Spending is estimated to advance another 7.1% in 2018 and will expand to $1.7 trillion total by 2022.
WINDSOR, Conn. — Connecticut operator Michael Lindsey runs a fleet vehicle not commonly found in chauffeured services. He has a Zamboni-like cart called a Tennant Floor Scrubber, an ionized mobile water unit that never leaves the garage of his business, Lindsey Limousine.
The garage of his new 8,000 square-foot facility serves as the core of his operational approach: “Cleanliness equals organization, and organization breeds efficiency,” he says. His pristine garage embodies a detailed, quality, luxury image communicated as much through a building as via client service and late model chauffeured vehicles.
Lindsey’s attention to detail brings up a question on which limousine operators disagree: Do you invest in high-class facilities to match the level of a luxury service image?
Lindsey explains: “The flooring in the garage area was done by a company that builds airplane hangars. The high-traffic urethane coating resists chemicals, dirt, and rubber from the hot tires and contains glass beads that prevent slipping. An untreated concrete floor will constantly be breaking down and constantly be dirty. This coating not only seals the floor but keeps it cleaner and is easier to clean. We use [scrubber] almost every day for even short periods of time to clean up the floor.”
Building An Image
One approach favors a more virtual structure for fleet management based on mobile technology, a home-based office and a fleet dispersed to various locations, or the same arrangement with a basic warehouse/garage-style office. The other approach, used by Lindsey, involves a publicly accessible, storefront facility synonymous with a luxury service image — a place to impress prospective corporate clients invited for a visit to the occasional walk-in.
“I’ve seen the industry grow into much more professionalism,” Lindsey says. “It’s time we come out of the back alleys and out of the shadows and into business parks and be a real business.”
Lindsey spent three years looking for a new company location. He wanted a newer building with plenty of outside parking close to a main interstate. He ruled out using his previous location because renovations would take too much work. So he drove up and down the highway, taking exits and looking at surrounding properties. After considering a few sites with the help of an agent, he settled on one and closed a deal in October 2012 to acquire it. Lindsey then spent the next nine months renovating and upgrading the site at a cost of $500,000. The headquarters now accommodates a growing company. Lindsey bought airportlimo.com in 2009, which he rebranded into an airport transportation service that comprises 10% of his revenues.
“I was busting out of my old place,” says Lindsey, who has 60 employees. “My criterion was I wanted to stay in a certain geographic area. Then I needed a building large enough for my facility and high enough so you can drive buses in and out.”
Only One Chance
First impressions are a one-shot prospect, as the saying goes, especially when a lucrative, multi-year layered chauffeured transportation contract for a corporation is on the line.
Premier Transportation in Dallas has resided in four different upscale “A-/B+” business buildings and office complexes in its 17 years in business, much like the places where they pick up their corporate clients. The company has 70 chauffeurs and office staff and does about $10 million in business annually.
“For us, while bringing clients here is certainly a plus, the reason I did it was for employee morale and an innate sense that we don’t operate like a traditional limo company,” owner and CEO Eric Devlin says. “We run this like a business. We dress like it; our office confines are top-notch. The desks, carpeting, computers, wall art, color schemes all create a sense of professionalism, so when employees are dealing with clients and each other, they understand this is a professional setting and they act that way.”
Premier has been at its latest location for seven years, which is a first-floor office suite with a back door connected via catwalk to an underground parking structure that houses most of its 75 sedans and SUVs. Buses and vans are parked outside of the offices on surface parking under a canopy that also covers a car wash area. Premier added about $40,000 in improvements and upgrades overall to the 8,000 square feet of office space. The facility sits within the city limits of Dallas — about 12 minutes from the Dallas/Ft. Worth International Airport, seven to eight minutes north of downtown, and 10 minutes from Highland Park.
Premier conducts about three or four major presentations per month where the company picks up prospective clients, takes them to lunch, and brings them back to the offices in limousines or sedans. “They all say, ‘This is not what we expected.’ A lot of times it’s like pulling teeth to get them to come here because of what they think a limo company is,” Devlin says.
Business & Brides
At First Class Destination Solutions in San Juan, Puerto Rico, the offices and one-acre secure walled compound are deal-closers with clients.
First Class moved into its buildings in October 2010. Constructed from scratch, they reflect the detailed specs of the owning partners, CEO Roberto Rodriguez and COO Michael Berrios. The modern, sleek 2,500-square-foot offices and 11,000-square-foot vehicle facilities serve as the ideal places to court corporate and retail clients. The $1.6 million investment in land and buildings is now worth at least $2.3 million, Rodriguez estimates.
