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According to the 2005-2006 LCT Fact Book, corporate travel makes up nearly half of the chauffeured transportation industry’s revenue. Understanding the usage patterns and attitudes of this major market segment is critical. Up until now, operators have had to do their own research on the business travel segment, much of it anecdotal.
Thanks to a cooperative effort with the National Business Travel Association (NBTA), LCT Magazine was able to survey 100 of the NBTA’s member travel managers. NBTA members work for large corporations and offer opinions on chauffeured transportation services that shouldn’t be ignored. These first-ever survey results point out opportunities for improvement and growth for operators serving these clients.
Some statistics were surprising, such as the fact that travel managers ranked Chicago as the second largest market for business travelers who use chauffeured transportation services, following behind the largest one, New York City. Washington, D.C. (including Baltimore.) and Boston ranked number three and four, respectively. Boston is commonly thought to be the second largest business travel market in the livery industry.
Demographic data on corporate travelers also was captured during the survey. About two-thirds of corporate livery users are males and about 60% are in their 40s. Most have management-level positions, but about 25% of surveyed companies allow any traveling employee to use chauffeured transportation services under certain restrictions.
Late, Lost and Loud
It shouldn’t surprise anyone that travel managers, speaking on behalf of employees who travel, are most annoyed by chauffeured transportation companies who leave clients waiting at the curb. This highlights the logistical challenge that all operators face when one trip is late, causing all the others to run behind in a domino effect.
Being late was the number-one annoyance by a wide margin among surveyed travel managers. Chauffeurs who get lost or don’t know the most time-efficient route came in second. Unsafe or erratic driving went hand-in-glove with this complaint.
Beyond prompt arrival and efficient and safe driving, appropriate behavior and chauffeur professionalism play a leading role in how business travelers perceive their experiences. Drivers who talk too much, especially when interaction isn’t solicited by the passenger, or ones who talk loudly on their cell phone during the trip are a big turn-off. Rude or strange behavior by chauffeurs also creates negative impressions.
The open-ended comments of the surveyed travel managers shed further light on traveler perceptions.
Keep in mind that travel managers hear more negative stories than positive tales since travelers tend to contact them more with chauffeured transportation complaints rather than kudos. This is another important reason to have tight control over your operations if serving corporate clients is part of your demographic. Travel managers who hear numerous complaints about a particular chauffeured transportation company will likely choose another one next time around.
The following anonymous comments come from travel managers who took the survey. Most are stories about negative experiences, but others do highlight exceptional service.
It’s interesting to note that companies that use chauffeured transportation services tend to let a large number of employees use them. More than half report that more than 100 company employees use these services, and 25% of respondents say that more than 500 employees use livery services.
On the other hand, the number of trips taken by these travelers is fairly light. More than 75% of the surveyed travel managers say their travelers only take 1 to 25 trips per year. This points to a big area of potential revenue growth for livery operators — getting corporate accounts to increase their chauffeured transportation usage.
It’s not a big surprise that New York City was cited by travel managers as the largest metro area market where nearly all company travelers use chauffeured transportation. After all, New York is the largest chauffeured transportation metro market in the world. More surprisingly, however, was that Chicago was the second ranked metro market used by corporate travelers, followed by Washington, D.C. (including Baltimore), Boston, San Francisco and Los Angeles.
By region, the Northeast is dominant, with New York City, Washington, D.C, Boston and Philadelphia. The Southeast has three of the top 15 markets with Atlanta, Miami and Orlando. The Midwest is well represented by Chicago and Minneapolis. Both California and Texas stand out, too — with San Francisco, Los Angeles and San Diego in the Golden State and Houston and Dallas in the Lone Star State.
In terms of how much corporations are spending on chauffeured transportation services on an annual basis, the $101,000 to $250,000 range was the median category chosen by respondents. Interestingly, the $1 million to $5 million category was chosen by 19% of respondents.
WHO USES SERVICES
In terms of job title, all upper levels of management are regular users of chauffeured transportation services — from CEOs down to vice presidents, and sometimes department managers. Nearly 25% of the surveyed companies allow any traveling employee to use livery services, although this privilege is many times restricted to specified metro area markets.
|President, CEO or Chairman||89%|
|COO, CFO, CAO, CMO or CIO||89%|
|Executive and Senior Vice Presidents||88%|
|Any Traveling Employee*||24%|
|* May be restricted to specific metropolitan areas.|
Eighty percent of business travelers using chauffeured services are 36 to 50 years old. About 60% are in their 40s. This demographic factor matters in terms of understanding generational tastes and preferences for amenities and music, and also for marketing messages that will grab their attention.
