NLA EXPERTISE: An operator and board member of the National Limousine Association managed to stay compeitive on New Year's Eve despite the recession. Deena Papagni, owner of a limousine company near Fresno, Calif., was quoted in this article:
EXCERPT: Deena Papagni, the President of Touch of Class Limousine Services says she is staying competitive by offering customers the same rates from 10 years ago and it's working. "You just can't sit in your house just because we are in a recession," said Papagni. "Everything looks fantastic," said Papagni, "our whole fleet is booked with the exception of one limousine and one corporate Sedan. But, other than that our bus is booked, our super-stretch SUVs are booked."
LIMO DESTINATIONS: While private jet travel may be taking an economic hit like everything else, this article at least shows signs of consistent demand among wealthy travelers. Upscalers may be cutting back on luxuries because it's fashionable, or they're afraid of what lessers might think. We say, don't be shy. If you are rich enough to worry about what others might think or say about you, then you'll be resented and envied whether times are good or bad. So enjoy, spend, rent a limousine, show everyone you know how to arrive even when the masses are stuck. We at LCT have no adimiration for those who can afford limos but avoid them becasue they want to seem, um, humble and sensitive. There's nothing more patronizing than a fake slummer. -- M.R.
PARTY PALACE: In the Scene Limousine has launched a marketing program in the Phoenix market called Naughty on Wheels in Scottsdale.
Click here for description and cute chick photo. During the trip, customers can receive a free gift bag from Porn Pinatas, enjoy food and drinks at RA Sushi, stop at Castle Boutique store for lingerie or adult toys, and then party, party, party at their favorite club in Scottsdale. What a night! Operators around the country have done well going outside airport runs, weddings, and proms. Packaging and marketing special nights on the town can produce big dollars. -- J.L.
SHOP AROUND: Mystery shopping is one of the most effective, low budget methods for conducting market research on your competitors and your own company. The National Federation of Independent Business
provides tips on making it work for you. Do you have friends and family that care about your business and want to help you through a quick and easy process? Have them make phone calls for booking trips and see what they find out. Better yet, have them take trips and report back to you exactly what they thought about everything from start to finish. -- J.L.
DRIVING FOR DRINKERS: A young transportation entrepreneur at the University of California/San Diego has found a worthwhile chauffeured niche that doubles as a public service.
Drunk drivers kill 13,000 people each year in the U.S. Each accident could have been prevented had the driver ridden in a chauffeured vehicle.
Despite all the awareness, tougher laws, and social stigmas, drunk driving remains a chronic problem.
Drunks may not be the most appealing clients, but think about what you could prevent. That limousine tragedy underscores the need for such services. -- M.R.
HAPPY NEW YEAR: Happy may not be the best buzzword for the new year given the worsening economic picture, but then aren't most people happy on a roller-coaster? At least the gas prices, hotel rates, airline tickets, and restaurant meal deals are spiraling down, down, down. The trick is to not let it all deflate you. Thinking optimistically, if it gets really cheap to do overnight travel and lodging, suppose remaining travelers will see chauffeured vehicles as relatively affordable? What better way to take the edge off a shared room at the Motel 6 and a meal deal at Subway than a chauffeured vehicle ride to and from the Southwest terminal?
So in the general spirit of volatility and financial lurches, we'll start the New Year off wtih some inflammatory findings and remarks. This could actually save the chauffeured transportation industry some money and needless fretting: Don't let the global warmistas frost your day. Our New Year's wish for this industry is a rational, informed, factual, skeptical, science-based discussion on global warming and exactly what approaches to the issue work. The financial and business stakes are tremendous, given the potential for costly and cumbersome regulations. There's nothing like speaking truth to power. -- M.R.
Did you enjoy your New Year celebrations? Jim Luff got through New Year's eve just fine, but is more than concerned about the drop in business that became obvious in December.
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EXCELLENT EXAMPLE: Here is
recent proof how a chauffeured transportation company can find demand for multiple vehicle niches, and provide needed services. Smaller airports, second-tier resort/vacation cities, areas without adequate public transit -- all need consistent ground transportation in all types of economies. -- M.R.
DIVERSITY: While reading
this news piece on Pittsburgh Transportation Group hiring a new HR manager, it struck me once again how many sizable operators have over the years expanded their fleets beyond chauffeured transportation. And that also means taxis, which is ironic since the taxi industry has been hostile many times to the limo business when it comes to lobbying and pressuring airports and state/municipal bureaucrats to go easy on taxis and take it out on limos. Perhaps this will change that picture long term as taxi companies continue to lose revenue and chauffeured transportation expands. And perhaps the long term growth will be tied into operators becoming transportation companies and not just limo companies. Metro Cars (Taylor, Mich.) and Harrison Global (Waltham, Mass.) operate taxis along with chauffeured vehicles. AFC Corporate Transportation (Houston) has put school buses into its mix. And there are plenty of other operators who are building impressive transportation fleets especially through motorcoaches and shuttle/limo buses. The management duties are similar: hiring and training drivers; financing, maintaining and remarketing fleet vehicles; dealing with licensing and regulation mandates; setting up corporate accounts. Once you get into the transportation business, you can expand those skills and resources into ancillary markets. This could be a way to stabilize revenue and profits during economic downturns. -- J.L.
