Insurance rules and fuel costs remain he two biggest worries lacing the limousine industry, according to a survey of operators conducted by LCT Magazine.
Results of the readership poll were outlined in a keynote presentation at the LCT Show by Ty Bobit, president/COO of LCT's parent company, Bobit Publishing, and magazine publisher Sara McLean.
Ty Bobit (left) and Sara McLean
Bobit noted that while insurance rates remain high, "We might - and we say might - see rates start settling down" in light of the healthy profits posted recently by some insurance companies.
But he cautioned that insurance rates are based in part on how the stock market is performing. "Until Wall Street calms down, insurance costs will remain high," he said. "The good news is that analysts believe that the stock market will be on an upswing sometime around the fourth quarter of this year."
In looking at fuel costs, Bobit noted that they have been climbing in the first months of 2003 as the threat of war in Iraq increased.
He noted that LCT is offering a free "fuel calculator" at its Web site, www.lctmag.com, that offers an estimate of the savings that can be realized with a fuel management program and a variety of other information on fuel-related issues.
Not surprisingly, larger operators are more likely to have a fuel management program. About half of all limousine operators with 11 or more vehicles reported that they have fuel management programs, with smaller operators significantly less likely to have one, according to the L.C.T survey.
Other highlights of the presentation included:
Internet presence: Most operators now have their own Web site, with the overwhelming majority of larger operators offering Internet surfers a look at their services, according to the LCT survey. The pervasiveness of the Internet is evident by the fact that nearly hall of even the smallest operators (1-3 vehicles) report a presence on the Internet.
In looking at operators who are accepting reservations via the Internet, the survey found slightly more than a third of the smallest operators (1-3 vehicles) have this online capability. By contrast 57% of those with fleets of 21 vehicles or more can accept Internet reservations.
Average hourly rates: A comparison of rates for the past 10 years, based on the LCT readership survey, shows that hourly charges have risen to $45 an hour in 2002 from $36 an hour in 1992.
Revenue changes: Midsize operators seem to be weathering the current economic turmoil better than the smallest and largest operators, Bobit said in reporting the survey.
Operators with between four and 20 vehicles in their fleets have experienced revenue declines ranging from 29% to 38%, while operators with one to three cars have experienced an average decline of 52%, and operators with 21 or more vehicles have experienced an average decline of 43%.
Proms vs. corporate: Collectively, operators' business is more likely to come from serving the special-occasion needs of clients. The survey found that corporate-oriented trips represented 40% of operators' collective business, with the special-occasion market representing the remaining 60%, McLean noted.
Miles of service: LCT readers account for about 90,000 chauffeur- driven vehicles in service today, and they are responsible for providing more than 90 million chauffeured trips per year, she added.
Public relations effort: Bobit urged industry leaders to conduct a "well-coordinated public relations campaign to promote the positive use of limousines."
"The industry needs to continue to market itself as offering unique premium transportation," he said. "Positive information that is strategically placed in the consumer media would reinforce the fact that limousines are good, they're fashionable and they're cost-effective. A professionally run campaign would help every operator in the business."