We all know that the recession and the attacks of September 11 have had a dramatic impact on the chauffeured transportation industry. Nowhere is this more greatly felt than in the popular tourist destinations. Destination cities like Miami, Orlando and Las Vegas have seen the steepest declines in tourism ever. Operators in these areas are forced to find ways to cut spending while trying to find new areas of revenue.
Brent Bell, CEO of Bell Trans in Las Vegas, has been facing this challenge daily since September 12. Like most operators, Bell saw a severe drop in revenue. But the public's concern for safety coupled with the country's economic recession has lead to Las Vegas' number of tourists to be a fraction of what is normal.
"The whole town just saw a huge decrease. It was like nothing I've ever seen in my career," says Bell. "It was kind of weird because the first week all of the airports were shut down for three days, and I think I was kind of walking around in a daze thinking as soon as the airports open back up everything will be okay again. Then, when the airports did open back up, we had 767s flying in here with only 60 people on them. I knew we were in trouble."
Trouble was right. Approximately 46 percent of visitors to Las Vegas arrive by air, and that has changed drastically. "We saw decreases all the way up to 75 percent in the first couple of weeks," Bell says.
Bell explains that he organized a meeting of his staff and explained the situation.
"I just told them the truth that I thought it was going to be real tough for the next six months and we were going to really have to see where we can make some cuts," he says. "Make cuts that would be transparent to our clients. I think we did a pretty good job of that."
Bell wanted to make sure that his clients did not see any disruption in their service. So his challenge was to make cuts internally that did not affect his service.
“My staff was very cooperative and understanding,” Bell explains. “We had to be creative. I put our bookkeeping and our office staff on 32 hours a week. I got rid of the office-cleaning people and that saved us three grand a month. Our staff pitched in and we all empty our own garbage cans now, and vacuum our own carpet. I showed up the first day in jeans and rubber gloves and cleaned all the bathrooms.”
Bell admits that he did have to lay off 10 percent of his support staff, but he continued to find more creative ways to cut costs and avoid any more layoffs.
“My entire shop is only working 32 hours a week,” he explains. “We cut them to 32 hours a week, but we’re allowing them to do side jobs at our facility on their extra day off. That kind of softened the blow.”
Bell says that his company is still showing a profit. “There’s no doubt about it, our profits are not anywhere close to where they should be,” he admits. “But we’re still in the black.”
Bell has been aggressive with his marketing and pursuit of local clients.
“We designed a new logo,” he explains. “We felt that our logo needed a facelift. We also put together a new Web site and we’ve gone after a few more local customers in order to make up for some of the loss of revenue in tourism.”
Bell also has focused on his account receivables. He explains that he has personally spent more time in that department and has not made any cutbacks in the area.
Another tip that Bell says helps him survive in this tough time is a philosophy passed to him by another Bell.
“My dad taught me 15 years ago to never buy a limousine that you couldn’t afford,” Bell explains. “And while I’m not happy that I have an excess of 100 limousines sitting in my parking lot everyday, I am happy that I’m not making payments on them. If it wasn’t for that operating philosophy, we would be really hurting.”
So, even though Bell says that this limousine business is still down 30 to 35 percent and his buses are down approximately 25 percent, he stays optimistic about the future and attributes the company’s survival to his staff.
“My staff has been great,” he says. “Everyday we all come to work and try to figure out ways to become more efficient. The staff is working hard, and I honestly believe that when Vegas comes back, we’re going to come back a stronger, leaner, more diverse company. We’re just going to have to ride it out and continue to control costs the best way we can.”