Industry Research

Tech, Human Connections Drive More Business

Posted on May 13, 2016 by - Also by this author

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LAS VEGAS, Nev. — In an industry disrupted by technology and TNCs, the true hope for success lies in closer client connections made possible by constantly improving service, applying new technologies, and making the most of social media and websites, two State of the Industry speakers told attendees Feb. 29.

The first speaker, LCT Publisher and Show Chair Sara Eastwood-Richardson, noted all the changes in the last decade, except one. “We’ve been in a paradigm shift ever since resurging from the Great Recession,” Sara said.

“Our service models have changed. Our client books have changed. Our operating systems have changed. Our fleet vehicles have changed. Our competitive landscape has changed. As I step back and look at what we were all about 10 years ago, I ask, ‘What hasn’t changed?’ I’ll tell you: I’m looking around the room and I’m seeing you are still here, and new operators keeping coming. That has not changed.”

Sara’s presentation outlined a slew of hopeful statistics, as well as a few highlights here:

  • The industry’s primary source of revenue is the business travel sector, with 80% of the business travel spend consisting of airport runs. More airline passengers are expected over the next two decades. The International Air Transport Association released a 20-year passenger growth forecast which predicts a 4% average annual growth in air travel demand. By 2034, total passengers are expected to reach 7.3 billion.
  • Looking at global trends, the Global Business Travel Association’s annual forecast predicts global business travel spending will hit a record $1.25 trillion in 2015. While final numbers are still being calculated, that represents 6.5% growth compared to 2014. Growth will remain strong through 2019, with business travel projected to grow 6.9% in 2016, 6% in 2017, 6.4% in 2018, and 5.8% in 2019.

Operator Troubles
Sara also summed up other trends and important industry concerns:

  • The spread of apps and proprietary apps for use by affiliates is causing confusion among operators on what to use. 
  • Insurance costs are rising, but more importantly, the non-renewal rate has soared with many operators finding their carriers no longer insuring party buses. Major players such as Zurich have paid out so many catastrophic claims from party bus injuries they have grown shy of the risk.
  • Thanks to the onslaught of Uber driver disasters, passenger security is now top of mind. If you have not invested in a driver background check program at your company, you should make that a priority now.
  • Many operators are transitioning from sedans in favor of SUVs that can function as either and have extra cargo space and seating.
  • Vans such as Sprinters continue to eclipse the stretch as the way for groups of eight to 10 to travel in luxury.
  • Videos have increased in popularity in websites and social media. Those not using video will be left behind.

Topic A
No State of the Industry would be complete unless addressing the No. 1 issue of the last several years. As Sara put it, “As for Uber? As the Arabian Proverb states, ‘Arrogance diminishes wisdom.’ Arrogance is a formula for leadership failure. The history books are filled with fallen companies run amok by arrogant leadership. While Travis Kalanik is eying a future using autonomous vehicles, he still has to survive the road to getting there. That road is filled with speed bumps.”

Sara cited the challenges of Uber’s background checks for drivers being under serious scrutiny; the growing number of people who don’t feel safe using Uber; expanded laws and law enforcement stopping or slowing Uber; Uber’s crazy methods of playing with you, such as adding $1 to the fare to ensure Uber places you with a “safe” driver; and lawsuits.

“Not only is there a pending class action against Uber for their ‘independent’ status, but Uber is being sued everywhere by victims of driver crimes, for misleading clients about its safety procedures, for failing to submit mileage tracking technology for review, and for drop-offs and pick-ups at airports without airport approval.”

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