CHAMELEONS: Major car rental companies like Avis and Hertz are trying out several new outfits. Hertz is checking out
car sharing, and will compete with Zipcar. Avis and Hertz have invested heavily in the U.S. off-airport/local car rental market to compete with the largest rental fleet in the world, Enterprise Rent-A-Car,
as reported recently in LCT Magazine. And what else... hmmm, let's see, did I forget to mention chauffeured transportation? Avis is working closely with WeDriveU to enter major American markets and bypass for-hire licensing fees and regulations. Hertz is pushing Worldwide Executive Limousines in global markets, and is also taking steps to set up operations in the U.S. These are well funded, global competitors for limousine operators to take on, but it's not clear yet whether Avis or Hertz will be successful and choose to stay in this industry.
-- J.L.
CREDIT CRUNCH: The Brits tend to be very enthusiastic about American-style limousines, and strongly embrace the industry. So
this story certainly resonates in the U.S., and points to trouble ahead.
MOTORCOACH MARKETS: The fact that Air Tran is flying into the nation's second country music capital may seem like a plus only for air travelers and airlines alike, but such expanded service to second-tier tourist spots carries a lot of potential for motorcoach operators as well. The more airlines expand into such markets, the more likely its flights can be packaged with comfortable, chauffeured motorcoach tours and transportation service. Towns such as Branson, Mo. lack extensive public transportation, and motorcoaches can provide reliable options beyond just rental cars at a airports.
Example here. -- M.R.
GET READY FOR MORE: Sales, mergers, and acquisitions of limousine and chauffeured transportation companies will become more common throughout 2009.
Sample sale here. This economic trend is being addressed in the January issue of LCT Magazine and no doubt will be discussed at the 2009 International LCT Show in Las Vegas, Nev. Sales and consolidations, however they might temporarily winnow down the industry, can position companies to strengthen for the long haul. -- M.R.
TV STARS: Limousine operators do a ton of charitable volunteer work in this country. They tend to be quite pleased, as do their staff, with reactions they get from community members who adore getting free limo rides. The ABC show "Extreme Makeover: Home Edition" provides you with a very good opportunity to add to an experience that people will love and never forget. You'll feel good about it and many times will get publicity.
Local papers love to cover the stories, and you can mention this in your own company news and websites.
If interested, you can email the show's management. Looking forward to hearing all about it. -- J.L.
COULD BE WORSE: As the Big 3 automakers fail to win federal bailout funds, there's talk that one or more of these companies may declare bankruptcy. GM and Chrysler stressed the point they need immediate funding to stop gap December losses. But if they do declare bankruptcy, it's not the end of the world. It is something
happening in big numbers in the U.S. now for consumers and businesses, but federal judges overseeing bankruptcy cases don't shut the doors overnight. It could very well mean layoffs, revised labor agreements, downsizing production lines, and renegotiating with suppliers. And reinventing their mission statements and business strategies. If your company must consider bankruptcy, it could be worse. -- J.L.
GREEN & LEAN: No two words will better describe the trajectory of chauffeured transportation in the next few years; the combination of green and economic pressures will squeeze operators increasingly toward the motorcoach business.
In fact, this blog entry sums up the advantages and appeal of big buses. While we think counting carbon footprints is silly, the much more substantive reasons for eco-busing stand: reduce consumption of oil, clean up the air, take more vehicles off the road, and promote the safety and ease of group ground transportation.
Look for the private sector to seek out motorcoaches for both corporate and recreational transportation needs. It's cheap, comfortable, and chauffeured. -- M.R.
HAPPY HOLIDAYS: The holiday season is not a good time for corporate business trips; that starts up again in mid-January. Holiday packages are as good as it gets.
Smithson Limousine Service in Des Moines has been doing holiday light tours for the past 20 years. Family and friends love the two-to-three hour rides. A lot of operators market these deals on their websites, and some put out press releases and newsletter announcements, and end up getting publicized in local newspaper coverage. You can expect consumers to spend less this year on holiday tours, just like they're doing at shopping centers, but every dollar counts. -- J.L.
FINE LINE: Should you cut your fuel surcharges now that gasoline is headed well south of $2 per gallon? Will clients resent surcharges in a down economy? Would you be seen as gouging your customers? Or is maintaining a fuel surcharge a way of recouping earlier losses?
These companies, including a limousine operator, are staying the course.
