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Parking and Ground Transportation Update

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Parking and Ground Transportation Update June 20, 2012
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Parking and Ground Transportation

Update

June 20, 2012

Today’s Topics

• Ground transportation vehicle classifications

• Ground transportation passenger pick up areas

• Ground transportation rules and regulations

• Parking update

• Parking decisions

Ground Transportation

• Ground transportation vehicle classifications

• Ground transportation passenger pick up areas

• Need to relocate pick up zones due to overcrowding

•  Includes a $600,000 investment in Phase 1 canopy installation for the new pick up areas

CT 10 Pick Up Queue

CT 10 Pickup Zone

New GT Pick Up Locations

Parking Update

• PARCS infrastructure is in progress – Fiber ready in February 2013

• Can install GT and PARCS and when fiber is installed

• Moving forward with online prebooking system – provides yield management, variable pricing, 3rd party consolidators, links to other websites, promotions

Parking Update

• Parking volume decreased while voyages and passenger volume increased

• Contribution to Gross revenue is down

• Contribution to Net operating income is down

• $.91 of each parking dollar earned is contributed to the Port

• Revenue per passenger is down

• Occupancies are down

Change in Port Activity from 2011 to 2012

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Parking Contribution to Port Revenue

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Parking is the #1 contributor to net operating income, contributing 48% of net operating

income in 2012 and 78% in 2011.

Decrease in Revenue Per PAX

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Current Port Parking

Occupancies

Parking FacilityCT 5 LotCT 8 GarageCT 8 North Lot

Jun-1252%40%0%

CT 10 GarageCT 10 LotAvg Occupancy

61%81%47%

Market Conditions •  Passengers are up, the Port has enough spaces to

accommodate cruise passenger parking, but its market share continues to decline

•  Number of parking providers continues to increase with aggressive local and online advertising

•  Public views off site parking providers as part of the Port and expects the same level of customer service as the Port

•  Estimated $4.6 million of Port parking revenue not earned due to lost market share.

Reason for Market Share Loss

Port daily parking rate = $15 to support Port investments and debt

June pricing varies from free with hotel packages to $4.99 for veterans/seniors.

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Off Site Parking Rate History

Outlook • Port can’t compete with off site rates and still remain a

primary funding source for the Port

• With current business model:

§  Parking decline will continue

§  Port will lose majority or all parking to off site business

§  User rates will increase to make up for lost revenue

&/Or §  Port activity will shrink

What are the Options?

STOP

Option #1

#1 Revoke all permits for parking providers

A parking provider is defined as anyone offering cruise parking or a company transporting customers

for the parking providers.

Here’s Why

1.  48% of net operating income will eventually go away and could be left with no parking

2.  Danger of being in default of bond covenants in the bond loan agreements. The Port has borrowed $74 million since 2008 based on the Port’s revenue projections that include parking.

3.  Could impair future borrowing

Option #2

#2 Restrict Port access – limit the number of trips per day

Option #3

#3 Do not issue new permits

• Existing permits are restricted to current lots. Violations subject to fine or permit revocation.

Option #4

#4 Charge a % of gross revenue privilege fee to parking providers

Option #5

#5 Implement a higher trip fee to parking providers.

• Estimate that the minimum trip fee to make up for lost revenue should be approximately or $110, but probably higher.

• Recommend an initial trip fee of $50 for parking providers. The rate will be periodically re-evaluated.

Trip Fee Options

Implementing the higher trip fee for parking providers:

1.  Will only make up for less than half of your lost parking revenue

2.  But it may help level the playing field for parking rates. At present your competition can continue to lower their rates but the Port does not have that option.

3.  Will help the Port recapture lost market share without hurting businesses that are not competing with the Port’s core business.

Parking Summary

•  Parking is not an ancillary business, it is a core business of the Port that contributes 48% of the net operating income, more than even the ship business.

•  This revenue supports more than simply cruise, it supports infrastructure and investment throughout the Port. Port relies on this revenue to pay for all Port activity.

Parking Summary

•  This core business is being severely undermined and this must be addressed.

•  A small group of people are benefiting at the cost of the citizens of Brevard County.

Parking Summary

•  Gentlemen you are at a critical point. Whether you realize it or not, the financial health of this Port is in danger.

•  You cannot continue to allow this drain of your revenues. The Port and the entire community will suffer.

•  Parking is the Port’s core business.

Parking Summary

•  You are losing millions of dollars to companies that you are assisting to take your revenue.

•  You have invested millions in parking and are only using 47% of the spaces and a year from now you’ll be lucky if you are using 25%.

•  Your debt obligations rely on Port revenues. Parking contributes 48% of total net operating income for 2012 and 78% in 2011.

•  This is an issue that can no longer be swept under the rug.

Recap of Options #1 Revoke all permits for parking providers

#2 Restrict Port access – limit the number of trips per day

#3 Do not issue new permits to those considered a parking provider. Existing permits are restricted to current lots. Subject to fine or revocation.

#4 Charge a % of gross revenue privilege fee to parking providers

#5 Effective 10/1/12 Implement a higher trip fee to parking providers. Initial fee of $50 per trip.

Recap of Options

#6 Revise the GT Rules and Regulations to include level of service standards, reporting requirements, with penalties and/or revocation for non-compliance and trip fee evasion.

#7 Base the trip rates for GT commercial vehicles on length instead of seat capacity.

#8 Approve $599,727 for Phase 1 canopy installation for CT 5/6 and CT10 pick up areas.

Effective October 1, 2012

1.  Revoke all permits to parking providers

2.  List all options

3.  Approve a $50 privilege fee trip for parking providers

4.  Revise the GT Rules and Regulations to include level of service standards, reporting requirements, significant penalties and/or revoking permits for non-compliance and trip fee evasion

5.  Adopt trip rates based on vehicle length instead of seat capacity (defer?)


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