Industry Research

State Of The Industry: Take A Deep Breath

Posted on January 29, 2009 by LCT Staff - Also by this author - About the author

LAS VEGAS — The economy sucks, but you don’t need to jump off a bridge.

Dav El CEO Scott Solombrino offered that blunt assessment during his State of the Industry speech Monday to operators shell-shocked by a steep dropoff in business revenues during 4Q 2008. Some are reporting declines of 30% to 40%, and must slash vehicles and employees.

Solombrino — whose animated, combustible speeches range from humorous commandante-style harangues to sharp-witted ripostes — provided some levity and perspective for befuddled business owners trying to make sense of a chaotic economy.

He started with a somber powerpoint display of doomsday 2008 headlines buffeted by the mournful female wails of New Age dance club music to illustrate the media hysteria that has fueled much of the fear and panic.

“I don’t buy that we are headed into a Depression,” Solombrino said. “The media is not being completely accurate.”

Solombrino drew upon economic statistics comparing the 1981-82 recession to the current state; unemployment, inflation, interest rates, and 30-year mortgages were often two and three times higher then than today.

“If this were a depression, none of you would be here. This place would be dark, closed down, and mothballed,” Solombrino said of the Venetian and Palazzo resort and casino complexes. “But the casinos are full, people are shopping; there might not may be as many, but Vegas is in business,” Solombrino told a ballroom full of operators.

Solombrino pointed out some silver linings:

• This is now an employer’s market, and gives chauffeured transportation companies a chance to weed out bad eggs: “We are no longer held hostage by crazy employees.”

• Wall Street never learns its lessons and has a collective short memory. Since they constantly repeat history, Wall Street will once again embrace limousines and chauffeured vehicles.

• Politicians and presidents lie. So Obama likely is lying when he says he will push for the destructive union-driven card check legislation, depriving American workers of the democratic privilege of secret-ballot elections on whether to unionize. Such legislation could make chauffeured transportation financially unviable.

• President Obama will contain the most leftist elements of his political machine. He will put his “wacky lefty supporters” into a little box and then “every once in a while take one out, raise a tax to please him, and then put him back into the box.”

• Chauffeured transportation must figure how to benefit from the “$2 trillion in stimulus sliding out the door” by seeing if companies can get any credits or tax reductions for buying and/or using green vehicles.

• That same stimulus eventually will trigger at least some economic activity that will redound to the industry.

Look for more of Solombrino’s State of the Industry presentation in the April issue of LCT Magazine.

Source: Martin Romjue, LCT Magazine

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