Regulations

California Operators Join Forces With Fellow Travelers

Martin Romjue
Posted on September 5, 2012

LCT EDITOR'S COLUMN/September 2012: The last few years have been hard on small businesses — a category that describes the vast bulk of chauffeured and charter transportation operations. A recession followed by uncertainty over taxes, government spending, public debt, and health care costs coupled with more aggressive regulation are deterring the bold risks and investment strategies needed to grow American businesses and create more jobs.

In this environment, individual business sectors and industries cannot go it alone, regardless of near-term profit margins. Look far enough and you’ll see that every business is not just part of a wider industry, but its industry belongs to an even wider slice of the U.S. economy. For chauffeured transportation and charter bus businesses, that slice encompasses airlines, hotels and resorts, restaurants and night clubs, convention venues, attractions, theme parks, state and national parks, festivals and parades, and retail centers. How well these separate industries perform collectively determines the fortunes of private sector ground transportation.

That’s why a recent alliance started between the Greater California Livery Association (www.gcla.org) and the California Travel Association (www.caltravel.org) can serve as a national model on how to team up to fight for the common business ground. This cooperation between the associations in a state with the most ground transportation carriers and one of the highest tourism volumes in the world packs much potential for protecting the interests of small business and the economic activity feeding them. Such an alliance — to be announced Sept. 19 at the GCLA’s annual Expo in Orange County, Calif. — would work in many other travel and tourism dependent states, such as Florida, New York, Nevada, Arizona, Colorado and Virginia/Maryland/D.C., to name a few.

I recently spoke with John Severini, the president and CEO of the California Travel Association (CalTravel), whose 25 years of experience includes executive positions at the Walt Disney Company and Trafalgar Tours USA, one of the largest tour companies in the nation. CalTravel represents an industry that generates $96 billion in annual spending in the state of California, sustaining one million jobs and contributing $6 billion in taxes each year to the state’s debt-ridden government. About 250 individual organizations, associations, and businesses of the size that carry rosters of many other businesses belong to CalTravel, which also lists the 400 managers, executives and owners from those 250 entities as members.

CalTravel monitors and advocates on issues that affect travel, tourism and hospitality-related businesses and associations, the same ones that often contract with chauffeured and charter bus operators to provide transportation for groups, tours, convention visitors, staycationers, and out-of-state visitors who prefer hassle-free private luxury transportation. It is an approach similar to that of the GCLA, which monitors and advocates on behalf of the chauffeured transportation companies.

Some of the rules and proposed laws that CalTravel has tracked, fought, or created awareness about read like a bureaucrat’s wish list of regulatory oversight: alcoholic beverage open containers, employee work hours, employee meal rest periods, independent contractors (sound familiar?), fitted bed sheets, theme park rides, sales and use taxes, and state park accesses. CalTrave’s role is to cast a wide net and advocate against excessive rules, Severini says.  

He outlined three broad goals behind CalTravel efforts to track and combat any number of such legislative and regulatory measures at different stages in the governmental process:

  1. Minimizing pass-along costs to customers: Businesses can only pass on and recover taxes, fees, surcharges, and regulatory costs up to a certain point. If such burdens drive rates beyond an attractive, competitive price point, businesses start eating losses. “If prices get inflated to a place that alienates people and puts you in a non-competitive situation, then it reduces overall demand,” Severini says. Bottom line: If the bed tax goes up, if theme park tickets go up, if transportation charges and fees go up, then travel and tourism costs more for customers, who eventually take a pass on booking trips.
  2. Creating jobs that stay: A healthy travel and tourism sector creates more jobs that cannot be shipped overseas or outsourced. Hotels, attractions, transportation companies, hospitality venues, etc. all need workers on state ground to meet demand. In a state with 10.7% unemployment that ranges even higher in some counties, private sector jobs that can be created quickly are critical for a sustainable economic recovery. Every 1% increase in California tourism generates an additional $950 million in spending and 9,000 new jobs.
  3. Igniting a true economic recovery: The healthier businesses become, the more they thrive and expand, the wider a base they create to generate tax revenues, and the more people work, pay taxes, and stay off public services. That adds up to a vibrant economy, which has eluded California and many other states now for a least half a decade.

Severini understands that most business owners and managers are not focused on advocacy because they are so busy running a business. He makes a pithy point: Advocacy is like an insurance policy; it protects and pays off long-term. He has three simple messages for operators in California — and beyond:

No. 1: “Once you see a bill or piece of legislation that places a tax or burden on your organization or reduces opportunities to attract customers, you get interested really quick.”

No. 2: “If you take individual bills that affect limo operators, those types of issues arise for the other sectors that are part of our organization. . . Our voice can be lent to yours to create a greater power to get things done.”

No. 3: “What happens in California is a likely precursor for the rest of the country. This is not like Las Vegas, where what happens here stays here.”

Related Topics: business travel, California operators, California Travel Association, Greater California Livery Association, group travel, industry politics, tourism

Martin Romjue Editor
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