Each operator needs to evaluate fuel surcharges individually, considering markets, revenues, client tolerance, and cash flow. But at some point the question will beckon: When is it time to let it go? Many businesses thrived without fuel surcharges, even when gas was in the $2 to $3 per gallon range. We're entering a dicey business climate that may not be forgiving to fuel surchargers, and consumer backlashes can be quick and brutal. Remember the lessons about greed that the current economy is teaching. Pay attention. -- M.R.
ONE DAY AT A TIME: Day trips by bus are a good source of revenue, according to a
study by DePaul University. Charter and tour bus trips usually cover weekends or longer, but intercity day trips are a growing market factor. Soaring gas prices motivated the consumer surge, but enough of them truly enjoyed the luxury experience to continue booking rides, according to ABA. Intercity trips can be marketed to both retail and corporate customers - wine tours, historic city sites, sporting and concert events, company meetings - all of these can happen in one day and can lead to more group travel and event reservations.
SO SHOULD YOU? With gas now below $2 per gallon -- even in California -- c'mon, do you really need the fuel surcharges?
This cab service, doesn't. Discounting and special deals may not be the preferred image of luxury transporation, but they sure are the buzzwords for the consumer economy of 2009. That applies to chauffeured transportation, too. With gas below $2 per gallon, we are now back to 2005 pricing levels. Were many operators levying fuel surchages back then? -- M.R.
AHH... MEMORIES: Holidays bring up both stress and joy for Jim Luff, plus a great opportunity to give thanks and gratitude to employees.
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BUS BONANZA: Package tours and trips are an important way to build bus business. If you're going to spend $400,000 plus on a new motorcoach, the vehicle needs to be utilized at a strong enough rate to cover costs and build profits. Setting up corporate employee commutes is very good, and working road trips, and company special events. To succeed, building good retail business helps accomplish goals, as
Reston Limousine has learned. Reston sends out attractive email promos all the time to highlights its New York shopping extravaganza and other exciting trips. -- J.L.
GREEN IMAGE: Why are
Big 3 CEOs riding in hybrids to lobby for federal loans, instead of private jets or non-hybrid luxury cars? It's all about putting out the right image. Automakers need federal funding, and have come back for round two of lobbying efforts - and want to avoid criticism for the image they're projecting. Corporate execs learned this lesson in recent years and have been switching out of stretches and into sedans and SUVs. Having hybrids and other alternative-fuel vehicles ready for executive transportation continues to provide revenue opportunity. High-level execs still need to be chauffeured, and want to look good when stepping out. -- J.L.
SIGN OF THE TIMES? For all the talk of consumer cutbacks, we are intrigued by
this motorcoach trend. It seems there is still a healthy market for luxury, RV-style, customized motorcoach buses. This seems like a logical niche within luxury transportation. While RVs obviously are not chauffeured, we can think of endless configurations of luxury motorcoaches that could be, with the "rock star" bus being the most prominent example. Why be confined to small to medium party buses, when the next size up offers so much potential? -- M.R.
CORE STRATEGIES: The limousine and chauffeured transportation industry, at its heart, is a premium, luxury-oriented service. So there is always a segment of clientele that for all practical purposes is recession-proof. Whatever financial hits they take, the losses won't impinge on lifestyle. Since luxury transportation closely tracks luxury goods consumption, operators should note the latest marketing trends among upper-end retailers who cater to the wealthy. Just as these retailers are fawning over their core demographic to keep them spending, many luxury transportation operators may well consider the same. Reaching out with special promotional events, giveaways, packages, and "buzzy" tactics, may be one worthwhile strategy to cover the core clients and get through this recession. -- M.R.
FLAIR FOR LIMOS: With the overdose of bad news about the economy and struggling operators, we at LCT are always looking out for the positive glimpses of this industry , and today, we found one. This Tampa Bay operator brings a wholesome, community-minded approach to his work, and can serve as an inspiration to others in the chauffeured transportation industry. Success can happen anywhere, during any time, and depends more on attitude than anything else. -- M.R.
CLEAN BUSING: Mountainbikers, hikers, and outdoor recreationists are a potential new market for greener livery, given the growing popularity of eco-vacations and eco-tours among members of Gens X and Y. One
Colorado operator has capitalized on connecting clean ground transportation with the even cleaner pursuits of biking and hiking. -- M.R.
DYNASTY LIMOUSINE: One of the finalists in the LCT Operator of the Year category for 11-30 vehicles category provides us with an
industry bright spot amid a faltering economy and battered transportation sector. The Jacksonville, Fla.-based operator has seen revenues and profits actually increase. We emphasize that amid any general trend, there are plenty of exceptions. LCT has heard from enough operators anecdotally nationwide to conclude there are more than a handful of chauffeured transportation companies experiencing a 1999 business atmosphere instead of the 2009 gloomosphere. Using the right tools, strategies, messages, and innovations often can circumvent or at least hedge against countervailing economic forces. -- M.R.
