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ORLANDO, Fla. — Besides California and Nevada, no other state took the recession harder than Florida. It was a Ground Zero for the mortgage bubble collapse, which burst across the state.
Although the slump officially ended in June 2009, the recovery has been slow and bumpy for the Sunshine State operators. Today, all indicators are turning positive for the future of the chauffeured transportation industry.
During a January visit to Florida operators and industry suppliers in the Tampa Bay area, Orlando, Ft. Myers and Miami, the mood was upbeat as business has increased statewide. Of course, not all operators are smiling — especially some small-fleet companies that grind it out every day for tight profit margins, but generally the business for 2014 and beyond is healthy, interviewees say.
In addition to a general uptick in the state’s economy, other contributing factors spurring growth for private transportation operators include increases in tourism, conventions (slightly), airport expansion, corporate business and farm-out business.
Orlando, the biggest region for tourism, has had three straight record years, welcoming more than 57 million visitors in 2013. It has been cited as one of the fastest growing cities in the country, now topping two million residents. The Miami region is recovering as high-end visitors from South America, Russia and Europe don’t blink at $1,000 per night luxury hotels and some rent penthouse suites, such as one at The Setai, that costs a mere $32,000 — per night. Further north, the Fort Lauderdale-Hollywood International Airport is undergoing a $2.3-billion expansion, which will better compete against the bustling Miami International Airport.
On the flip side, Florida operators also are paying more for airport fees and fuel. A surge in insurance costs is a common topic of concern coupled with the state’s recent stepped up enforcement — and fines — on operators who are not DOT compliant.
Luckily, Florida has involved regional and state limousine associations that are winning regulatory battles and challenging other anti-business rules and codes that hurt small businesses. The West Florida Livery Association (WFLA), Greater Orlando Limousine Association (GOLA), Florida Limousine Association (FLA), and the South Florida Limousine Association (SFLA), are all active and growing associations that represent the interests of operators at the municipal, county and state levels.
For example, a long-standing Miami-Dade County regulation limiting limousine companies from picking up a client in less than one hour was reduced to 15 minutes. “We’ve been fighting this for 30 years and we finally won,” said FLA Treasure Rick Versace (A1A Limousine). The regulation was originally enacted based on fears from area taxi operators that limousines would compete with taxi service, but was finally reduced due to constant pressure by the association.
Versace also noted that the FLA has succeeded in keeping Uber out of Miami, but added he expects the private transportation app company to take its fight to the state capital, Tallahassee, to lobby for permission to operate.
“We’ll continue to fight Uber and we’re looking to hire our own lawyers and lobbyists to stop Uber,” he added.
The FLA also worked with Ft. Lauderdale-Hollywood International airport officials regarding improvements for operators who deliver and pick up passengers at the airport. Although vehicles must now pay a $3 fee to enter and exit the airport, in addition to an annual permit fee that jumped from $75 to $150 per year, there are more improvements, including new chauffeur reception kiosks inside the baggage area that have digital signage displaying the names of arriving guests. There are new designated blue-painted curbs outside of baggage claim for arriving clients to wait for pickup, and a new chauffeur parking lot closer to the airport where drivers can respond quicker when clients notify them via cellphone that they have arrived and are waiting at the blue curbside area.
“Overall, I guess it’s a good deal because we will pull more business away from Miami due to the expansion, and they (airport officials) have been good about working with us,” Versace said. “Somebody has to pay for the airport expansion, but they said they will review the fee structure in a year to see if it can be adjusted — but you know how that always goes.”
At the WFLA and GOLA January meetings, increasing enforcement of U.S. Department of Transportation compliance and regulatory codes was the main topic. Until recently, enforcement has been soft. But when the state recently handed it over to the Florida Highway Patrol, enforcement and fines increased. DOT regulations state that any vehicle designed to transport nine to 15 passengers (including the driver) must be in compliance, as well as with other mandatory liability insurance and driver rules mandated under code.
WFLA President Dave Shaw (Olympus Limo, New Port Richey) a board member of the National Limousine Association and FLA member who regularly travels across the state to attend industry meetings and events, concurs that business is growing. As an indicator, Shaw said Olympus was booked solid for a January Billy Joel concert.
“That tells us the retail market is coming back because it has been tough going for major concerts the past few years,” Shaw said. He also mentioned that the company is adding to its fleet — sedans, SUVs, stretches and Sprinter vans — to handle surging business. Shaw noted that the company is seeing more corporate business, group bus transportation business, affiliate work, and cruise business at the Port of Tampa, Port Canaveral and Port Everglades, as well as at the Tampa and Clearwater airports.
Shaw echoed other operators who are being stung with higher insurance rates. “We’ve seen this before and I think we’re just getting caught up in the market right now. There are only a certain amount of carriers in Florida and we have some good agencies. It’s just something you have to grin and bear,” he said.
