Industry Research

What's Eating At The Industry This Year?

  • Insurance Hikes
  • Soft first quarter for business travel 
  • Tech confusion
  • TNC heartburn
  • Employee retention and recruitment

Let’s tackle these five issues one at a time.

Insurance renewals have jumped up at alarming rates this year and we’re not sure why. I spoke to Peter Pantuso at the American Bus Association last month and he said the tour bus market hasn’t been affected at all. I understand our market segment has seen it’s unfair share of party bus accidents, presenting a case for insurers to move away from that niche. On this issue, I side with the insurers. It’s too risky to insure rolling night clubs.

When intoxicated passengers can stand up in a moving vehicle, nothing good is going to come from it. It’s a situation fraught with peril. However, if you are operating a corporate-oriented business and have followed all the right protocols including driver training, maintenance, and low loss-runs, the huge hikes are simply unfair (and a bit suspicious). LCT has pledged to conduct an investigative report on the matter and will be following through with a feature in the upcoming August issue.

Business travel was set to see record highs in the first quarter of 2016 until the terrorist attacks in France and Belgium disrupted the market and created a shock wave of travel cancellations abroad. This has had a ripple effect on airport runs nationally. All things considered, travel is expected to end up 5% year over year. So why are operators telling us business is off?

We believe it has less to do with corporate travel budgets or even Uber, and more to do with our industry showing signs of aging. In most markets, Uber has not significantly affected our industry. There are exceptions, of course. The hotel sector (the concierge industry) in urban areas such as New York and San Francisco are working closer with Uber. But that’s okay. They are price driven. To compete against that business is simply a race to the bottom.

The real issue we face is an overreliance on outsourcing and networking to “share” clients rather than good old-fashioned selling and servicing customers. The more we think of ourselves as transportation or logistics providers rather than a premium-level service, the more we shift away from deep relationships with our clients to just being in the people-mover business. After so long, accounts atrophy. Business travel managers tell me the only time a chauffeured service contacts them is when a contract is up for renewal. They complain there is no support and no communication throughout the year from our industry. This can happen when we are overly focusing on our bottom line. But alas, the day of reckoning is upon us and we need to put on our client-relations hat and reestablish our connections.

Ironically, both our TNC dilemma and employee retention/recruitment challenges are intertwined. When you are having trouble hiring great people and Starbucks can’t fill positions fast enough, you have to ask yourself why. Dynamic, modern and hip companies draw people today. Employees and clients are looking for “experiences” in their lives. This is a very different mindset than days of old. You don’t get to decide what those experiences are. Your people and your customers must tell you what moves them – figuratively and literally! I love the new label of ‘disruptive’ businesses. There have always been disrupters – companies that come into a fuddy-duddy marketplace of “same old, same old” and do it with more flair and creativity.

Employees don’t quit companies; they quit management. Conversely, people don’t turn down opportunities to work for great companies or for the right opportunity, so make sure you are selling an exceptional company. Clients work the same way – they stay if they are happy. New customers are easier to find if the word on the street is your service is just what they are looking for (know thy client and win)!

I am happy to present to you our annual LCT FACT BOOK this month filled with stats that will help you develop a clearer picture of the industry’s mood. Use the second portion of this issue as a Buyers Guide. It lists every active vendor in the marketplace in an easy-to-view page format. And talk to us. Tell us what YOU, our customer, thinks and what MORE we can do for you!

Related Topics: American Bus Association, difficult clients, employee management, LCT Publisher, party buses, Safety & Insurance, Sara Eastwood-Richardson, TNCs

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