Maximizing Revenue with Flex Parking Subscriptions
August 15, 2023
October 13, 2023
Maximizing Revenue with Flex Parking Subscriptions
August 15, 2023
October 13, 2023
In a previous blog, we discussed various parking payment options and their benefits for tenants and visitors. While traditional monthly parking subscriptions have been a staple in the parking industry, Flex parking subscriptions are emerging as a less-known but increasingly popular choice among both property owners and tenants. In this article, we'll delve deeper into the workings of Flex parking subscriptions and why having a flexible and reliable parking system is essential for optimizing revenue.
Flex vs. Traditional Monthly Parking: What Sets Them Apart?
Traditional monthly parking subscriptions have long been favored by office workers and residential tenants seeking convenient parking solutions. Under this model, drivers pay a fixed monthly fee for an assigned parking spot. With monthly subscriptions, drivers have the assurance of a dedicated parking space whenever they require it.
However, with the rise of hybrid work arrangements, where employees no longer commute to the office five days a week, the utilization of these monthly passes has diminished. Drivers find themselves not deriving maximum value from their parking investment.
Enter Flex parking subscriptions, one of the latest innovations in parking solutions. Flex parking offers dynamic adaptability to varying parking needs, enabling tenants to maximize parking space usage and property owners to optimize revenue. In contrast to traditional monthly subscriptions, Flex parking doesn't allocate specific parking spaces to named drivers. Instead, businesses can share these space allocations among as many drivers as they wish, provided they do not exceed the allocated number of spaces (or concurrent parks) at any given time. This flexibility is ideal for businesses with hybrid work models, ensuring better utilization of this valuable amenity.
While some parking garages have offered similar pass options as Flex for a while, traditional parking payment and management technologies lack the infrastructure to track the number of vehicles a tenant has parked simultaneously. This loophole could lead to potential revenue losses through misuse of the system.
Solving the Underutilization Dilemma with Flex Parking
To illustrate how Flex parking subscriptions address this issue, let's consider a hypothetical scenario. In a traditional monthly parking setup, Tenant A might have 20 drivers needing monthly parking spots, with an average occupancy of 10 parking spots per day. Consequently, Tenant A has to rent 20 parking spots each month, resulting in substantial underutilization.
This scenario presents two significant challenges:
Tenant A is incurring expenses for 20 underutilized parking spots, making it a costly investment.
Property owners suffer from space underutilization, as the reserved parking spots for Tenant A often remain vacant.
Now, let's explore a different scenario. Tenant A opts for a Flex parking subscription, which includes 10 concurrent parking spots. With this flexible option, Tenant A only pays for the 10 spots that see frequent use, essentially those used daily. Regardless of whether different drivers use the spots each day, their user profiles (identified through their phone number or license plate at entry) are associated with Tenant A's company account, confirming their authorization to use one of Tenant A's parking spots.
But what happens when more than 10 authorized drivers need to park? Suppose, on a busy day, John becomes the 11th concurrent driver associated with Tenant A's Flex subscription. In this case, John pays the applicable parking fee only during the time when Tenant A has more than 10 cars parked in the garage. Notably, John pays only for the duration of his stay during the overage period.
Vend's system is sophisticated enough to track the number of cars registered to each tenant, along with their entry and exit times. Tenants favor Flex parking subscriptions because they reduce the risk of paying for underutilized parking spots.
Illustration of the situation explained above:
Boosting Revenue with Flex Parking Subscriptions
Flex parking subscriptions offer two primary avenues for boosting garage revenue over traditional monthly subscriptions. Firstly, each Flex space becomes more valuable to the tenant due to increased utilization. Utilizing a cost-to-value model, the enhanced space utilization enabled by accommodating multiple drivers during different times allows per-space subscriptions to be priced higher than traditional monthly spaces.
Secondly, as tenants require fewer reserved spaces to serve the same number of drivers, property owners can convert the vacated spaces into other Flex passes, monthly passes, or transient spaces. Additionally, garages previously offering shared passes without the means to enforce or track utilization can now bill tenants for overages, resulting in additional revenue, or renegotiate lease terms at higher rates using this valuable data.
Vend's Flex Parking Subscriptions - A Win-Win Solution
Overall, when tenants and drivers can derive more value from a product or service, everyone benefits. Flex parking subscriptions are just one of the many ways Vend is revolutionizing traditional parking management technologies for the benefit of property owners, tenants, and drivers alike. To learn more about Vend and discover how Flex parking subscriptions can enhance your parking revenue, schedule a personalized demo today.
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