Sorry for the long silence but Limousine Excursions has been busy trying to keep our heads above water, figuratively and literally.
While summer is in full swing in the U.S. with limousine operators at the peak of high season, it is the polar opposite Down Under. Winter is here with a vengeance and with it has come the implosion of the Perth limousine industry!
As I mentioned in previous updates, the local industry has been flooded with stretch limousines. There are about 44 Chrysler 300C stretch limousines trying to rival the 19 larger 12-to-16 passenger stretch limousines. The instability of rates during the past 12 months has really taken a toll. Six limousines companies are up for sale! If I believe all the rumours going around during the last two weeks, there are several others on the verge of “chucking it all in.”
I will be honest and say this past year has not been easy and it looks like our winter season will be brutal. We started June, the last month of the fiscal year, with absolutely no bookings! Half way through May, the phone just stopped ringing. Email inquiries went down 60%. It was as of we were having a black out. (Technically, we did as May-June had the coldest, wettest month on record. No one wanted to be out in the rain. Not even the poor Kangaroos!)
Our participation in one of the largest Wedding Expos on June 11-12 pulled us out of the weeds and we were able to meet our expenses for the month. July and August doesn’t look like it’s going to be any easier, but who said owning a business was going to be a piece of cake, right?
We ended our fiscal year on June 30 a little better than projected, considering all that has transpired. We forecasted at the close of the third quarter we would end the year with a 38% drop in sales. Our fourth quarter turned out better than expected due to school balls and we managed to end the year 27% behind last year’s sales — still a significant hit though.
On an interesting side note, we have been contacted by two of the six companies who are up for sale. One proposal we are negotiating would have us merge with one of the companies. We would take over the daily management of the business and the current owner would become more of a silent partner. This opportunity would more than double the size of our fleet with no capital outlay required by us.
This proposal could easily see Limousine Excursions meet or beat the growth of our fellow Great Race Competitors without having to match their level of debt or outlay of money. As tempting as this would be, the best business decision may be for us to just sit tight and see how this all plays out over the next three months. It will be interesting to see who is left standing when winter ends and the fresh breath of spring arrives in September.
As this race is approaching the finish line within the next couple of weeks, I say to my fellow competitors, we may be Down Under but we’re not done yet! I hope this update finds everyone happy, healthy and having a prosperous summer!
| posted on Thursday, July 14, 2011 4:55 PM