MY HOW THINGS CHANGE: The
Los Angeles Auto Show is considered the first major auto industry event for the new model year. It used to be in January, but ever since being moved to November, it's competed less with auto shows in Detroit and New York and has provided a first-look at cool new stuff. The irony this year is that GM and Chrysler gave it a thumbs down, and Ford was the only Big 3 manufacturer to attend and show its cars. The Detroit automakers must keep their costs well trimmed, so it's not surprising they stayed home. Another interesting part of the L.A. Auto Show is the central focus on green, altnernative-fuel vehicles, even as auto sales plummet down and gas prices go the same route. -- J.L.
PRIME MARKET: A Los Angeles-area shuttle service is offering door-to-door family rates for clients heading to the airport. Can the
same concept work for luxury chauffeured transportation? As consumers look for value and lower costs, an all inclusive rate may help invite more business. Such strategic pricing for specific market segments is one way to keep the revenue flowing during a recession. Many people are holding on and saving not because they have lost a job or a home, but out of fear. So give them a worthwhile reason to spend. -- M.R.
FUEL FREEFALL: Who would have thought that gas prices would fall about as fast as they rose last spring and summer. The cynical wisdom maintains that gas prices always rise faster, and fall slower. This time around, with the economy tanking, it doesn't look like gas prices are taking their time to drop.
This limousine operator has dropped her $25 fuel surcharges. This may make good business sense, now that gas averages more than $2 per gallon LESS than in June/July. As consumers tighten spending, you never want to give them a reason to justify holding back. Look for more fuel surcharges to become de facto rebates. -- M.R.
GOBBLE, GOBBLE: Jackson Limousine Service is giving away 10,000 free turkeys and fixings to low-income Los Angeles residents. And getting coverage on
NBC's local TV station. How much does that cost him compared to buying a TV commercial and an online advertisement? -- J.L.
TOUCHDOWN!: Transporting professional athletes, coaches, and managers is a great way to build profitable business in your market. Just ask
Partners Executive Transportation, which has done well through its New York Yankees contract. And it's not just famous football, baseball, and basketball teams that need chauffeured rides -
hockey teams, soccer teams, golf tournaments, and then there's women's professional sports leagues. Networking with major
sports marketing companies like
IMG helps build relationships with decision makers. Check it out - could be a win win win project.
RAIDING THE CUPBOARD: In an economic downturn, every little marketing idea or possibility helps. For operators, here is another potential limousine market:
Govenrments trying to lure businesses. Along with real estate agents taking clients on tours of foreclosed homes, local Chambers of Commerce, county governments, and state business groups may be eager to impress potential business relocators. As is often the case in a recession, businesses start eyeballing lower tax and regulatory climates, and may consider moving to states more hospitable to business. If you operate in such a state, be on the lookout for organizations that want to impress business owners with limo tours. -- M.R.
WORLDWIDE SLUMP: One silver lining of 2008 for chauffeured transportation had been the weaker dollar, which, while contributing to inflation and high commodity prices, kept exports strong and international travelers coming to the U.S. Now, the economic infection has
spread around the globe. It's all the more reason to emphasize viable, feasible ground transportation services, i.e. GET ON THE BUS. -- M.R.
BENEFITS OF BUSING: Charter and tour bus rides have been increasing in this country and should continue to do so next year, according to a
report released by the American Bus Association. Why is the industry's revenue growing even though economic conditions are poor? Part of the customer demand this year came from high fuel prices and concern over green issues. Yet even with declining gas prices, things continue to look good for the industry. The report cites a Travel Industry Association study showing that 41 million Americans chose not to take airline flights over a recent 12-month period simply because of expected hassles associated with flying; consumers want to have transportation options. And nightmare gridlock in many highly trafficked corridors, particularly in the Northeast and on the West Coast, created an opportunity for motorcoaches. All of this is good news for operators who are building up their bus fleets.
MIXED BAG: A chauffeur's life is exciting, glamorous, boring, and unhealthy, Jim Luff says, based on his own experience.
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TOUGH CALL: An event planner in San Diego asked me the other day why operator fuel surcharges haven't dropped recently along with gas prices. I didn't know the answer.
A TV news story from Bakersfield, Calif., made me think of this incident once again - Vintage Limousine told the reporter they're spending less on gasoline but fuel surcharges will remain the same and the company will offer customers discount specials. Experts in the fuel business expect oil prices to go back up again, but for now, they're in a downward slide. So, the question remains: What to do about your customer fuel surcharges? -- J.L.
PANIC BUTTON: GM faces the most critical make-or-break moment in its company history. Click below to read more about its latest letter to America and the debate over bankruptcies and bailouts. . .
