Vail Valley Voices: Parking policies examined
Vail, CO Colorado
Editor’s note: The following is an excerpt from the Vail Homeowners Association monthly report in April. We plan to publish weekly excerpts from the association, which keeps a close eye on economic and political trends in and outside the town. The newsletter’s electronic version with links to supporting documents is available at http://www.vailhomeowners.com.
Current public policy: The town of Vail owns two public parking structures/transportation centers (Vail Village and Lionshead) each with an estimated parking capacity of 1,100 vehicles. Except for the ski season, public parking is free for these structures.-In winter, standard hourly/daily rates apply and seasonal parking passes are sold.
Recently completed private development projects now provide modest amounts of public parking, some with rates lower than those charged by the town.-
Parking has become an important revenue generator for both the town and the private sector. The advent of privately owned public parking has dented the town’s 40-year monopoly over public parking. The recent building boom-gone-bust delivered an inventory of hundreds of new privately owned public parking spaces.- Hundreds more spaces are on the drawing boards of private developers.
In winter, the cost of daily parking is a point of aggravation to many consumers, most notably locals and day visitors. Some go to great lengths to avoid paying for parking. Many Vail merchants do not like parking fees because their competitors, in nearby communities with free parking, gain a competitive edge. On the other hand, the “winter only” parking fees are a frustration to developers because the town’s parking policies inhibit their ability to collect revenues year-round. Capturing a return on investment from parking fees is their motivation to build more private public parking.
Town officials are reluctant to engage in a major overhaul of parking policy. Their principle aim has been to build their own or obtain it from private developers via “exaction.” Neither is proving to be politically or financially feasible. The town’s attitude may be driven by a desire to protect an important revenue source. Revenues from town-owned parking structures/transportation centers have grown from $1.5 million per annum in 1999 to $4.5 million 10 years later. The town uses these revenues and its Ski Lift Tax to operate Vail’s transportation centers and extensive bus system.
Countervailing view – yield management pricing: There are those in the private sector who believe that competitive market forces can provide for public parking rather than relying solely on Vail’s government monopoly. They believe that public parking has become a highly valued commodity, which guarantees that an ongoing adequate supply of public parking spaces will be provided by the private sector. They see the government’s pricing policy for its public parking as dysfunctional because it generates revenue only in the winter season.
They propose a “year-round” fee and abandonment of the “winter only” rate. A year-round fee could, in their view, reduce winter parking rates, thereby increasing nonpeak utilization and annual revenues overall in both public and private parking facilities. Furthermore, the year-round fee would fluctuate based on market demand. It would be decreased in periods of low demand and increased in periods of high demand (aka yield management). The current ability to track real-time parking space inventories, wedded with advancing cell phone technology, opens the opportunity to use flexible pricing to either attract or deter consumers so that the quality of their Vail experience is assured.
Proponents believe that both utilization and revenues would be increased. They note that currently, day skiers patronize nearby resorts that have “free” parking or they park in Vail’s “free” outlying parking lots and along the Frontage Roads. In their view, using yield management pricing would make the convenience of a closer parking facility more attractive on low-demand days. This could entice day-skiers away from the outlying lots and into parking structures that serve the community’s resort town centers.
Pricing becomes a much more complex issue, if the town were to become dependent upon parking revenues to fund its general operations. Some speculate this may already be the case. If the town relies on parking revenues for non-parking related expenses and there were a fall-off in demand, it could lead to serious consequences. On the other hand, there is a continuing chorus from some consumer segments for “free” or low-cost parking. The town must weigh its policy decisions against the parking fee policies of Vail’s competitors.