these issues and help the community. To do this, the city first needed to understand the impact of rate changes on revenue and parkers’ behavior.

The city slowly started to re-open in early May but there were still many shelter-in-place restrictions. This caused hesitation that paid parking would cause pushback for business districts that were focused on regaining customers. But by June 8th, their real-time data feed showed that occupancy was back up to 85% in their core district- providing a strong indicator that it was time to reinstate paid parking and now needed to determine the appropriate rates.

Kim Nadeau, Parking Division Manager of the City of Santa Rosa partnered with Jannette Choi, Customer Success Manager at Smarking, to project demand and revenue with new rates. Given the unprecedented nature of COVID-19, historical data alone isn’t sufficient for projections. With Smarking’s Business Intelligence (BI) software, Jannette generated a revenue forecast model using the city’s historical parking data and combined it with her own unique revenue modeling based on various recovery scenarios.

The data-driven revenue projections for various recovery scenarios serve as a baseline to decide on the final revenue budget goal with the City Council. Kim presented the reforecasted revenue to the City Council, and they approved resumption of paid parking effective July 2020.

By leading with a data-backed analysis that assesses the viability and effects of rate and operational changes to Council, the city passed the policy. This will prevent further revenue loss, help to improve access to prime parking spaces, and support the downtown economy.

2 – Restructure Parking Rates to Manage Congestion and Enable Accessibility

Parking rates are a powerful tool to control demand. When demand is high, rates can increase and capture the revenue opportunity while also controlling occupancy levels. When demand is low, rates can decrease at a more competitive level to create additional demand, be more accessible in designated areas, and help reduce and manage congestion.

One city on the West Coast was looking to restructure the rates at three of their garages and needed to determine what the new rates should be.

Using the city’s historical data, the Smarking team was able to analyze revenue from 2017-2019. The transaction-level data allowed the team to quickly generate granular reports that showed the revenue change per year given transactions per price tier and duration.

With this data, the city was able to perform an analysis and easily segment split the data as needed and avoided manual data aggregation- saving hours of time. Given the capacity limits at each garage, not only was it necessary to restructure the rates, but an increase was also needed in order to control occupancy levels and encourage turnover for nearby businesses.

This was evident through the longer parking durations at the lower rates and the high peak daily occupancy patterns in the past few months. The city now has the analyses prepared to share with Council and determine the rate changes for FY 2020.

3 – Reforecast Revenue and Budget to Proactively Manage Recovery

Like many cities, the City of Portsmouth was faced with the challenge of reforecasting revenue and the city’s parking budget in a post COVID-19 world. Given the uncertainty with shelter-in-place restrictions, it’s an extremely difficult task.

Benjamin Fletcher, Director of Parking partnered with Smarking to create a dynamic revenue model that accommodates for various recovery scenarios. Smarking started by aggregating the city’s historical data through their BI dashboard and analyzed the monthly variance between the budgeted and actual revenue between January and April 2020. Using this variance, Smarking then assumed a monthly percentage recovery tier for each of the analyzed scenarios: worst case, baseline, and best case scenario – each with its own week-over-week growth assumption.

This gives the City of Portsmouth the ability to readjust as conditions change. With this dynamic model, Ben is able to enter the actual revenue numbers against the projections and have an ongoing, reliable revenue forecast.

“Smarking helped me deliver what many called a ‘smash performance’ for my budget presentation last night in front of City Council” – Benjamin Fletcher, Director of Parking at City of Portsmouth.

Access to real-time, centralized data is the first step in extracting key insights and enabling a smart city strategy. Without this foundation in place, data can be difficult and time-consuming to collect, expensive to store, and complicated to analyze. A data-backed recommendation for parking changes can simplify communication among city stakeholders, strengthen the policy, and accelerate the approval process.

Smarking’s professional services are provided to clients at no additional cost. Smarking’s Business Intelligence software includes end-to-end service to ensure that municipalities meet each of their unique goals. To support cities COVID-recovery, Smarking is offering their Business Intelligence solution free for 90-days. Try it out with no risk or commitment, valid for a limited time.

Read more here. 

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Urban Mobility Coalition: Parking and Mobility Leaders Rally for Municipalities to Receive Federal Support

A pledge to seek $30B federal support earmarked specifically for municipal governments across the nation, in order to maintain critical services for communities and help the economy recover from COVID-19 impact.

As we are confronted by the unprecedented COVID-19 pandemic, municipalities across the nation have been experiencing significant revenue losses, facing significant challenges retaining first responders while we need them the most and keeping the communities running for citizens.

A large proportion (often up to 30%+) of the city’s revenue is dependent on parking. With real time parking data from 2,000+ parking facilities (both on-st and off-st) across North America, Smarking saw 90%+ revenue loss since the COVID-19 pandemic outbreak. 40+ cities have endorsed the open letter to congressional and legislative leaders. Support your city by joining the initiative.