OCT. LCT: Financial success in this industry depends on how much information you gather and what you do with it.
For a fortunate handful of U.S. operators, the Democratic and Republican national conventions, hosted in Denver and Minneapolis respectively, have offered a brief hiatus from the economic slowdown.
Businesses in and surrounding each host city have received a temporary stimulus in revenue due to the magnitude of these quadrennial events in their areas, and the thousands of people that need to move around the city. Taking on conventions can offer operators a surge in profits but also can leave those operators in smaller cities clamoring for resources.
“This isn’t New York or Boston,” says Tom Jenkins, vice president of sales and marketing at Corporate Limousine Service in Minneapolis. “There are only so many vehicles available here and they are in very high demand.”
Both conventions found operators scrambling to accommodate the number of reservations coming over the phone. As of LCT publication time, Rob’ert Milfeld, owner of RJ Limo in Vail, Colo., was looking for nine more black SUVs he needed to fill a high-profile order. On an average business day, RJ Limo mainly caters to a clientele of vacationing tourists, but since the convention came to Denver, his business has undergone a major facelift, at least for now. And such has been the case for many operators near both convention sites.
“We’re renting luxury sedans from car rental companies and obtaining the proper coverage under our umbrella policy,” says Bob Willard, an operations agent for Executive Transportation of Denver. The company also was farming out reservations to smaller companies in the surrounding areas when he spoke with LCT. Willard adds that Executive Transportation began formulating a plan of action after contacting its Boston affiliates, which handled the Democratic National Convention (DNC) in 2004, for advice.
“Our lines are going crazy,” he says. On the other hand, even a larger operator such as Carey of Minnesota, with 40 vehicles, was booked up for the Republican National Convention (RNC) as far back as February. Owner Todd Anderson, who operates the Carey licensee out of Minneapolis, says that as of July, the Department of Transportation (DOT) would not accept requests for emergency permits on recently purchased or rented vehicles. This means adding additional vehicles to a fleet late in the game was not an option.
Other Minneapolis-based companies found themselves hitting the same wall. “I’ve been working with local legislation here to get waivers to bring in additional vehicles to handle the convention,” Jenkins says, “but we are still unsure of what will happen.”
Knowing Your Limits
“You’ve really got to do everything way ahead of time,” says Brian Iversrud, owner of River City Limousine in Minneapolis and president of the Minnesota Chauffeured Transportation Association. His company went out and purchased additional vehicles months ago in anticipation of the extra business that drawing an estimated 45,000 additional people into the Twin Cities for three days would warrant. He says making sure all of your vehicles are properly licensed and chauffeurs properly screened are two of the most imperative steps in preparing for a high profile event of this size.
“The last thing you want is to have a vehicle full of diplomats sitting on the side of the road because of some administrative oversight on your part,” cautions Iversrud. Additionally, the Public Utilities Commission (PUC) was rumored to be out in full force in and around both convention sites to ensure all transportation companies were operating legally.
Iversrud also advises fellow operators against biting off more than they can chew. A good rule of thumb is to not take more reservations than your company and chauffeurs can physically handle without having a back-up plan. He stresses that the type of vehicle in demand is included in that rule.
“The RNC clientele is requesting understated, low-profile vehicles,” Iversrud adds. In other words, if you aren’t capable of providing specifically what they need, don’t bother taking the reservation. Iversrud purposely gave his company a cushion when taking reservations that would ensure River City’s vehicles were available to cover reservations he knew would be coming in closer to the date of the convention. “Don’t take every run possible,” Anderson warns. He suggests using your local operators if you don’t have enough vehicles to support the demand. And, “Farm out fairly,” he adds.
As a side note, Iversrud says a limo-coach or shuttle is a perfect vehicle to have if you are looking to break into the convention business. “But,” he says, “you should know the demand for those convention centers in your area before you go out and purchase any kind of vehicle.”
Working a large event is great for business but it also presents more opportunities to lose money... and clients if they don’t protect themselves. “You have some leverage when you are a company in a smaller city,” Anderson says. “You have the ability to negotiate a price as well as protect yourself if something goes wrong.”
He suggests taking the following measures:
When working large events, Iversrud relies on detailed contracts that specifically outline the terms of the reservation, pricing, and service. He pays special attention to pricing his company’s services competitive to the rates of fellow operators. “Having a large convention in your area is a great opportunity,” he says. “You want to make sure all your cars are booked.” Gauging prices won’t get those vehicles moving.
