Friday, October 03, 2014

Expanding Airport Parking Options Without Building new Parking Lots or Parking Garages

One of the major differences between economic decisions in a free market and decisions by government bureaucrats in a socialist economic system is that anyone in a free market has freedom to see a perceived need and try to satisfy it while bureaucrats tend to be limited not only to their area of expertise but also limit themselves to the constraints of the status quo.

I saw an example of this on a recent trip which took me across the nation by air.

Once airborne, airplanes are a fast way to travel over a long distance.  However, getting to the airport can be both time consuming and stressful.  This is especially true when one lives in a small city, like Tucson where I live, and decides to take advantage of more choice and often lower fares offered by a major airport in a nearby large city like Phoenix.

While there are often van and bus lines offering reasonably priced service to nearby large airports, there is still the problem of scheduling and parking.  For early morning flights there is the added problem of first, the service not offering service early enough to make the connection and, second, even if they do offer early service this usually requires getting up at one or two in the morning in order to catch a shuttle in time to make your flight.

Driving to the airport is an option but here one has to contend with the congestion that surrounds large airports as well as having to leave your car in some expensive and often distant lot with little security.

A few years ago I discovered some motels near Phoenix Sky Harbor Airport offering free parking to those who spent the night before the flight at their hotel.  This enabled my family and me to drive to Phoenix the night before, get up at a reasonable hour for the flight and take the motel's free shuttle directly to the terminal while leaving our car behind in their lot.

For my wife's and my recent trip only a couple of motels offered this service and the parking was limited to one week while we were going to be gone for three weeks.  With a 7 a.m. flight there was no question of whether or not my wife and I would spend the night before the flight in a motel.  The only question was how to handle the logistics of finding a place to stay, finding convenient long term parking and getting to and from the airport with the least amount of time and stress.

In searching the web for the simplest way to juggle hotel, car, parking and getting to and from the airport to the car with all our luggage I came across an outfit called Global Airport Parking.

Not only did this service provide the simple parking and travel solution I was looking for, I was also intrigued by their business model.

Their website states that they are a national company offering parking services located near both airports and cruise ship ports in cities around the U.S.  However, they appear to be basically a virtual company that doesn't own or lease any of the parking real-estate that they rent out to customers.

Instead, the company contracts with hotels and motels located near airports and cruise ports to rent the unused parking spaces that these establishments have.  For motels much of their clientele are travelers traveling in their own cars.  Thus, with the exception of some in large cities where real-estate is scarce and expensive, parking is provided at no extra charge along with rooms.

Since, it is not common for these establishments to have every room rented every night they usually have some empty parking spaces most of the time.  Also, some of their business travelers don't come with cars which leaves additional spaces available.

Global Airport Parking is thus able to rent these unused parking spaces to travelers like my wife and I who need a place to park our car while flying off to some other vacation destination.

All the motel has to do is judge how much unused parking space they will have at a given time and make that space available to Global Airport Parking to rent out.  In return the motel gets to share in the revenue paid by people leaving their cars in these otherwise unused spots.

The motel also gains from possible additional customers for their rooms as many with early morning departures and/or late evening arrivals also rent a room at the beginning and/or end of their trip as well as renting the parking space for the duration of their trip.  Further, in addition to the potential for additional room rentals the motel also benefits from more potential customers visiting their site and remembering it for future trips requiring motel accommodations.

Finally, in addition to more parking choices for tourists continuing their trip by air or sea and the opportunity for additional marginal revenue for the motels, society also benefits from the fact that the additional parking space for out of town travelers has been created not by bulldozing more land and building more parking structures but by utilizing the existing, but un-used, parking space in motel parking lots.

Another example of how entrepreneurs create more goods and services while utilizing fewer resources.

No comments: