U.S. passenger numbers are at record levels, but packed terminals aren’t stopping them from enjoying wait time for a flight.
GAINESVILLE, Fla. — When Sander Kaplan bought his first pre-owned motorcoach in June 2006, he didn’t know if he’d need a second one. If he did, he figured it would be at least a year away.
Instead, Kaplan, owner of A Candies Coachworks of Gainesville, bought his second motorcoach three months later and a third one six months later. He is now up to nine. Kaplan’s chauffeured transportation company, A Candies Limousine, is clearly a distant second to the bus business as Kaplan marks five years in the charter and tour business and 25 years in limousines.
“We’ve turned into a coach company, not by design, but because of the needs and demand of our market,” says Kaplan, a 2008 LCT Operator Of The Year. “When we bought the first coach, we didn’t know we were buying a second coach, or a third coach six months later. Our business projections were too low. We didn’t realize there would be so much demand. If we had not moved into the motorcoach business, we would have been barely surviving in the limousine industry,” Kaplan adds.
Kaplan’s most recent purchase, a ninth motorcoach, is also the company’s first new one — a 56-passenger, 2011 Prevost H345 with tire monitors, a fire extinguisher system, and three-point seatbelts. Like many operators who grow from limousines to charter buses, Kaplan built his charter and tour business on durable, affordable, quality pre-owned coaches.
A new niche under the nose
A Candies is based in Gainesville, a small college town at the University of Florida that lies about 90 minutes from Jacksonville and Orlando. “After being in business 19 years, we couldn’t grow bigger than eight vehicles,” Kaplan says.
Kaplan got the idea to explore the bus business while attending the 2006 LCT Leadership Summit. Other operators he talked to suggested he connect with UF, the town’s major anchor, and figure out what they needed for transportation.
“I had not thought about it,” Kaplan says. “I wasn’t sure. There is nothing romantic about coaches. I didn’t think it was something that would fulfill me. I got back to Gainesville and one of my chauffeurs [who also] was driving a school bus mentioned the charter bus business. He told me, ‘You need to get yourself a motorcoach.’”
In June 2006, Kaplan took the advice from the Summit and the driver and bought a pre-owned 56-passenger 2000 Prevost H345 with 330,000 miles, for $250,000. “I was shocked that they were so expensive,” he says. “You really have to commit. When you buy pre-owned coaches, they don’t come to you clean. You can’t overthink it. If you do, you won’t get into it.”
Kaplan connected with another local operator who needed to farm-out motorcoach business and got his first coach clients immediately. He also tapped into a strong need for motorcoach service among UF athletic teams. “I talked to sports coordinators and asked them what they were doing for athletic travel,” he recalls. “They said they had to get coaches out of Orlando and Jacksonville to service their athletic teams. It was a niche that was right there in front of me and I didn’t even see it.”
Growing just in time
All A Candies coaches are pre-owned Prevost models, except for the recently acquired 2011 model. Kaplan also runs one Krystal KK33 28-passenger mini-bus. The demands for buses rose just as the recession took hold, sapping the limousine business but driving clients to more economical group transportation.
“We grew faster than we expected. We realized that not only did UF have more work than we could handle, we wanted to protect our corner,” he says. “We wanted to build our company as slow as we could to allow a stronger infrastructure. We had to keep buying coaches to supply what the needs were.”
Kaplan split his company to reflect the growing motorcoach business, which is incorporated under the name A Candies Coachworks Inc. “You will need a second coach as soon as you get the first one,” he says. “You move more than 56 people on a regular basis. You can sub it out, but if you want to own the market, you need to keep buying buses.”
Out of the comfort zone
Among the challenges of operating motorcoaches are safety and maintenance. A bus requires $5 million in insurance coverage, while three-point seatbelts are now becoming far more preferable in light of high-profile bus crashes in recent years.
“After five coaches, you really get an education on preventative maintenance,” Kaplan says. “You don’t mess around with it. If you need tires or belts changed, change them. Nothing good comes out of passengers on the side of road because the bus broke down and you’re calling another company to help you out and get towed.”
Kaplan has dealt with four bus breakdowns in six years, and clearly remembers the trauma of each one. “When you get that call, your heart drops and your stomach just stresses,” he says. “You figure out how: how do I fix this opportunity as fast as I can so customers are not inconvenienced any more than they have been?”
Along with deterring breakdowns, keeping a wide enough cash flow ranks among the most critical practices in the charter and tour business, Kaplan says. He suggests not financing a motorcoach for more than four years. His first payment plan lasted five years at $4,100 per month, compared to the $800 to $1,200 monthly payment on a stretch limousine.