Getting the Information You Need
As with any large event hosting high-profile delegates, thousands of people, hundreds of vendors, and tight security, specific logistics are an evolving story. In fact, they will have surely changed many times before you read this article. So, although planning in advance is critical, there is only so much information available from host committees before the 11th hour strikes. “There’s only so much preparation you can make,” Iversrud says. Many of his clients weren’t even sure what events they would be attending. This means it is important to be flexible and keep lines of communication open.
“The key in all of this is to communicate with your client,” says Andrew Ballard, Director of Transportation for the DNC committee. This was Ballard’s fourth year in his post with the DNC, and he has extensive experience in transportation direction from his years working on PGA tours, World Cup, and the Super Bowl.
This year’s DNC was unique in that individual passengers, as opposed to entire vehicles, received security credentials. Because things like this come up, it is absolutely necessary that operators are working closely with their clients to ensure all of the proper credentials have been obtained. Only credentialed passengers were able to enter the DNC site and their vehicles were directed to holding lots.
“The key is educating vendors and getting that information out,” Ballard says.
Stay Informed, Real Time
Obviously, keeping abreast of the latest information is crucial in these extremely sensitive security situations. So what measures can operators take to make sure they are included in those educational opportunities?
“It is extremely important to be a member of your local Chamber of Commerce,” Anderson says. He credits the organization with putting local business owners in the right place at the right time through its extensive pool of resources.
At the time of this story, Anderson said he was understanding about the lack of information operators in the area had received from the GOP. As of late July, the Republican host was just receiving its keys to the Xcel Energy Center in downtown St. Paul, Minn. “In their defense,” he says, “the committee is doing the best with what they have because the entire infrastructure is being repaired. That may be why we’re in the dark.”
Anderson is referring to the ongoing construction of the Mississippi River bridge connecting the heart of Minneapolis to its surrounding cities, the I-35W. Last year, the bridge unexpectedly collapsed, killing 13 people. The extensive damage to the city’s main artery, which previously carried 140,000 vehicles a day, has been a tremendous burden on route planning, Anderson says. Operators have had to learn many alternate routes, he adds.
“A lot of information is out there,” says Jody Cowen, Carey’s Denver licensee. “You just have to look for it.” She says belonging to her local limousine association, the Denver Metro Convention & Visitors Bureau, and receiving the Denver Airport newsletter has helped her immensely. “You have to get yourself connected in some way,” Cowen says. “And make your contacts early on.”
According to most Denver and Minneapolis operators LCT spoke with, both host committees were conducting monthly meetings, which included the police and transportation officials working each convention to discuss the events’ logistical planning. Additionally, each had a wealth of information available on the web.
“The DNC has been very accessible,” Cowen says. “They return calls and answer questions.”
In early August, members of the RNC host committee, the Convention and Visitor’s Bureau, as well as the St. Paul Police Commander and head of security, met with the MCTA at its membership meeting. At the same time, operators in Denver were scheduled to meet with the host committee and the Denver Convention & Visitors Bureau. “Although we would all like to know sooner than later what is going to happen,” says Cowen, “things are still in the planning process.”
Using Your Lifelines
The following are recommended resources that will be crucial to use when working large events like the DNC and RNC:
Think you’ve got what it takes to do big convention business? In 2006, LCT released a detailed survey in conjunction with the National Business Travel Association (NBTA). Here’s what travel managers said were their four biggest concerns when it came to chauffeured transportation companies and getting their business.
Protesters and Your Protection
At any political or large corporate event, protestors are usually out in full force.
I think protestors are a valid concern,” says Barbara Curtis, owner of Two Step Limousine in Denver. “I want to know ahead of time how they are going to be dealt with if they try to interfere with our service.”
In the past, protestors have been known to block roadways, airports, and even intentionally damage vehicles that attempt to cross their picket lines. Although most protestor groups gather without incident, the occasional outburst has some operators worried as to how they will be affected.
“Minneapolis is a very liberal city,” Iversrud says. “I am curious to see how protestors will be handled.”
He recommends operators should remain passive to protestors if they become hostile and to go about business as usual. If something arises, the key is to call the police and get them involved.
“I have offered security for some of my clients but none have taken me up on that as of yet,” he adds. Ballard took a more casual approach to the possibility of interference from the hundreds of protestor groups, who were already registered for the Denver convention when he spoke with LCT.
“I’m not expecting protestors to interfere,” he says. “And if they do, we will follow the protocol we have with other events of this size.” In such cases, Ballard says traffic is rerouted around their demonstrations.
“I just don’t think Denver is ready for this,” Curtis says.
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