Let’s face it: Parking isn’t the flashiest hotel amenity, but it can have a massive impact on a guest’s experience, not to mention a hotel’s bottom line. Considering that the average driver spends 17 hours per year searching for parking, a hotel’s parking facility can be a welcoming oasis in a parking desert.
Unfortunately, when it comes to planning for hotel parking, many hoteliers fall flat. They focus on revenue and seasonal parking prices rather than looking at deeper data.
What’s the consequence?
When hoteliers get distracted by shallow revenue numbers, they may be left overspending, undercharging and losing profit on unused parking space.
Luckily, there are ways to use more complete data to inform parking decisions. That’s why a benchmarking 101 parking plan should be part of any hotel’s performance strategy.
Here’s how to benchmark a hotel’s parking operation for better profitability:
Why Implement a Benchmarking 101 Parking Strategy?
On its face, parking may seem like a simple part of a hotel’s overall performance plan. After all, it’s just paved concrete, right? Actually, parking operations are complex, and they can be expensive.
At the core of parking’s complexity is one common fact: It relies heavily on local events and unpredictable demand. Just think: If there’s a nearby festival going on, demand for on-site parking can skyrocket. At the same time, something as simple as construction or weather could completely change the value that parking facilities present to guests.
That’s why benchmarking must go much deeper than revenue figures. By getting a handle on operational data, a hotelier can determine how profitable their parking operations are. That tells a clearer story about parking’s value, which a hotelier can then use to fuel a profit-focused hotel performance strategy.
A Wide Sweeping Approach to Hotel Parking Benchmarks
At the outset, it’s important to determine how parking facilities fit into a hotel’s profitability on a grand scale. That means looking beyond revenue to operational figures.
Start by taking note of the full scope of the hotel’s parking operations. And always include the costs they require to run smoothly.
Sure, a hotel may be generating more revenue from parking than ever, but that revenue doesn’t do anyone much good if it’s not landing on the hotel’s bottom line. That’s why operational efficiency should be at the core of a hotel’s benchmarking strategy.
Use Labor to Track Parking Operations
In the hospitality industry, it’s a commonly known fact that people are the engine driving any operation. Parking is no different. That’s why the first step in seeing a fuller picture of parking costs is to look at payroll. Here are some essential labor costs to consider:
- Valet services
- Third-party or outsourced vendors
- Lot attendants
Of course, parking operations come in all shapes and sizes. But the key takeaway is to measure the total cost of labor that it takes to run parking. From there, compare payroll against parking revenue numbers and reveal whether the hotel’s workforce makes parking worth it.
Key Metrics to Watch: Payroll as % of Parking Revenue
Measure All Operational Costs
Chances are that parking facilities take up a good chunk of real estate. That means they probably have hefty price tags stacked on top of labor costs. This is why it’s also important to include any parking overhead in a hotel’s benchmarking strategy.
Here are some easily overlooked but crucial costs:
- Parking lot maintenance costs
- Leasing fees
- Property taxes
- Ticketing equipment costs
As soon as a hotelier has a grasp on all operational costs, stack them up against the revenue that parking operations are bringing in. This will reflect the fuller value of a hotel’s parking assets.
Key Metrics to Watch: Gross Operating Profit and Operating Costs Per Parking Space
Parking Data Should Inform Performance Strategy
When a hotel is gathering the right benchmarking data, a hotelier will have the raw materials to make better decisions about the property.
For instance, after looking at labor costs, it may be worthwhile to reconsider whether the hotel’s parking operation is run internally or outsourced. Or, those metrics may hint at an unprofitable parking lot that’s in need of an overhaul.
Overall, when a hotelier drills down to profitability, they can determine their hotel’s parking facility’s true worth. And that’s enough to turn any bland lot into a dynamic asset.