As cars took over America, so did parking lots and garages.
There are about 700 million to 2 billion parking spaces in the US – in other words, between 2.5 and 7 spaces per registered vehicle. About 10% of that inventory is paid parking. And for decades, it was a pretty stable business.
But the low barrier to entry makes it a crowded and fragmented industry. Competition is fierce. Insiders say demand for paid parking is flat or declining in most markets, with the exception of healthcare and event facilities.
According to Jerry Marcus, who runs a Boston-based parking consulting firm called Parking Consulting Group, the entire parking industry has raked in about $121 billion by 2022.
The industry is gradually recovering from the deep hole covid-19 pandemicas revenue drops to $58 billion in 2020 — 56% lower than in 2019.
The entire parking industry is expected to rake in around $144 billion by 2023. That’s a 10% increase from 2019. However, many in the industry are worried about falling demand.
E-commerce has dealt a blow to brick-and-mortar retail, the rise of ride-hailing has eliminated the need for parking in many cases, and the post-pandemic working trend means fewer people. drive into urban areas five days a week more, if at all.
In the larger parking industry, there is a group of companies that manage parking facilities for owners. According to market estimates, that industry has generated between $8 billion and over $10 billion in revenue by 2022. Between 2018 and the end of 2023, IBISWorld estimates they will decline at a weekly rate. year is 7.7%. But the parking facility industry is expected to grow 1.4% from 2023 to 2028.
Growth is expected to return, albeit slowly and slowly, due in part to pent-up demand and operators taking adaptive measures, including servicing the call market. growing vehicles and the rise of electric vehicles, such as vehicle charging or maintenance.
The industry was forced to find ways to reinvent itself. Parking management companies such as SP Plus has been investing in new services and technologies, including an app that allows customers to reserve and pay for parking on their phones, and technology that allows companies to change prices when needed – such as the time of day or when the asking price is high. There is also technology that automatically charges cars when they go in and out a lot.
As of 2022, technology solutions account for about 2% of SP Plus’ gross profit. The company expects that number to grow to 10% by 2025.
“What we’re looking for with technology is that we can deliver hardware and software on a very competitive basis,” said SP Plus CEO Marc Baumann. “Even in situations where we might not be the parking operator right now. And that makes the address market for us bigger than it used to be.”
Tim Mulrooney, global service lead at William Blair, says big players like SP Plus are better positioned to respond to declining weather demand than smaller parking companies.
“The bigger people, who have the capital to invest in R&D and technology, the technology capabilities can do things like dynamic pricing, pricing, gateless technology, other things that are really different from the industry.” The parent and child parking management company only manages a few of the locations in an area,” Mulrooney said.
