Operations

Gas Prices, Economy Make for Bleak Outlook on 2008

Posted on December 26, 2007 by LCT Staff - Also by this author - About the author

SATELLITE BEACH, Fla. — With gas prices near all-time highs and the economy slowing, many limousine owners are looking soberly to 2008 prospects.

"The economy is in tough shape," said Gary Reifert, vice president of Hollywood Limousines in Satellite Beach, Fla. "We're down quite a bit, as far as last year. We're hearing the same from all over the United States."

Parties and libations make New Year's Eve one of the busiest days for limo services. But while bookings remain strong for many local operators, others are seeing a slowdown.

Reifert's fellow members at the Greater Orlando Livery Association, a Central Florida organization of chauffeured transport services, are even paring down fleets.

"I get calls from the Orlando market from people interested in selling their limos," he said. "It's a sign of the times."

"We're seeing a little bit of a slowdown in the use of stretch limos and in travel," said Jeff Greene, president of the National Limousine Association and owner of Greene Classic Limousines in Atlanta.

Gasoline prices are also making things difficult. "The cost of fuel has become one of our greatest expenses," Greene said.

It takes lots of gasoline to keep J.J.'s Limousines’ eight-car fleet — including a stretch SUV and a stretch Mercedes — rolling along Brevard County roads.

"We spend at least $4K a month on gas," owner Michael Borzilleri said. While Borzilleri's vehicles already are rented out for New Year's Eve, he agrees that the 2007 economy hasn't been kind to the industry.

"There's definitely competition, but the problem in the last half of the year has been the economy," he said. "It's a luxury business."

To offset the additional costs for gasoline, Borzilleri has implemented a surcharge, but he doesn't feel comfortable passing on the additional costs.

"The way the economy is, you can't really raise the rates," he said.

The high cost of gas has encouraged the industry to become environmentally friendly.

"The industry is looking at fuel-efficiency, at going green," said Reifert, who just added a Toyota Scion to the Hollywood Limos fleet.

In a Hollywood Limos' Lincoln TownCar, the cost of chauffeured travel from Brevard to Orlando International Airport runs at $130. But switch to the Scion, and the price drops to $90.

"It's a little more affordable, and that's what you have to look at during these times," Reifert said.

To hedge his bets, Reifert also is exploring non-traditional markets to keep his six-car fleet on the road.

"We're getting into a lot of different areas," he said.

This year, he partnered with La Quinta Inn in Cocoa Beach to provide the transportation part of a New Year's Eve package.

Working with the American Cancer Society's Transportation Coalition, Reifert also is adding year-round transportation services for the elderly and infirm. "The insurance companies have given the American Cancer Society funds to help with transportation for patients," he said.

While the stereotypical limo customer is the free-spending party animal interested in painting the town, the reality is that limos serve from the dance floor to the boardroom and in between, taking parties of kids to the mall or pizza parlor, ferrying families to cruise terminals and making it easy for business travelers to navigate unfamiliar cities.

According to the NLA’s Greene, hiring a limo often is more convenience than luxury.

"Our services can save the traveler money and give peace of mind," he said, noting that, for women traveling alone or with children, a limo may prove the safest way to traverse a new city.

Of course, limo chauffeurs also are excellent designated drivers.

"The cost of a limo is a fraction of the cost of a DUI," Greene said.

Greene also notes that limousine services are a safe mode of transportation. New Year's Eve is busy, busy for most limo services, but the big crunch really arrives during prom and homecoming seasons.

"You'll rent out as many vehicles as you have," said Borzilleri, who hopes that, by the time high school girls begin dreaming about their proms, economic news will be brighter.

A majority of Brevard limo customers focus on trips around Central Florida, but some ask the drivers to take them on roads less traveled.

Rod Woods, manager of Hot Rayz Limousines, recalls the customer who engaged a 23-passenger Hummer for a weekend trip to North Carolina, to the tune of $3,500.

"We travel anywhere," Woods said.

It's not unusual for a customer to hire a Hot Rayz limo for a jaunt to Jacksonville or Miami to catch a football game or enjoy a bit of big-city club-hopping. The economy has thrown a wrench into the industry's engine, but Brevard's location remains prime limo territory.

"We're a straight shot from the beach and the port to Orlando," Reifert said.

"People will always want to come to the beach."

SOURCE: floridatoday.com

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