“If an operator wants to get into this business, they need to learn how to work their cash flow,” Kaplan says. “If you don’t at least get half up front [from clients], you will be putting a lot of money out of pocket. You should at least get paid half down on big tours. You’re putting a lot of money out front.”
Kaplan soon figured out his break-even point after buying the first bus. When factoring in the payment, insurance, maintenance, share of office expenses, and reservations/dispatching, Kaplan needed to do eight day trips per month at $1,000 per trip. “We never had to worry about that,” he recalls. “Once we got going and shook hands with clients and let them know what we were doing, we never had to worry about getting more than eight trips.”
Although Kaplan does not have exact figures of what share of his bus business comes from UF, he estimates that athletic teams — college and high school — comprise 75% of his coach company revenues while the rest comes from a mix of travel groups, school field trips, city tours, senior excursions, weddings, and fraternity/sorority events.
A Candies Coachworks averages about 180 trips per month, or about 20 per motorcoach. The nine motorcoaches combined rack up 500,000 miles per year, averaging 55,000 miles per bus.
A Candies rates average about $1,050 per day for a regular day trip as long as it is not over a certain number of miles. “We’re still trying to figure out how to approach the customer and properly give a quote,” Kaplan says. “There is more maintenance and fuel the more the distance. You have to account for that or you are not covering your costs.”
The longer the trip, the more oil, rubber and wear and tear are required, Kaplan says. “I don’t know if anyone in the industry has figured out the best pricing. Each trip is so different. There are only very general estimates.” He figures his rates average about $3.50 per trip mile and $1.50 per deadhead mile. A Candies accumulates deadhead miles when picking up UF teams at airports wherever they play, he says.
Within the next few years, Kaplan plans to replace the pre-owned motorcoaches with new ones. “Now we are figuring out, after being in this for five years, that having coaches 10 years old, we should be buying newer coaches. There’s something to be said about sending a coach out and having less worry. [All] money from the coach company goes back into the business.”
While A Candies Coachworks runs nine buses and a mini-bus, A Candies Limousine consists of seven black luxury vehicles: a Chrysler 300 stretch limousine, two Krystal Lincoln Town Car stretch limousines, a Mercedes S550, a Lincoln Town Car Executive L, a 1954 Rolls Royce classic, and an Audi Q7 SUV. Kaplan estimates that 80% of his overall revenues come from the coach company, and about 20% from chauffeured vehicles. The coaches yield higher profit margins than the chauffeured vehicles.
“We do have an advantage in this business,” he says. “Limos are romantic, cool and fun. So when we started training our chauffeurs to drive motorcoaches, we felt like we had a level above what you would call a bus operator.
Immediately we called our buses coaches, and drivers became coach hands. If you called our coach a bus, we asked you to put a quarter in our coach piggy bank on the dispatcher’s desk. It changed our culture quickly. It sounded upscale. We’re so used to doting on people and putting out the red carpet, we’ve extended that to our motorcoaches. We actually have a red carpet that we roll out. Coach hands are professionally dressed and on time with a clean coach.”
Chartering the bus course
Kaplan advises any limousine operator to consider the motorcoach niche. “Although it takes a little bit more confidence to do it, it’s going forward,” he says. “To be in the coach business and buy limos would be going backwards, now that I’ve seen both. You spend the same amount of time as putting out a limo trip as you do a motorcoach trip, so why not make more? At my age , I realize that I’m learning to buy more time. To spend my time on a $300 trip versus a $1,000-plus trip, or a multi-trip such as $1,200 per day for three days, you’re talking about working the same amount of hours, but you are making more money.”
Given that the limousine industry has suffered severe economic setbacks in recent years, it may take several more years for it to return, Kaplan says. “If I had not made this move six years ago, I may not have been in the limo business anymore. My wife asked me, ‘Are you getting out of the limo business?’ I said, ‘No, I’m not getting out,’ but it doesn’t make as much sense anymore in our present economy. It makes sense to build and grow and go on to the next big and better thing. Some limousine companies are no longer here because they didn’t know when to make the change.” Kaplan adds that A Candies will grow its limousine business again when demand returns.
Kaplan also co-owns a Burger King franchise with nine restaurants. He focused more on it as the economy slowed his limousine service. “Once I found this passion to try the coach business, it was like starting up a new company. It’s been a lot of fun.”
FACT LOOK: A Candies Coachworks Inc.
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