Industry Research

STATE OF INDUSTRY: We Made It Through. . .?

Posted on February 18, 2011 by LCT Staff - Also by this author - About the author

ABOUT PHOTO: Sara commands the opening of the ILCT Show Monday. (Photo by Ron Rennells).

2011 INTERNATIONAL LCT SHOW: LCT Magazine Publisher spotlights the positive trends moving forward as the chauffeured transportation industry ditches the doldrums. And was there some Manilow magic in the air?

LAS VEGAS, Nev. — Obviously, it was a coincidence that romantic crooner BARRY MANILOW regularly performs at the PARIS LAS VEGAS, site of this week’s 2011 International LCT Show.

But he easily could have wandered over and serenaded the Valentine’s Day opening audience of the first genuine post-recession industry trade show with his hit ballad ”I MADE IT THROUGH THE RAIN”:

“I made it through the rain/ I kept my world protected

I made it through the rain/ I kept my point of view

I made it through the rain/ And found myself respected

By the others who/ Got rained on too/ And made it through”

[EDITOR’S NOTE: You may further inspire yourself with this YOUTUBE VERSION].

Although final figures are still being calculated, this year’s International LCT Show drew a whopping 50%-plus increase in attendance compared to the 2010 Show at the Palazzo/Venetian. Pre-registration figures were up 23%.

It made the annual State Of The Industry speech all the more sweet n’ sanguine for LCT Publisher Sara Eastwood-McLean, whose presentation opened with an Ice Age-themed animation clip to the soundtrack of “Also Sprach Zarathustra,” by Richard Strauss.

A power point slide stated: “For nearly three years, this industry has been grabbing at the smallest ounce of hope to survive the Great Recession, but…As we hold on just a little bit longer, bigger things are coming. Get Ready.”

Sara updated some industry stats:

• As of January 2011, there are 8,674 chauffeured car operators and 3,538 bus operators.

• Total gross industry revenues increased by 4% from 2009 to $2.26 billion.

• There were 130,000 sedans, vans, buses and limos in service right now.

Sara drew upon a variety of economic and financial sources to outline emerging trends and revenue opportunities for industry operators and vendors:

• Despite rising corporate profits, economic growth in the private sector is expected to increase an average of 2% per year for the next five years.

• 61% of operators are seeing a comeback in business travel.

• Travel demand is finally rising to higher levels than supply.

• Operators need to get their financial affairs in order to secure the needed credit to buy new Lincoln MKTs and the successor vehicle to the Cadillac DTS.

• Corporate retreats and meetings are showing a strong return since the market tanked in 2009.

• Most travel buyers expect corporate travel spending to EXCEED pre-recession levels by the end of 2012.

• Wedding bookings via web sites are up, although the number of overall weddings is declining.

• Mobile technology keeps multiplying, in terms of gadgets, services, and faster applications. It is the fastest technology ever observed, and operators need to harness its efficiencies.

• All customers have smart phones, and operators must know how to communicate with them.

Sara warned about industry challenges that have hurt company bottom lines:

• Rising fuel costs (again). An average livery vehicle uses 58 gallons UNLEADED FUEL per week. That means the average 14-vehicle operator spends about $126,000 per year.

• Costly federal and state labor regulations and wage rules: The Obama Administration has added 19,000 IRS auditors to review 1099 filings. Time keeping and overtime pay have become highly scrutinized by the federal Dept. of Labor.

• Downward or flat pricing pressures from desperate competition: The entire travel industry slashed prices to both keep clients and lure others away from competition.

• Revenue-hungry governments raising fees and taxes.

Sara also explained some positive technology trends that operators must be part of:

• Online-reservations capabilities: 80% of travel managers now use online booking tools.

• PDAs: 70% of operators already know the importance of driver communication to reduce pick up errors.

• FAA tracking software: 65% of operators use real-time flight tracking to avoid vehicle down time at airports.

• Reservations and dispatching software: 50% of operators know this type of software reduces staffing needs and helps expedite billing/receiving management.

• Equipment that reduces accidents and lowers insurance costs: 40% of operators use GPS tracking and 35% are using chauffeur cameras and other safety equipment.

— Martin Romjue, LCT Magazine

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