Canadian loonies are not only flooding Buffalo’s airport area parking tills these days, they’re also fueling a lively tiff over who should gather the Canadian coins as profits.
It all stems from a plan by the Niagara Frontier Transportation Authority – operator of Buffalo Niagara International Airport – to sock several nearby hotels for a portion of fees they charge customers who park at their lots while flying to out-of-town destinations.
A record 47 percent of vehicles in the airport’s long-term parking lot now sport Ontario license plates.
And other travelers from Canada are snapping up hotel deals, which offer a room, a long-term parking space and shuttle rides to and from the airport.
Now the NFTA wants to charge 4 percent on the first $500,000 of parking revenues for each airport hotel. It’s only fair to charge the hotels similar fees to those imposed on off-site parking operations, the NFTA says.
But hotel owners are fuming.
“We’re not in the parking business, we’re in the hotel business,” said David Hart, president of the Hart Hotels firm that operates the Holiday Inn and Holiday Inn Express near the airport.
“We don’t charge for parking,” he added. “We do have people who stay at our hotels and allow them to leave their cars while traveling. But we charge a room rate.”
Hart calls the NFTA plan “total nonsense” and tantamount to an “income tax.” He says Hart Hotels faces an accounting nightmare in calculating a theoretical parking fee, as well as figuring out the bed tax it owes Erie County. In addition, the Holiday Inn chain may also seek some royalty for a separate parking charge, further adding to his hotels’ costs.
“Plus, we would be paying twice,” he said. “We’re already paying a big access fee.”
That access fee is what the hotels now pay the NFTA to allow hotel courtesy vans at the airport.
Hart credits the authority with recruiting low-cost carriers that have attracted new travelers from Ontario, Rochester and Erie, Pa., to an airport he calls a “true economic generator.”
“But now they’re taking us taxed-to-death entrepreneurs and slapping us on the wrist here because what we do goes against their business plan,” he said. “That’s crazy.
“They don’t have the right to impose an income tax on us as private people,” he added. “They think they have these broad powers. But they don’t have the right to tax me; those are the powers of the state and federal governments.”
Mark Jerge, general manager of Salvatore’s Grand Hotel on Transit Road, says he’s busy enough now without calculating some fee for separate parking he does not charge. He said he has no idea how to police such a plan.
And if the new NFTA plan drives up costs, it will deflate the number of customers who are now spending money at hotels and restaurants the night before their flights, he said.
“A lot of folks tie in a day of shopping or a nice dinner,” he said. “They’re not just flopping here and going to the airport.
“The customers from Canada won’t understand this,” he added. “And this is not our business.”
But the NFTA plan is not unusual in the airport business. Many facilities around the country impose similar fees. Some facilities are even using their powers to regulate access fees to force cab companies and airport shuttles to “go green,” according to William A. Fife, a Long Island consultant who once served as deputy general manager of Kennedy International Airport.
“If you drive a green vehicle, they might charge you … $1,000,” he said. “If you drive a fuel hog, it might cost $10,000.”
But it is not at all unusual, he said, for airports to charge hotel customers fees for using airport facilities.
“If they’re giving them free parking,” he said of the hotels, “then they’re in the parking business, too.”
That’s exactly the view at NFTA headquarters, where airport officials take issue with Hart’s contention that the Holiday Inn does not charge for parking. They point to the hotel website advertising a “park, stay and go” rate of $149.99 that includes up to seven days of parking and airport shuttle service.
“It’s an issue for those who charge an additional fee to park their cars,” said NFTA spokesman C. Douglas Hartmayer, adding the state’s Public Authorities Law empowers the NFTA to impose such parking and access fees.
Hart responded that all of his business is sold in “packages” that may include food, beverage, banquets or parking – and such packages are taxed by Erie County and generate franchise fees to the Holiday Inn chain.
“My income statements do not include parking,” he said, lambasting an “almighty NFTA” that runs a 9,800-car lot and pays $2.2 million annually to a parking management company.
“I think they’ve taken the word ‘authority’ too far in this instance,” Hart said, adding that he hopes “clearer heads will prevail” before lawyers become involved in the dispute.
All the new business around the airport in recent years is positive, said William R. Vanecek, NFTA director of aviation. And the authority is eager to assist in its growth, he added.
But he also pointed out that off-airport parking companies have complained about the parking deals now offered by nearby hotels.
“When they start promoting long-term parking at their hotels, that’s where it becomes problematic,” he said.
“If you pay one rate, do they let you use their pool for seven days if you stay one night?” he added. “You know they don’t.”
So when the Holiday Inn advertises a rate that includes parking, Vanecek said, the hotel needs to segregate that portion of the rate and pay 80 cents on every $20 up to $500,000. Higher rates are scheduled for income above $500,000, but Vanecek said the NFTA does not anticipate any area hotel breaking that barrier.
“They need to be on the same competitive level as the other off-site parking operations,” he said of the hotels.
He also dismissed the idea of double access fees for shuttles and vans transporting those parking at hotels.
“Now they’re in the realm of an off-site parking operation, and they are subject to a different fee,” he said.
The NFTA last year realized $193,131 from off-site parking operators, and another $41,404 from hotel courtesy vans. As it looks to increase those figures, Vanecek acknowledged that if all hotels simply listed packages without delineating parking charges, the authority would be challenged to pursue its current plan.
But he said the NFTA would then probably hike its access fees to compensate for a situation that must be addressed. He emphasized the plan under discussion with hotel owners is only preliminary, and that other options will be reviewed before a final decision is reached.
But he also made it clear that the authority is looking to increase its parking revenues not only to help balance the budget, but also as a matter of fairness.
“We want the hotel operators to be prosperous and they want us to be prosperous,” he said. “We just want to be consistent in what we charge the ground operators at the airport.”