Technology may bite
Los Angeles International Airport’s (LAX) ambitious P3 projects continue to make a statement in the market. Recently, bonds to finance the car-rental facility P3 (ConRAC) were rated.
The financing will support the delivery of the ConRAC project that involves the design, build, finance, operation, and maintenance of the new facility, which will agglomerate over 20 rental car locations in proximity of the airport into one single facility, adjacent to the 405 freeway.
The project, to be connected to the Automated People Mover, will include 6,600 parking stalls, 10,000 idle vehicle storage and 1,100 rental car employee parking spaces. So far LAX has been hugely successful in its P3 pursuits, perhaps encouraging other airports to take up similar projects in the near future too.
But let’s for a minute pause to think how disruptive technologies might impact the sector. Could the advent of automated or electric vehicles make traditional ConRAC-type deals redundant or require them to reorient themselves totally to keep pace with these changes?
Such as: converting ConRACs into automated vehicle hubs; or changing gas stations and highway rest areas into charging stations or battery replacement hubs.
According to a Fitch report published on November 26 that focuses on autonomous vehicles' impact on parking facilities in particular: “with autonomous vehicles likely to operate through ride-sharing and accessing cheaper parking locations, revenues will be adversely affected for not just standalone parking facilities in urban areas, but for those housed in airports and universities”.
The report says this is most likely to play out among younger generations that are moving to large cities in greater numbers.
“Standalone urban parking assets stand to be most susceptible to the effects of driverless cars as they become more commonplace. Once the technology is standardized enough for autonomous vehicles to drop off individuals and travel to cheaper parking spaces further away from the urban centers instead of clogging the facility looking for parking, revenues will decline.”
The report warns, though, that likely to stand in the way of more widespread use of driverless cars are several "high profile accidents involving these vehicles of late". No matter that human-driven cars cause a huge number of deaths on a daily basis. Additionally, the public will have to endure inevitable teething problems as the technology is perfected, the report added.
Just like ride-sharing services have disrupted the taxi and car-rental market over the past few years, new vehicle technologies might also spell danger for traditional facilities. Only time will tell how soon the turnover might happen in this case. But happy pondering to you in the meanwhile!