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Loyalty programs, half-off sales and even free coffee. These are some of the measures airport executives are considering to encourage travelers to park in their lots and garages, as ride-hailing apps like Uber and Lyft have surged in popularity.
Parking is an important source of revenue for airports, sometimes second only to the fees airports collect from airlines, such as for terminal rent and landing fees. Airports are now scrambling to protect this key income stream as more travelers opt to leave their cars at home and take an Uber or Lyft to the airport.
Software consultant Allen Mederos said on business trips longer than two nights, he'll take an Uber from his Fort Worth home to the Dallas-Forth Worth International Airport, about 45 minutes away. The trip costs him $40, while the lot is $24 a day.
"I definitely use it more frequently," said Mederos, of Uber. "It's cost-benefit."
Airports throughout the U.S. are taking a cue from airlines, launching or developing loyalty programs of their own. They include free parking after they use an airport lot for a certain number of days. Some airports are also trying to make airport parking more convenient, such as by allowing drivers to reserve a spot close to terminals.
John Ackerman, who heads global strategy and development at Dallas Fort-Worth International Airport says he uses Uber and Lyft "all over the world" but is trying to make the airport's lots more attractive. Parking's share of revenue at the American Airlines' hometown hub slipped from 32.4 percent of its overall income in the 12 months ended last September from 34 percent a year earlier, it said.
In April, DFW started allowing travelers to reserve a specific parking spot online and pay ahead of time through the website or airport's app. It also introduced a dynamic pricing model, which rises and falls with demand.
Sometimes parking, which is $24 a day in the main lot, can be half-off when demand is low. The airport increased parking fees, however, in 2016, raising the full-day rate by $2.
"Just like an airline seat or hotel room [that goes unsold] it's perishable," said Ackerman, adding that the airport is even considering perks like a free Starbucks coffee for loyal travelers who opt to park at the airport.
Miami International Airport is considering a similar loyalty program it hopes to launch by the end of the year, a spokesman said.
Strong passenger growth is helping airports make up for the shift to ride-hailing apps, as a greater number of travelers fly. Close to 896 million passengers boarded planes in the U.S. in the 12 months ended in June, up more than 3.9 percent from the year-earlier period, according to the Department of Transportation.
"There are a number of things that could mask the underlying issue, such as traffic growth," said Darren Perry, a managing director at firm L.E.K. Consulting, specializing in aviation and infrastructure.
Some airports are already seeing an impact. Denver International Airport reported that parking revenue fell more than 1 percent to $1.76 billion in 2017, while ground transportation revenue, which includes fees collected from Uber, Lyft and from ride-hailing apps, rose 29 percent to $12.4 million in the same period.
"One day parking revenues could really dry up and we could see an even greater focus on other non-aeronautical" revenue, said Stephen Freibrun, a principal at consulting firm ICF. He said that include include more food and beverage concessions.
Other airports are planning for continued growth of Uber, Lyft and other ride-hailing platforms. Pittsburgh International Airport is just starting a roughly $1 billion renovation of its facilities, a plan that originally included around 5,000 parking garage spots, in addition to the some 2,000 spaces it currently has. Executives later decided to reduce that to roughly 3,500, said Christina Cassotis, CEO of the Allegheny County Airport Authority, which runs the airport.
"We're scaling back," she said in an interview.
So far, the sheer increase in air travelers is keeping parking revenues aloft, according to Moody's Investor Services, which rates airport's credit worthiness.
But ground transportation revenue, which includes both parking and fees paid by Uber and Lyft and other ride-hailing platforms, decreased to $8.65 per passenger in fiscal 2017 from $9.04 two years earlier, Moody's said in a report in April.
That decline and the rise of ride-sharing platforms aren't enough to hurt airports' borrowing costs, said Moody's airport analyst Earl Heffintrayer. The issue, however, is more acute at smaller airports that don't have the passenger volume as their larger counterparts, but the revenue from car rentals and parking is "on a downward trend," broadly he said