Cleveland, Ohio
Joe Calabrese
CEO & General Manager
Greater Cleveland Regional Transit Authority
Funding is tight for transit agencies across the nation. For new revenue, consider the sale of naming rights sponsorships for key transit assets.
Selling naming rights to professional sports facilities has been the norm for years. Today, many college and high school athletic facilities bear the name of a major corporate partner. Isn't it about time for transit to follow suit?
Greater Cleveland Regional Transit Authority (GCRTA) was the first transit system in the nation to sell naming rights sponsorships to its assets. GCRTA partnered with the Superlative Group in 2008, and as a result, naming rights sponsorships have been negotiated for:
- The HealthLine — recognized as the top bus rapid transit (BRT) system in North America. The joint 25-year sponsorship is with two world-class health-care facilities — the Cleveland Clinic and University Hospitals — both of which are located along the route.
- Naming rights for individual HealthLine stations have been sold to respected organizations such as Huntington Bank, Medical Mutual, Cleveland State University and Bryant & Stratton College.
- In 2014, Cleveland State University entered into a 28-year naming rights sponsorship for the popular 55 bus line, as RTA upgraded the service to BRT. The Cleveland State brand can be seen on 16 articulated vehicles, as well as 19 upscale bus stations along the Clifton corridor.
The sales of these naming rights pumps millions of dollars of revenue into GCRTA. While most of this new revenue goes to the bottom line, a portion is dedicated to maintaining a higher level of cleanliness and landscaping on the sponsored services.
Of course it helps when these services are considered strong community assets.
- HealthLine: Annual ridership has increased by 60 percent since 2008. The service has generated more than $6.3 billion in development along Euclid Avenue.
- Cleveland State Line: Ridership has almost doubled since its inauguration in December 2014.
What is better than money, or at least almost as good? The answer is transit's image in the community. Partnering with well-respected institutions for these sponsorships has the added benefit of enhancing the image of our transit systems.
In 2006, GCRTA introduced Downtown trolley service that was free with a smile. The popular service — which now carries up to 6,000 passengers a day — was initially underwritten by a single source, such as the local convention and visitor’s bureau, the Corner Alley entertainment venue or Dollar Bank.
Later, when trolley service doubled, the Downtown Cleveland Alliance coordinated a campaign that garnered 14 more sponsors. Although naming rights were not sold, the names of all donors appear on every vehicle. The service remains free today, and is extremely popular with large events, such as the 2016 Republican National Convention.
As the GCRTA and The Superalative Group continue to look for other opportunities, at least one other major local employer is giving serious consideration to a partnership that supports popular routes connecting their multiple facilities to each other and to the community.
When done properly, selling naming rights is one of those win-win situations for all concerned.
Banff, Alberta
Martin Bean
CAO
Bow Valley Regional Transit Services Commission
The Bow Valley Regional Transit Services Commission (BVRTSC) is a unique agency in Western Canada, comprised of three voting members (town of Banff, town of Canmore and Improvement District #9). It was formed with the objective of providing or coordinating local and regional transit services within the regional service area. The commission is supported by administration staff from the towns of Banff and Canmore. As well, Parks Canada actively participates in commission meetings. The bottom line objectives are social, economic and environmental, supporting the long-term sustainability of the region.
Revenue generation through traditional and non-traditional methods has allowed the BVRTSC to consistently remain in the top 10 percent of Canadian transit agencies for cost recovery. As an agency working to meet the needs of both residents and high volumes of visitors, we seek to develop strong corporate and community partners that help us achieve our goals.
Our partnership with the hotel sector in Banff has gained benefits for the hotels, their guests and our agency through increasing the opportunity for accessibility to local destinations and attractions without moving their private vehicle. We have contracts with several local hotels whereby they pay a monthly fee to the BVRTSC and in exchange receive annual transit passes for all their staff and three day passes for all their hotel guests. Upon request at check in, a hotel guest receives a transit pass that expires 3 days from first use and gives free access to transit within the town of Banff. This program is extremely successful and represented more than 50 percent of all riders on the local service, with 350,000 rides being enjoyed in 2015 through this program. The smart cards used for the partner program are reloadable and recycling is encouraged by the hotel partners and the BVRTSC drivers.
An additional, albeit smaller, revenue generation method utilized are the print and digital advertising opportunities within the buses operating on Canmore, Banff and our Regional buses. With our strong Brand Standard, we offer advertising only on the interior of the buses as the exteriors are all fully wrapped with local animal images. Local businesses, educational agencies and special events organizers are currently taking advantage of the advertising opportunity, providing both their commercial and community messages to transit users.
Although primarily a scheduled transit provider, we provide a small number of charters on a request basis to our corporate, hotel and government partners. These charters are typically for special events and while providing some revenue for the organization, also help to solidify the partnerships that are vital to the success of the BVRTSC.
Media and social media exposure are key indirect revenue generators for the BVRTSC and contribute strongly to the success of transit in Bow Valley. We are lucky in our region to have strong support from the local print and radio media agencies, giving us extensive exposure for any new programs or updates that are occurring. We use these opportunities to help increase awareness of transit in Bow Valley and to attract new riders to use our service. A strong social media presence assists in this awareness and increasing the rider base.