In Orlando, operators are upbeat as the regional real estate market comes back and the city topped two million residents in 2013. Visitors have set records three-years running. GOLA President Cliff Wright (Royal Coach and Limousine) said this past December was the best month he has ever recorded in his nine years in the business. Wright attributed his record month to his regular clients increasing their transportation spending for holiday parties, a good barometer of activity because his corporate business has been flat during the last few years. He also sees more convention business, which will certainly bode well for regional operators in the coming years.
Sami Elotmani, vice president of operations and director of affiliate relations of Orlando-based Destination MCO, attributes the company’s 35% annual growth rate (23% last year) to a combination of a commitment to top-notch customer service, marketing and use of cutting-edge technology that has improved efficiencies and saved the company money. Elotmani said the company has reduced its paper bills, invoices and other paper-based business transactions by providing each chauffeur with an iPad embedded with various back-end office business apps.
“We have reduced paper usage by about 30%. In fact, the iPad now is used as digital signage to greet clients in the baggage area, replacing the traditional paper name signage.”
The company also reduced its fuel bill because of the iPads. “About 20% to 30% of our work is ASAP that requires drivers to return to the office first to get the paperwork before they can pick up the passenger,” President Nour Elotmani said. “Now, everything is done through the iPad and they can just go to the client — that saves us about 8% in fuel costs. The upfront investment in the 29 iPads has paid off, as well as other technologies and applications that handle bookings, manifests and communication that ensure back-office accuracy and customer service.”
Also, Destination MCO is adding sedans, SUVs, motorcoaches and mini buses to handle more business. Elotmani is eyeing outbound affiliate work for emerging growth. “Historically, Orlando has been a destination city, but we now are seeing opportunity for outbound affiliate business as the city grows in population, coupled with better economic conditions. We are seeing our clients beginning to request more outbound transportation. It’s an area we intend to focus on in 2014,” he added.
Not All Happy Campers
Of course not all operators are riding the growth curve, as there have been mergers and acquisitions. One operator said his company is about to close on the purchase of two competitors in his region. Yes, smaller operators face tough times competing with larger operators, and generally have to cut prices and live off of slim profit margins.
In fact, Boca Raton-based L&W Limousine is slowly selling off its fleet but intends to stay in the business as a referral agent. “The industry isn’t what it used to be,” owner Wendy Betulia said. “I received a coupon book in the mail where some ‘limousine’ company advertised airport transportation for $34 when our average is $70. They buy an old Town Car and they’re in business …and then you have corporate clients who will drop you because somebody else will charge them eight dollars less, or drivers who leave and steal your clients. It’s very hard for the little guy to make it.”
Alex Malek, president and founder of Worldwide Transportation, located on the grounds of the Opa-Locka Executive Airport, about 30 minutes from downtown Miami, is bullish on the economy, Miami and his business. “Our overall business has grown significantly in all categories, especially business from Latin America and Russia,” Malek said. “The Miami region has some of the most expensive hotels and resorts in the country and we have more private jet traffic and high-quality clients.” But Malek is quick to point out his company’s growth is due to a relentless focus on sales and customer service. “We don’t let a phone [go] more than 30 seconds without someone picking it up.”
Malek recently expanded his business by partnering with Destination Management (DMC), a professional services company that has extensive local knowledge, expertise and resources. It design and sets up events, activities, tours, transportation and program logistics.
“We now can offer our clients full transportation and destination services, including hotels, activities, meet-and-greet, beach and golfing activities, nightlife — everything they need from arrival to departure,” Malek said. “It’s a new level of service that our clients require and now we can deliver.”
SIDEBAR: Florida Vehicle Suppliers Upbeat on Economy, Growth
During two pit stops at Gateway Coachworks of Ft. Myers and ABC Companies of Winter Garden, both suppliers reported good sales in 2013 and expect the trend to continue this year.
“Last year was better than it has been but not as good as it will be,” said Gateway owner, Rick Fugitt. “We haven’t returned by any means back to the pre-recession economy, but we’re seeing good pockets of growth.” Fugitt said he is selling more buses, sedans and Sprinter vans, but the stretch business remains flat.
Roman Cornell, senior vice president, ABC Companies, reported the company sold more mid- and full-size motorcoaches in 2013 than in previous years and expects a continued upswing in 2014.
“We’re not seeing any new entrants (operators) in the state, but the operators here are healthier and buying a combination of both refurbished and new motorcoahes.”
In Florida, the companies that made it through the recession are getting bigger and stronger, while some smaller companies have disappeared. The growth engine will depend on operators who harness business growth in 2014.
Related Topics: ABC Companies, business growth, Dave Shaw, FLORIDA, Florida Limousine Association, Florida operators, Greater Orlando Limousine Association, National Limousine Association, Rick Versace, Southern U.S. Operators, state regulations, West Florida Livery Association
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