Paving the Way
Park your car at the Universal Hilton in Universal City, the Hamburger Hamlet on Sunset Strip or Little Joe’s Italian restaurant in Chinatown and chances are you’ll catch a glimpse into Parking Company of America’s future.
Armed with $20 million in new financing, the family-owned company hopes to build on its record of snap-to valet service at these and other establishments and more than double the number of hotels and restaurants it serves in the next five years.
That’s a big switch from the pay parking lots that so far have provided the bulk of business for Downey-based PCA, which earned $50 million in revenue last year with 150 contracts throughout the West.
“The key to our future is service, service, service,” said Alex Martin Chaves, the 34-year-old president of the company, which leases, manages and owns parking lots.
Hotels and upscale restaurants want more from a parking company than just cost efficiency. They want professional attendants and helpful valets--a vanguard of red jackets that will give customers a favorable first impression.
Prompt, reliable service is also key to expanding PCA’s budding transportation division, Chaves said. The company oversees more than a dozen shuttle bus contracts for airports, municipalities and other organizations, mostly with vehicles it owns.
Some parking companies, however, shy away from service-oriented contracts, particularly restaurant valet jobs with their high labor and insurance costs.
“As a rule, restaurant parking is looked at as the low end of our industry,” said Bob Hindel, vice president of Parking Concepts Inc., a PCA competitor with 100 contracts. “It requires the least amount of expertise.”
Chaves bristles at that assessment. Many competitors, he said, just don’t want to invest the time or overhead necessary to make these contracts viable. Half the battle, he said, is convincing clients that quality service is worth higher fees.
“We have to make the client value what we’re going to do for them,” Chaves said. “We may only get one out of every 10 contracts. But the one we get is worth it.”
Often that one client is a large chain establishment, such as a Hyatt hotel or Tony Roma’s restaurant, that doesn’t think twice about paying extra for top-flight service.
“Clients like hotels aren’t interested in the bottom line. They want to keep customers happy with A-level service,” said PCA general counsel Eric Chaves, Alex Martin’s younger brother and one of four other family members involved in the company.
Tom McNamarra, who oversees guest services for the Universal Hilton, said PCA employees are more professional and conscientious than many of the valets he has worked with in 18 years in the hotel industry.
PCA, he said, does more than just park cars. It finds lost luggage, changes tires, even coordinates rental car returns. “They really take good care of the guests,” McNamarra said.
To the Chaves clan, such stories are a testament to their efforts to instill the importance of service in their employees. To that end, the company requires new valets to undergo 20 hours of on-site training and rewards rusty English speakers with $100 bonuses for each successfully completed English-as-a-second-language class.
PCA Chief Executive Alex Chaves Sr. launched the company in 1967 with a contract to park cars at a now-defunct supper club in Beverly Hills. The fledgling business was an offshoot of a larger parking company the elder Chaves and his siblings started in Albuquerque in the early ‘60s. It’s no surprise, then, that PCA’s own history has been a family affair.
Chaves Sr., his wife, Nadine, and their three children have been the company’s bedrock from the beginning. Alex Martin, Eric and their sister Renee got their first taste of the parking business as youngsters in the ‘70s when they helped their parents keep up the lots and collect money from the honor-system fee boxes their father had installed to save money on attendants.
All five still play vital roles in the business. Nadine handles marketing and Renee oversees revenue control.
“We’re all willing to do whatever it takes to make the business go,” Eric said. “Everyone is working for the sake of the family.”
During its first 16 years, PCA grew almost exclusively through its pay surface lots, until an enterprising Alex Martin, while still in college, landed the company’s first valet contract at a popular Marina del Rey restaurant. High-volume restaurant and hotel contracts now account for more than 30% of business, and the company hopes to increase that amount to more than 50%.
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For now, though, most of PCA’s contracts remain for pay surface lots, including facilities at the Van Nuys, Ontario, San Francisco and Phoenix airports--some of the company’s most lucrative contracts.
A surface lot at the right location--such as an airport--can be a gold mine, although most lots muster only slim profits.
Hotel and restaurant contracts are more profitable, Alex Martin says, because they may come with an established customer base and tend to be long-term. Owners of surface lots, on the other hand, often swap for cheaper operators or shut down altogether if their property can make more money through another use.
“Hotel and restaurant contracts can last as long as you continue to give them good service,” Alex Martin said.
Such contracts can also be the source of more business. Between 1986 and 1990, Alex Martin, fresh out of Loyola Marymount business school, burned up more than 200,000 miles in his car and landed more than 20 new contracts, doubling PCA’s business. Many of the new contracts were referrals from satisfied PCA customers. “If you do a good job, people tell their friends,” he said.
PCA has handled valet and pay parking for Little Joe’s restaurant for three years, and owner Steve Nuccio says he often passes the company’s name along to other restaurateurs.
“They do a real good job,” said Nuccio, adding that he likes the company’s practice of jumping on problems that arise on the lot.
“If a car gets banged up, they deal with it right away,” Nuccio said. “They’ve got their own insurance, so we’re not liable. But if a customer has a problem, they connect it with the restaurant, so it’s important to get it handled properly.”
With its recent corporate reorganization, PCA is now better able to handle whatever new business Nuccio and other clients might throw its way.
The make-over in August has made PCA more attractive to lenders and prospective clients by consolidating and increasing the value of its equity, said Marty Sarafa, who handled the reorganization for the Century City investment banking firm Houlihan Lokey Howard & Zukin. Before that, the company’s equity had been scattered among eight corporate entities set up to limit liability.
“Overall, PCA is now a larger entity in terms of market value,” Sarafa said. “A high-profile hotel wants to do business with a company with a well-thought-out capital structure and organization.”
With its finances in order, PCA can now focus more attention on growth and keeping its existing clients happy. As it is, the company’s six-member sales team spends as much time in the field checking on client satisfaction as it does looking for new contracts.
“We say it over and over: Service is the key that opens the door,” Alex Martin said.