There are many opportunities for revenue outside of the traditional farebox and we are constantly looking for new ways to offset the cost of transit. While our primary focus is increasing ridership and reducing traffic congestion, revenue sources remain critical to ensure the successful sustainability of transit in Bow Valley.
San Diego, Calif.
Paul C. Jablonski
Chief Executive Officer
San Diego Metropolitan Transit System
It has only been recently that transit agencies have come to realize the value of their entire inventory of assets. Yes, we’ve long understood how transit can take advantage of rail cars and buses to generate non-fare revenue through traditional advertising. Bus shelters along major automobile corridors have also been lucrative. For some large agencies, these assets generate millions of dollars each year.
But transit’s ad inventory is much greater than that. Many systems have transit stations adjacent to freeways or major thoroughfares that have exposure to millions of cars. Station signage and printed materials also have the ability to create millions of impressions.
And that — creating impressions — is ultimately the payoff for a partner who commits to a multi-million dollar naming rights package with a transit agency.
Evaluating all assets and putting a realistic value on those assets is the first step in forming a partnership. In San Diego, the Metropolitan Transit System (MTS) took stock of every rail station and evaluated how many people would see that station from freeways and major roads. We looked at all the system signage and all of the printed materials we produce each year, including agency advertisements, schedules, brochures, tickets and even news releases. Web pages and social media were also evaluated. Every instance our partner’s name would appear in our materials was counted as part of the overall impressions being made in the community.
The key to the evaluation, of course, is determining how much each impression is worth. To do that, MTS looked at how much money a potential partner would have to spend to capture the same number of impressions in other media. And the value adds up fast.
Armed with the value of high-profile assets, transit agencies can then start approaching large entities with a proposal. At San Diego MTS, a firm was hired with experience in naming rights deals across the country. It felt strongly that MTS should not issue an RFP and hope for high bids. Its model, based on maximizing the revenue from a naming rights partnership, is to approach companies individually to learn what is motivating their ad buys and to understand their markets and competitive realities. With that knowledge, individual proposals are crafted that more exactly match the needs of the partner.
This approach worked for MTS. The system’s Blue Line light rail line, which runs from the border with Mexico to downtown San Diego and is set for expansion 11 miles north to UC San Diego, is now called the UC San Diego Blue Line. The value of the deal is $36 million over 30 years. It is entirely funded through UC San Diego Health, a for-profit hospital. No taxpayer dollars are being used. UC San Diego believes it is receiving exceptional value from its deal, allowing it to reach more of its targeted audiences with fewer dollars expended.
For MTS, the agency is now getting a new, large and guaranteed revenue stream for the next 30 years. That’s a win-win partnership.
Toronto, Ontario
Steve Naylor
Director, Business Planning
Metrolinx
As part of our Regional Transportation Plan, Metrolinx provides residents and businesses in the Greater Toronto and Hamilton Area with fast, convenient and integrated transit. Working through its divisions Go Transit, Presto and Union Pearson Express, Metrolinx is transforming the way the region moves.
In our five-year business plan, Metrolinx committed to growing ridership by becoming a global leader in service delivery and customer service excellence. Part of this commitment was finding innovating partners to enhance our new air-rail link to between Union Station and Pearson Airport, the Union Pearson Express. When engaging potential UP Express partners, there was significant interest in partnering with Go and Presto. UP Express partnerships were successful, exceeding revenue projections by 300 percent. In August 2015, Metrolinx launched an expression of interest (EOI) to seek partners for Go and Presto in three categories: quick service restaurants (QSR), grocery, and financial services.
These partnerships aim to:
- Deliver a QSR solution across the Go Transit network giving our customers quick, convenient and consistent food and drink options.
- Provide a unique grocery/retail solution that will make it easier for our customers to make everyday purchases on the run.
- Increase Presto distribution and funding and loading options
- Enable payments options for Presto customers
Metrolinx operates on a customer-first approach. The partnerships will enhance customer experience by providing convenient amenities and services to meet the wants and needs of our Go and Presto customers. They will also make customers’ journeys more enjoyable and provide solutions to fit their everyday wants and needs. A comprehensive quick service restaurant would give our customers quick, convenient food and drink options. A unique “click and collect” grocery/retail solution would allow Go customers to order groceries online or through an app which would then be delivered to a secure, refrigerated locker at their Go station. Our customers have also asked for increased distribution, fund loading and payment options for Presto, as well as incentives and credit card offerings. Mobile solutions could improve the customer experience. By providing an enhanced customer experience, these partnerships may make transit more attractive to non-transit users.
Partnerships will help us invest in an expanded transit network and provide a source of non-fare revenue as well as help us reduce costs. Go Transit is looking to aggressively increase the service network over the coming years and provide more frequent service. Offering an improved customer experience will be crucial to help to attract and retain riders. As Presto continues its expansion, Metrolinx is seeking ways to provide more card purchasing and loading options and continuing to improve the customer experience.
