What the rise of Uber means for hotel parking lots
 
What the rise of Uber means for hotel parking lots
25 JANUARY 2017 1:13 PM

What could Uber’s potential impact on transportation mean for hotel guests’ need for their cars? The hotel parking lot might be living on borrowed time.

Recently, I was bemoaning to a colleague about how I often struggle to find a relevant topic to write about for this column. Angie said, “You should write about Uber.” And I thought to myself, well you are “uber-duber-whack-a-doodle-doosky. … What does that have to do with hotels?” It turns out, quite a bit, and Angela is one smart lady.

Uber and other ride-sharing services—and the rise of social media applied to a smartphone—translates into a highly diminished desire for Generation Z citizens (and others) to own and drive a car. Indeed, lots of chatter online recently makes a very valid case that for the most part, private auto ownership is one of the worst capital investments anyone could make.

The very expensive car sits mostly un-utilized most hours of the day. It’s parked in a garage overnight, is driven to/from work, or potentially shopping, and these activities may chew up a few hours a day of actual drive time. Otherwise, it sits idle. Factor in the recurring costs of ownership, and Gen Z has figured out it’s cheaper and less stressful to “Uber it” to the next location.

With the added benefit of being able to “text and ride” and communicate via social media as a passenger, why drive when you can ride? Car ownership, and parking utilization, may have peaked in urban communities.

Ride-sharing works well in dense major metropolitan areas but not quite so well in ex-urban locations, where distances and wait times compel some form of car ownership. Finally, the cost of renting a car and parking (whether valet or self-park) often exceeds the cost of overnight hotel accommodations in larger cities—e.g. $70 per night in Chicago.

The end result of these burgeoning trends is a precipitous drop in parking demand. New hotels are reducing the amount of parking stalls or eliminating parking altogether. In some major urban markets, residential parking ratios are extremely low, and cities are requiring fewer parking spots in order to encourage greater use of public transportation.

Autonomous vehicles make headlines on a daily basis. Every car manufacturer is in deep research and development and is looking forward to the day when vehicles are effectively robotic transports controlled by computers. Watch out Uber drivers: Uber will remain, but soon enough, the human driver won’t.

The day is coming when citizenry doesn’t drive, they ride. They do not park, they exit. Traffic jams and gridlock will be stricken from the urban dictionary. Vehicles will be computerized and unattended means of conveyance that are nearly fully utilized capital investments. Parking may become an afterthought, and its revenue streams like the telephone department deleted. You remember landlines, right?

All of this buildup is to point out a major trend at urban hotels: parking is on the decline, no qualifiers. For hotel owners and managers, this means “right-sizing” parking garages, moving to valet operations, and otherwise creating value for those that still do park. (Squeegee the windshield clean upon departure, perhaps?) It means less land requirements for new builds, and greater return on investment when sized right.

But none of this happens overnight or even in the next five years. So in the short term, what are you doing to maximize convenience and parking revenues to enhance the guest experience? Cleaning the windshield, offering a bottle of water on a hot summer day, combining door/bell services with valet are a means to improve the guest experience and the bottom line.

Short term, we find a new form of gridlock in the urban core, “Uberlock.” The ride-share drivers have activated their idle capital (cars) and are circling the city blocks like vultures in the desert, waiting for something to die. And it will; it’s called parking.

George Jordan is senior vice president – operations for Oxford Hotels & Resorts, overseeing a cluster of three-, four-, and 4 ½ -star hotels, both operating and under development. Mr. Jordan has worked in hotels for over 30 years including the Arizona Biltmore, The St. Paul, The Marquette, The Drake, Raffaello Hotel, Hotel Felix, and most recently The Godfrey Hotel Chicago. New openings currently orchestrated by Mr. Jordan include the Godfrey Hotel Boston, and LondonHouse Chicago. Mr. Jordan rose through the ranks while attending college at University of Southern California and Arizona State University, where he obtained a B.S. in finance. George has served as area food and beverage director for Hilton International, based out of the Drake Hotel Chicago, and also as hotel manager at the Drake. George joined the Oxford team in 2009 as area general manager; he was promoted to senior vice president in 2012. His daily duties include oversight of Hotel Felix, Hotel Cass, Godfrey Hotel, and contributes his operational and marketing expertise to acquisition activities. George is a well-respected leader and a member of many Chicago civic organizations including The Magnificent Mile Association, CCTB, DLC and serves on the board of directors for Lawson House YMCA and on the advisory council of De Paul University’s School of Hospitality. Mr. Jordan writes a quarterly column for Hotel News Now and is slated to be a cast member in an upcoming reality TV series.

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