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WORKING & NETWORKING: Read all about J. Howard Frisk, an operator with 32 years in this business and 85 vehicles, based in Springfield, Mo. (also the home of a few coachbuilders). Frisk regularly puts in very long days from early morning well into the evening. If fact, you can
read a timetable from one of his typical days, which started out with a 6:30 a.m. executive breakfast meeting and wrapped up after attending a fundraiser. Frisk
sits on the boards or committees of more than 25 community and industry organizations. All of this may sound quite extreme, but it is actually close to the norm for many operators. To be in this business, you've got to love talking to other business people, and spend much of your life networking and promoting your business.Years later, this man seems to be happy where he is.
OUTLOOK: Corporate business travel is taking a big hit, with companies looking to save money any which way. See MSNBC Report. We would caution against overzealous corporate travel cuts. Three points to consider:
1) Face to face meetings are more productive than teleconferences: Notice how everyone e-mails, instant messages, and surfs the Net while teleconferencing? People pay attention more when there's face time. It's harder to plug in elsewhere when seated around a conference table with everyone watching.
2) Also, we are horrified at how some companies are asking employees to double up in rooms. This is an outrage. If you, as a company owner, can't afford two hotel rooms, then dont send two people. Professional business travel is not a high school band road trip with everyone bunking in everyone else's rooms. Employees should collectively refuse the "bunk up" mentality. What cheapskates. However, we at LCT have no gripe with corporate travelers "bunking up" for limousine and livery ground transportation. No sense in two people riding in two separate Town Cars. Two or more people in a black luxury vehicle also renders that vehicle very green, indeed.
3) Getting on the road for conferences, trade shows, and meetings actually can be a mental break for employees and managers; something about a new environment that fuels creativity and motivation. Of course, the hotel room needs to be comfortable (Courtyard, Hampton Inn at least), and the ground transportation should be chauffeured. We insist. -- M.R.
STILL GREEN: The "green" movement is not going away, even as the recession deepens and gasoline prices continue dropping. Corporate accounts are pushing less for hybrids and alternative-fuel vehicles, but it's not going away. In fact, the green movement is expected to be an expanding part of the U.S. economy that will add jobs, technology, and innovative services while other industries slide downward. This will come through greening up buildings and houses, C02 reduction programs, recycling programs, and more green vehicle options. General Motors is basing much of its future on hybrids (especially Chevrolet Volt) and other alt-fuel models, and this is the case with other major manufacturers. In this industry, operators continue to launch green programs, comply with corporate client requests, and learn more about how it all works. Take a look at the
Hybrid Limo Express website. This operator went into business in 2007 and was ready to be there for the New York City Taxi & Limousine Commission's black car MPG mandate in early 2008. Hybrid Limo Express has established itself as NYC’s largest fleet of hybrid vehicles (200), comprised of hybrid Lexus RX400s, Toyota Camrys, and Toyota Highlanders, according to the company. And there are other operators continuing to do quite well during the economic downturn. It's a valuable market niche that faces economic challenges like everything else, but will be alive and well going forward.
- Jon LeSage
MOVIN' ON: Moving from one office location to another is a big deal for business owners. In chauffeured transportation, it boils down to having enough parking spaces for fleet vehicles and employee parking, having a good amount of office space for desks, meeting rooms, and storage, and being centered in the right place for most of the trips you take. That could be near the major airport, or close to key highway off ramps. It also has to do with where your staff lives - you don't want them to resent long commutes every day. For Drivers Unlimited Inc., based in Darien, Conn.,
moving its headquarters came down to finding the best possible location for meeting all these priorities. And moving to a new company office is usually a good sign that the business is growing.
DOOM, GLOOM, & BLOOM: Not all operators and companies are sustaining losses in this economy on a cliff.
Individual states, cities, and regions form their own economic micro-markets with varying levels of employment, business activity, and capital investment.
One St. Louis operator is seeing record revenues, based partially at least on a Hummer limousine. So the bottom line is that a magic formula for surviving a recession is a myth.
It boils down to how each company handles its own unique set of circumstances. -- M.R.
NAME BRANDING: Building an effective company brand name is not easy. There are legal issues involved in trademark laws and corporate identity practices, and there are practical issues in establishing an effective, well remembered name. In chauffeured transportation, there are a lot of locally known company names that are sometimes identical or close to other operators in another part of the country. This can be a real problem when a competitor has that company name trademarked and wants to protect its company name in court. A less legally troubling problem is changing your company name inconsistently and confusing your customers. You may have added the words "worldwide," or "global," or "transportation," or something else to your website, but you still have the old company name everywhere else. And then you might change the name again in six months, further confusing people.
Here are a few articles to review that offer guidance on protecting your business name:
Business Name Registration
Picking the Perfect Name for your Corporation
How to Name Your Business
ROLLING RICHES:
With chauffeured transportation so focused on being finicky and frugal, we believe the times are ripe for a backlash demand to emerge for blatant luxury and excess. It can be good for the financial soul in set doses.