“We do meetings and deals at our offices, so we can bring in all the administrators of the pharmaceutical companies in Puerto Rico,” Rodriguez says. “We show them around our operations so they can meet the voice behind the phone. They will trust us even more because they will know seeing the operation that we are 24/7, and we are what we sell.” As part of the orientation, Rodriguez takes prospective clients to the garage, where they can see the vehicles and how well various models fit luggage.
More than 100 operators from around the world got a tour of the place in October 2012 when First Class provided sponsored transportation from the nearby airport to and from the site of the LCT Leadership Summit. First Class now runs 43 vehicles of all types, including ultra-luxury models such as a Bentley, that serve several high-end hotels and island resorts, such as the Ritz-Carlton Reserve.
For weddings, First Class has a special waiting room and office for bridal clients and a full-time wedding and transportation coordinator. “Instead of meeting in lobbies and Starbucks, they meet with Jessica, my wife, where they have their own area,” Rodriguez says. “It’s very boutique from different designers. It’s designed for that.”
A nearby conference room has a hanging glassed showcase of concert and performance passes, underscoring the company’s skill in handling VIP entertainment clients on the island. Since First Class is next to the San Juan International Airport and FBOs, it can coordinate complete luxury transportation with tour managers.
For the chauffeurs, the facility has a wing with showers, a gym, and lounge. “We try to give the chauffeurs all the tools they need,” Rodriguez says. “They are the ones who represent us. We need them fresh, with a great smile, and give them a great car wash area.”
Lindsey also finds that employee attitudes are more upbeat and positive when working in a new, comfortable, professional business location. “The chauffeurs work in an environment that is really clean. I want them hanging around if things change in schedule. This is going to be the Google of the limo industry. I want people to have fun working here.”
Real Estate Values
For long-range purposes, nothing beats quality real estate as a solid company investment, says Chris Hundley, owner of Limousine Connection in Los Angeles, founded in 1978. Hundley just bought another building two doors from his limousine operation on Vineland Avenue in the heart of North Hollywood just up the street from Universal Studios and Universal City Walk. “At 56 years old and 36 years in the business, I still think it is a great investment.”
The biggest mistake operators make is to rent a showpiece but not invest in one, Hundley says. The 4,200-square-foot building Hundley bought will be a storefront space to be rented out to a bicycle shop while the warehouse behind it will store some of his fleet vehicles. He’s also improving the offices for his limousine service, which has 32 vehicles and 56 employees. The interior will get upgrades to the floors, doors, bathrooms and the kitchen. Away with the paneling in his office. He is also replacing the dated looking entrance and primary office French doors with more modern glass/aluminum doors inspired by a nearby Wolfgang Puck’s restaurant.
A limousine company owner must diversify investments and assets, given that chauffeured transportation overall is a high-risk business with high overhead, high customer service demands, and high turnover, Hundley says. “As owner of a company, real estate is great diversification. You can control where you are at. You have to have belief in a strategy if you are in for the long haul.”
Real estate generates the ultimate investment return when sold, he adds. “At least you have your real estate as rental income or sellable property, since limo companies don’t necessarily get what you expect when sold.”
While most clients don’t stop by the location of a limousine company, a professional facility can create a mindset, Hundley says. “It sets the stage, the vibe, and the brand. . . People don’t come here that often, but we offer our place as a tool. Even when you sign an account, they drop in later. Celebrity clients have popped in driving by and thought they’d see it for themselves.”
Down To Details
Regardless of whether visitors are brides, walk-ins, celebrities or corporate clients, the details of a facility and operation speak volumes in an industry whose upper end clients are accustomed to noticing and expecting superiority in the details.
“It took me seven revisions with an architect to get the offices we wanted,” Lindsey says. Walls had to be torn out to get rid of unused loading docks and new ceilings installed. The building was repainted inside and out and old carpets ripped out. Lindsey selected a wood baseboard trim and a suspended ceiling instead of a panel one to create more the feel of a lawyer’s or accountant’s office.
Although Lindsey Limousine only gets an occasional walk-in customer, the new facility brings substantial ROI with more efficiencies and better organization of every aspect of the company. It also helps when visiting with corporate managers during the RFP process. “We went above and beyond. We had customers come in here and they are floored. When they come and see facility, they realize not many [limo] companies have one like this.”
Related Topics: business growth, California operators, Chris Hundley, Connecticut operators, Dallas operators, Los Angeles operators, Michael Lindsey, new buildings, operations, Puerto Rico, Texas operators
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