Hoteliers Find Ways To Turn Parking Lots Into Profit

car parking spaces

Hotel parking facilities can be highly efficient profit centers, but often are underutilized by hoteliers who lack revenue management discipline.

Michael Doyle, managing director and executive vice president of asset management company CHMWarnick, said well-operated parking lots and facilities can benefit both the guest experience and returns for ownership.

Selling parking spaces is similar to selling hotel rooms as both require the same level of revenue management discipline, he said. But if there is no revenue management discipline, then a hotel is missing out on opportunities to maximize the performance of its parking operation.

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“They are perishable products. … If they’re underutilized, you’ll never be able to recover any revenue from that space,” he said.

The difference between a parking space and a hotel room is the latter is more traditionally sold for 24 hours at a time, but a parking space can be used for 15 minutes, an hour, three hours or longer. The demand for spaces declined during the pandemic. However, about five months ago, the use of parking spaces from leisure travelers has started to increase.

Ron Loman, senior vice president of operations at management company Real Hospitality Group, said some of his company’s properties started charging overnight fees during the pandemic, bringing money to the bottom line.

“In our resort properties throughout Maryland and Delaware, we just implemented a nightly fee. It is going to be seasonal. It’s not a large fee: $10,” he said, noting there’s been little resistance to it so far. “It’s another revenue stream that’s very profitable, because we don’t have any costs associated with it.”

Some smaller beach towns are strict on parking, he said, and if a hotel can supply that, it provides value to the guest. And for airport hotels, park-and-fly options have always been popular.

Read rest of the article at CoStar