This $600,000 Rolls-Royce stretch makes the ultimate statement on behalf of classy comfort and premium brands. We would marvel at any operator who can make this stretch a profit center unto itself.
But you may have to start out looking for clients in the global gold-spot of Dubai of Arabia, where wealth cannot be spread any further because everyone is neck-deep in it. -- M.R.
SUFFERING SQUEEZES: Independent small businesses -- the bulk of the chauffeured transportation industry -- are facing many obstacles, including fewer credit and capital opportunities and declining payrolls amid the troubled economy. STORY HERE. If there is one sector of the economy that deserves more attention, protection, investment, and bailout safety nets than the bungling brats of Wall Street , it is the vast layer of small busiensses that undergird our economy and employ most private sector workers (You know, those of us and our companies who pay the bulk of the taxes that funds the public sector, including the sugar-babied government workers in California who get to retire after 30 years @ 90% pay until death) . Let us hope the incoming political claque has enough sense to exempt such businesses from heavy-handed regulation and additional taxation. Small businesses are the real Golden Goose of our economy. -- M.R.
TEMPLATE FOR FUTURE COMPANIES? London-based
EcoChauffeur was profiled recently in the
Times of London. While the concept of green remains relatively undefined and highly subjective, companies like this one are making attempts to transform and adapt. But the question the chauffeured transportation industry eventually must define and answer with clarity is: When is an operator green enough? What is the future gold standard? What level of carbon emissions is the right balance? There is a perpetual aura of insatiability among environmentalists, with their doomsday warnings and strict demands. Businesses in all industries should be aware of that and take care they don't become enslaved to ever-shifting ground rules and goal posts. -- M.R.
CHRISTMAS PARTIES: We are optimistic in that we believe the Christmas spirit will survive the recession, and with that, most workplace and private holiday parties. What does that mean for revenue-strapped operators?
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"People say there is a recession, but I took in $10,000 in new business Monday in Bakersfield, Calif.," says Jim Luff. Read on to hear his story.
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THEY KEEP GOING AND GOING. . . As fuel prices reached the sratosphere this summer, gleeful detractors of the SUV started writing its obituary. While new SUV sales have declined, the number on the road has not, as
this study shows. Despite all the hand-wringing about global warming and going green, Americans, by golly, still like their C&Cs: Comforts and conveniences. As anyone who has owned or leased an SUV will tell you, the vehicles may be bulky but they are so practical and user-friendly. Of course, that's why SUVs have succeeded spectacularly in the chauffeured transportation market; they blend in to traffic while accommodating every possible luxury amenity. And if you can make them go green by sacrificing nothing, so much the better. Don't let the latest hip political chatter about shared sacrifice fool you. SUV users and drivers owe nothing to anyone. Operators need not feel obligated to compromise the feasibility of SUV transportation in the name of sharing wealth. -- M.R.
ACTIONS & CONSEQUENCES: The electorate sent an irrefutable message last night, one that should be heeded and respected. While jubilation prevails, the accompanying relief and optimism did not extend to the post-election spasms of Wall Street. Some realities are solidly established as well: 1) After Jan. 20, we will not have a government divided between two parties -- the situation that prevailed for much of the 1990s and aided the prosperity boom; 2) All levers of government now reside in the hands of one sheriff in town, and whatever happens, there will be no more excuses about lack of power to accomplish goals given the hefty Congressional majorities; 3) Blame will be very easy to assess and assign should anything go wrong.
For chauffeured transportation, the most immediate concerns include the union-backed card-check legislation that could hamstring and eventually decimate some operators. An escalating recession likely will continue to stymie customer demand. New transportation regulations could add to the cost of doing business. That all may sound pessimistic, but so far, the pessimists have been accurate, however unwelcome their messages. Silver linings do always emerge, and creative entrepreneurs reflexively think, work, and succeed outside the box regardless of circumstances. And that is the real source of hope and change. -- M.R.
THANKS-FOR-GIVING US BUSINESS: As we've posted many times this year, another operator received very positive media coverage for doing charitable work in the community. Tempe, Ariz.-based Aloha Limousine
will be giving out 50-to-100 Thanksgiving dinner kits. Local residents are asked to contribute food for the program and then will be eligible to win a freebie three-hour limo ride. Locals can drop by the Aloha office, call them, or visit the website. Very nice - they contribute yummy Thanksgiving meals, meet new customers, and improve their name in the city.
SLIVER OF A SILVER LINING? Chauffeured operators are looking for any sliver of good news amid a declining economy and falling reveneues. Well, we found one:
international tourists. American visa rules have been loosened this year and foreign tourism is up. Global visitors tend to spend more amid the dazzling distractions and amenities of America. Some of that travel budget should be going toward chauffeured transportation. Americans may be staying at home and cutting back, but many visitors from around the globe could provide a market opp for much needed revenues. -- M.R.
