Industry Research


Posted on August 26, 2009 by LCT Staff - Also by this author - About the author

SAN DIEGO — Among the hundreds of exhibitors at the largest business travel trade show worldwide, about 25 chauffeured transportation operators were hanging tough amid one of the sharpest and most prolonged downturns in the industry.

Reports of 20-40% revenue declines are a foregone conclusion, as operators interviewed talked of having to hustle harder for corporate travel contracts and come up with new ways of doing business.

Major operators at the show included: Dav El, EmpireCLS, BostonCoach, Carey, Commonwealth Worldwide, Flyte Tyme, Music Express, Bauer’s, Sunny’s, London Town Cars, Harrison Global, Leros Point to Point,, ABC Chauffeured Limos & Sedans, and Virgin Limousines.

Among smaller operators taking out booth space: La Costa Limousine of Carlsbad, CA, and Sterling Rose Transportation of Temecula, CA.

Exhibitors reported light attendance on Monday; a noticeable pick-up on Tuesday, which featured luncheon speaker Jay Leno just before trade show doors opened at 2:30 p.m.

Cheryl Berkman, owner/CEO of Los Angeles-based Music Express, mingled with clients and staff at the storied operator’s leather living room set and show display. She clearly had the demeanor of an industry veteran who has seen this rodeo before Music Express, with company owned operations in Los Angeles, San Francisco, New York, and Washington, D.C., has had to adjust to this recession as it did to several others in its 35-year history, Berkman said. She said the company is in a strong position to grab hold of the rebound since the downturn has forced it to closely focus on developing its most successful components.

One prominent industry executive explained on background that an industry bottom has been hit and a turnaround is in the works, but the recovery will happen without any upward pressure on pricing. That means operators will get more business at recession-level margins, continuing the revenue squeeze for many operators. This executive said such pressure will likely lead to mergers, consolidations, sales, and/or buyouts as remaining players position themselves to survive. He doubted next year’s NBTA line-up would feature exactly the same mix of chauffeured transportation companies. The chauffeured transportation “system” still has too much inventory and an oversupply of service, the executive said, and that needs to work itself out.

Dawson Rutter, CEO of Boston-based Commonwealth Worldwide Chauffeured Transportation, has downsized his fleet to about 170 vehicles but remains one of the top chauffeured providers in Boston and New York City, reporting a leading client count at Boston’s Logan International Airport and within Manhattan -- the ground zero of the financial meltdown and shifts in business travel policies for executives.

While circling his display near the trade show entrance, which featured a Cadillac Escalade, Dav El’s Scott Solombrino appeared the most optimistic in many months, commenting that the industry has turned the corner and “it’s going to be coming back again.”

More NBTA coverage and comments from exhibiting operators in the October issue of LCT Magazine.

Source: Martin Romjue, LCT Magazine

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