Operations

Palm Springs: Small Operators Are King of the Hill

Posted on August 1, 2003 by LCT Staff - Also by this author

CityView is a monthly feature that takes a look at the limousine industry in one North American city. This month we interviewed several operators in Palm Springs, Calif.

While Palm Springs and the surrounding resort towns of the Coachella Valley are only a two- to three-hour drive from the heart of Los Angeles, they retain a unique identity and flavor. There are many small, hideaway resorts and a disproportionately high number of golf courses, tennis clubs, spas and boutiques.

Palm Springs is also known as a favorite destination of movie and television personalities and bigwigs who want to get away from the pressures of Hollywood for a weekend.

Overview
· Palm Springs is best known as a winter tourist destination and a frequent site for small and mid-sized business meetings throughout much of the year.
· The limousine companies are all locally established, rather than national, and most have been operating for at least five years.
· Corporate meetings and conventions comprise a large percentage of the limousine business as a downturn in tourism continues after 9/11.

Number of Operators
· There are several dozen operators, with about 10 holding full permits from the city.
· Most companies are small, ranging from one to four cars.

Competition
· “We are all local operators so we know each other and help each other,” says Howard Packer of Limo 4 U.
· “We all have a strong working relationship,” adds Gary Cardiff of Cardiff Limousine & Transportation.

Number and Type of Vehicles
· There are approximately 100 vehicles in the area, the majority of which are sedans.
· Three companies have vehicles less than two years old; most others have vehicles with an average age of five years.

Average Rates
· Sedans: About $45 to $60 an hour.
· Stretches: About $60 to $95, with a three-hour minimum.
· Airport transfers: About $100 for a sedan, about $120 for a limousine.

Regulatory Issues
· The city conducts yearly audits to verify each limousine company has the proper insurance coverage.
· Worker’s compensation costs rose about 25% in 2002 and another 20% this year.
· Insurance costs rose about 20% in 2002 and are expected to increase again by the end of this year.

What’s Unique
· The hot, dry desert air makes Palm Springs a seasonal city, with a surge in resort business from October to February.
· Air conditioning is the biggest vehicle maintenance issue because it is required year round.
· Exterior sun damage is also a concern for limousine operators, as temperatures can reach 115 degrees during summer months.
· Limousine companies have had a good year taking celebrities from Los Angeles to Palm Springs for quick getaways.

Local Association
· There is none, though some operators belong to the National Limousine Association.

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