ELECTION DAY OPPS: At LCT Magazine, we sure have had our fill of limousine poles, especially with our attempts to document the latest trends in party buses (see September issue). And while you can certainly argue that party poles on limo buses provide a valued public service to our highly-mobile, entertainment-oriented, consumerist democracy, the types of polls that will predominate on Nov. 4 can offer operators a patriotic marketing idea. If business is slow and you are looking for a good cause, taking people who need rides to the polls looks like a worthwhile way to build community good will. There are likely senior citizens, single mothers, and people without cars who could use a ride. And you never know, depending on which candidate wins, supporters of the winner may be open to the idea of renting a limousine or party bus to celebrate in the election aftermath. So throw a little red, white, and blue into the limo, and be thankful our nation still values the privilege to vote and the freedom needed to succeed as an independent business. -- M.R.
FREAKY FRIDAY: Yes, it's that horrifying holiday.
USA Today writers used this opportunity to detail some of their tricky, terrifying travel experiences this year. Airlines have been cutting too many flights... NOOOO!!!!... Flights are being rerouted.... ARRRGGGHHHH!!!!... One travel writer had to stay in a small, grim room with bad carpeting.... YIKES!!!! There were also travel treats for this group. Read on. Be afraid. Be very afraid.
WHAT'S NEXT? As I finished editing an article on van pools coming out in LCT's December issue, I thought about discussions I've had with operators in the past few months. For van pools, the issue is that luxury chauffeured transportation is not a hot commodity for corporations and government agencies using these services. They might not be willing to pay more for a plush van and a chauffeur. My thought: maybe this isn't such as a bad situation. There are many operators around the country who've grown and added subsidiaries in all scopes of transportation, and this includes ambulences, school buses, moving trucks, "black cars," and taxis. Yes, I said it: taxis. These operators are becoming large ground transportation companies. They also provide classic luxury chauffeured services, but can basically service any needed transportation in their market area. As the economy sours, it's important to look at viable options for your company. Van pools might be a good move to make, but it might require flexibility on your part.
-- Jon LeSage
LODGING LOGIC: Where have you hired your latest operations manager, general manager, vice president, etc.? Did he/she come from a competitor? This happens all the time and sometimes works out very well, and sometimes not so swell. For
LEADER Worldwide Chauffeured Services, hiring a new president/general manager with years of experience at Ritz Carlton has made a lot of sense. Company chief exec Bruce Heinrich has his own background experience with this five star hotel chain, and the two probably worked together in the past. Hotel experience makes a lot of sense for entering chauffeured transportation. You've spent years providing service to wealthy and well-off customers, you must deal with customer service pressure and problems, staff turnovers happen all the time, and building an excellent brand is essential for growth and profitability. Offering ancillary services is also part of the equation, and these customers will gladly pay for them if they feel spoiled by the luxury experience. Keep your eyes open: you may already have contacts at hotels who could work out beautifully in your management team.
CLIENT OPPS: If George Jacobs, CEO of Windy City Limousine of Chicago, can promote the funeral industry as a recession-era opportunity for chauffeured operators, then we can certainly throw it all to the dogs as well. Jacobs encouraged operators to look for funeral home business during his speech at the Limousine Digest Show in Atlantic City, N.J. last week.
Dogs and dead people tend to be recession proof. Dog-lovers will do anyting for their pets -- in upturns and downturns. Pet-related purchases involve more emotion and impulse than most consumer retail decisions -- even choosing a casket and funeral arrangements.
And given the perponderance of pet pampering in a still relatively prosperous America, why not market to those dog and cat owners who spoil their pets? We now have pet salons, hotels, gift shops, bakeries, grooming and fitness services. . . why not dog-centric limousine services for pet and owner? In fact, co-marketing your livery services with veterinarian hospitals and practices can bring you repeat business. What better way to blunt the trauma of pet surgery than to offer limousine service to both pet and owner. After all, if a doggie luxury hotel with chauffeured services can make it, so can pet limos. -- M.R.
LIMOUSINE DIGEST SHOW: Say, what? Limousine Digest mentioned on an LCT blog? Call it the unthinkable, but LCT Editor Martin Romjue traversed the annual trade show and conference at the Trump Taj Mahal in Atlantic City, N.J. this week. While the two trades have been swapping complimentary staff convention passes for years, neither tends to write about the other. Let's just say LCT Magazine is secure enough in its limousculinity to take a risk and report on its competitor's show. . .
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FOR HIRE: The Baby Boomer generation started turning 60 two years ago
when the U.S. Census Bureau estimated that 7,918 of them were turning that age each day. They're obviously a great revenue source for operators, as these Americans have more expendable cash, more time on their hands, and usually
have kids who are growing up and needing transportation. Now that the Year One boomers are 62 and getting closer to retirement, you should also think about this community being an important source for chauffeur hiring. As we've seen lately in the news, retirees (and those soon to be) are stressed out to the max as they watch the value of their 401ks and IRAs dropping way down. They need to make money, even if it's part-time work. Most operators have excellent chauffeurs who are in that age range, sometimes a few years older. As long as they retain their health and driver safety, aging boomers are probably the best source of strong chauffeur candidates to cultivate.