If you’ve done much business travel through America’s airports, you won’t be surprised to learn that two-thirds of corporate livery users are males. Business travelers in general tend to be mostly males. This has changed somewhat over the years with more and more women breaking through Corporate America’s “glass ceiling,” but your hardcore road warrior business traveler is usually male.
Males 66%; Females 34%
IMPRESSION OF INDUSTRY
As far as attitudes about the chauffeured transportation industry, it’s a good news/bad news scenario. The good news is that only 4% of respondents state they have a negative impression of the industry. The bad news is that only 21% have a very positive impression. A big chunk — 32% — are neutral and 43% hold a somewhat positive image of the business. The silver lining is that there’s some real opportunity for the industry to improve its image with business travelers.
Top 10 Most Important Aspects of Service Quality
The cleanliness and professional appearance of the vehicle’s exterior and interior are a big deal to business travelers. This makes sense, but what’s surprising is that these factors were ranked higher by travel managers than others such as personality and attitude of the chauffeur and having the trip mapped out. On-time performance was number one and driving skill set of the chauffeur was number three. These survey respondents are sending an important message to the livery industry: it comes down to three basic factors to please a corporate traveler — being on time, using a skilled chauffeur and offering a clean, professional-looking vehicle. The good news is that livery operators have a great deal of control over these factors.
1 On-time pickup/drop-off
2 Appearance/cleanliness of vehicle interior
3 Driving skill set of chauffeur (i.e., smooth, comfortable ride)
4 Professional image/cleanliness of vehicle exterior
5 Personality/attitude of chauffeur
6 Having your trip route mapped out
7 Type/model of vehicle
8 Uniformed chauffeur
9 In-vehicle technology (Internet access, satellite radio, etc.)
10 Personalized vehicle amenities
Amenities don’t appear to be that important to corporate travelers, and the ones that do matter are easy to provide. Bottled water was the clear favorite, followed by interior temperature controls and a copy of the Wall Street Journal. Many of the other categories, such as soft drinks, coffee and satellite radio, received low ratings and the “Don’t Know/Not Important” designation was chosen by only 9% of respondents.
|Interior temperature controls||60%|
|Copy of Wall Street Journal
|Copy of major daily newspaper from that city||44%|
|Internet access for their laptop computers||34%|
|Copy of USA Today||21%|
|Copy of Business Week, Forbes or Fortune||11%|
|Don’t Know/Not Important||9%|
FAVORITE CHAUFFEUR PRACTICES
In terms of favorite chauffeur practices, respondents once again focused on the basics: on-time performance, clean vehicles and professional chauffeurs who know the area and the fastest routes. Using signs to ID the traveler and/or driver is also a nice touch and was chosen by 10% of respondents. Having a way to directly contact the driver or dispatcher also received nods.
|Professional/clean driver & vehicle||38%|
|Know the area & best routes||24%|
|Sign to ID passenger/driver||10%|
|Contact info for driver or dispatch||7%|
When it comes to annoying the heck out of business travelers, being late is number one with a bullet. The next four highest-rated categories all have to do with chauffeur behavior — getting lost, unsafe driving, excessively chatty drivers and rude drivers. It appears that business travelers are happiest when they get where they need to be on time, don’t have the stress of the chauffeur getting lost, asking them for directions or driving like a maniac, and have some peace and quiet for getting work done or just relaxing for awhile.
|Take wrong or inefficient route||37%|
|Unsafe or erratic driving||22%|
|Driver talks too much/on cell phone||21%|
|Unprofessional/rude driver behavior||19%|
|Car not clean||17%|
|Can’t find driver||10%|
Lincoln Town Car sedans are preferred by more than half of survey respondents. Thirty-seven percent have no preference. This is an interesting statistic because it suggests that the Town Car has become entrenched as the livery vehicle industry standard. However, with more than one-third expressing no preference, the data suggests that other vehicles could make inroads if they fit that same corporate, professional image.
|Lincoln Town Car sedan||54%|
Check out this gnarly compilation of scenes to expect from the upcoming tradeshow.
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