The COVID-19 pandemic dealt a severe blow to the parking sector in Spain, leading to a significant decline in demand due to mobility restrictions and the rise of remote work.
According to a study by the consulting firm DBK, the parking sector experienced a 25% drop in revenue in 2020 compared to 2019. This decline was primarily attributed to reduced urban mobility, with a 50% decrease in public transport trips and a 30% fall in private vehicle usage.
The parking sector in Spain is strong
In 2023. the sector has exhibited signs of recovery, with a 10% revenue increase compared to 2022. This recovery has been fueled by several factors, including:
- The Return to Normalcy: The lifting of mobility restrictions and the return to in-person activities in offices and educational institutions have boosted parking demand.
- Increased Tourism Activity: Spain’s tourism recovery has driven up parking demand in tourist areas.
- E-commerce Boom: The growth of e-commerce has generated increased parking demand in delivery and logistics zones.
- Industry Digitization: The adoption of technologies such as online reservations and contactless payments has made parking more convenient and enhanced user satisfaction.
Forces driving the business
Several factors contribute to the attractiveness of this business in Spain as an investment opportunity:
- Resilient Demand: Parking services are considered a necessity, ensuring a steady demand base even during economic downturns.
- Recurring Revenue Streams: Parking operators generate predictable and recurring revenue from parking fees, providing stability and cash flow predictability.
- Asset Appreciation Potential: Parking facilities often appreciate in value over time, particularly in prime locations with high demand.
- Inflation Hedging: Parking fees can be adjusted to match inflation, protecting investors from its erosive effects.
The challenges of the business
Despite its promising outlook, this business is not without its challenges:
- Aging Population: The increasing elderly population may lead to a reduction in parking demand in certain areas.
- E-commerce Growth: The rise of e-commerce may impact parking demand in retail areas.