-- Jon LeSage
SCARY LIVERY & TOWN CAR TERROR! What happens after you’ve just stepped into a Town Car, the doors have clicked to locked, the chauffeur starts driving. . . and then he tells you he’s angry, you are his last run, and he will quit his company that night? LCT Editor Martin Romjue recounts his nerve-jiggling experience with a farm-out that went up in flames, or better yet, a. . . . Chauffeur On The Edge!
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If you've ever called Jim Luff on a Monday and then wondered why he didn't pick up or get back to you right away, don't take it personally. There are reasons for such behavior.
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California's housing market conditions have been one of the starting points for national, and then global, financial and credit market collapses, according to economic analysts. The
Wall Street Journal just published a story analyzing the situation - it might be the beginning of a positive economic trend: "While the volume of existing-home sales across the U.S. fell 10.7% in August from the previous year, according to the National Association of Realtors, there are signs that the most damaged of markets are starting to heal themselves. Across hard-hit California, sales volumes rose 65% in September compared with a year ago, said MDA DataQuick, a San Diego-based real-estate information service."
On the other side of the coin, market conditions are still very unstable. The drastic drop in home prices in some California markets mean several homeowners are upside down in their loans, which moves them toward foreclosing their mortgages. The problem isn't solved yet, but it may have hit bottom and start stabilizing. Let's hope for the best.
ANOTHER REASON TO VISIT: The U.S. is allowing international visitors to enter the country up to 90 days without a visa
under a new program. This is yet another reason for foreign travelers to visit America; the major reason being the increased value of their currency over the dollar. So, marketing to international visitors offers you another market segment that could increase during a time when others are decreasing. Setting up affiliate relationships with operators in Europe and other regions of the world can facilitate this market growth.
CUSTOMER CONFLICT: It's not an easy time for operators, especially those in hurricane zones or dealing with corporate clients going out of business. Unfortunately, there's a more regular, routine problem that comes up: dealing with unruly, violent customers. Two stories were posted with this sad tale - one in
Toronto and one in
Daytona Beach. Why is it that an industry that provides such a high level of service gets dragged into these messes? Passenger alcohol and drug overuse is part of it, along with powder keg problems in major cities. Many chauffeured companies do what they can to subvert or stop these fights through chauffeur training, dispatcher communications, law enforcement agency relationships, and vehicle security equipment.
The National Business Travel Association has surveyed travel managers on how they're dealing with the global credit crunch. Travel is being cutback, but it's good to know how this is being done and what chauffeured companies can do to adapt.
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Retirement centers are good place to offer your services. Many facilities around the country
are now offering chauffeured services. As Baby Boomers make it to 60 years old and beyond, the market will be growing along the need for more professional transportation. It's a great opportunity to combine added revenue with providing needed service to your community.
The limousine industry became an actual industry in the 1970s/1980s, and before that it was limited to presidents, kings and queens, statesmen, movie/rock stars, and the very wealthy. Car collectors enjoy viewing and riding in classics such as
Woodrow Wilson's Pierce-Arrow, which is pictured at the left. Mercedes-Benz has lately been promoting its new S600 Pullman state limousine.
Queen Elizabeth II used to ride around in this elegant car. Elegant limousines will always be used by the rich, famous, and powerful, even as businessmen shy away from stretches and ask for executive vans, SUVs, and sedans.
With American, Continental, and Delta reporting Q3 losses, airlines are
analyzing corporate markets to see which way the wind may blow in the next quarter. For Continental, energy companies are continuing to travel, the auto industry has plunged downwards, and pharmaceuticals are expected to reduce slightly next year. American Airlines says that New York, the epicenter of financial markets, has been the hardest hit region. This is yet another development that points the way toward chauffeured transportation companies convincing corporate clients and prospects that ground transportation offers them advantages over air travel. They still need to take business trips, and if they're thinking about traveling 100 to 250 miles from their offices, ground transportation is the way to go, especially for group trips.
OIL PRICES PLUMMET: The one redeeming factor in the economic contraction is a steep downturn in oil and gas prices, which are the primary drivers of inflation. UPDATE HERE. While the U.S. may be suffering stock and job market losses, at least we're all paying less for gas and dealing with lighter inflationary pressures. That can only be a silver lining for operators, many of whom are seeing fewer client runs. At least the gas won't cost as much. But don't get rid of that fuel surcharge just yet. A percentage drop, though, might be a nod in the right direction. -- M.R.
TRAVELING MERCIES: Given the declining economy and airline hassles, the stress level for the typical business traveler has skyrocketed.
NY Times story here. Imagine this scenairo: Hearing that your flight