The global network wins top honors for its chauffeured services.
ATLANTIC CITY, N.J. — Operators getting into or pursuing more of the motorcoach business can already tap some built-in benefits.
Most reputable chauffeured transportation companies offer luxury standards, high-touch customer service, 24/7 access, fleet management, and corporate and group contacts. The main hurdles are the finances, maintenance, and regulations for larger buses.
In a session titled “Sales Strategies for the Luxury Charter Market,” three operators with experience in motorcoaches and minibuses explained how operators can leverage their in-house expertise to gain more motorcoach business from different group transportation client markets. Panelists included Brett Barenholtz, co-owner and CEO of Above All Transportation and Boston Car Service in Boston, Mass; Michael Barreto, COO of Eagle Chauffeured Services in Upland, Penn., and Jason Kaplan, co-owner of the The Driver Provider in Phoenix, Ariz.
With fleets ranging from sedans to motorcoaches, operators who routinely handle large group transportation movements in a sense perform DMC functions and/or closely partner with them, Baretto added.
“I literally have an in-house DMC that can help me with management, help me create tours, and of course, I’m the first choice for transportation logistics for that DMC,” Baretto said. “We’re a very resourceful industry. Look in your markets, especially if you have smaller-sized DMCs because they can be an outsourced [way] for you to create better tour packages or event movements you didn’t have before. And it could be as simple as offering them a nest to land in.”
By solving overall transportation challenges for clients, you become a more helpful and convenient problem-solving asset to them, Kaplan said. “Just by presenting that, you’re moving up your value in the perception of your clients.
Barenholtz advised colleges and universities are major takers of bus business. “They’re trying to attract foreign travelers and foreign students to come in. So there’s a lot more opportunity for our industry to be able to get more large groups moving to and from transportation centers, train stations, or airports.”
The challenge for operators is to know where to look for clients and then research them, especially leads on social media, he said. “You can’t just start kicking up rocks and it’s going to be there. You’ve got to be almost a geologist or an archaeologist at a certain point, and really get forensic. I’m not a stalker, but I can get anyone’s name in this room, and in a matter of two minutes of doing a search, I know your Facebook profile and LinkedIn profile. I know your birthday; I know the last time you went out to party with your friends; the whole nine yards. Use that to your advantage. It’s free, open information.”
The same concept applies to hospitals and major employers, all of whom need reliable bus service. “Keep up with the news in your market,” Barenholtz said. “In our market, there are many companies now moving back into the city. So they now have 500, 1,000, 1,500 employees who were used to driving to a suburban location, and now they have to get transportation into the city every day. Most won’t have parking spots, and they’ll have to take some kind of public transportation. You can set up shuttle service with them.”
Before venturing into motorcoaches, an operator needs a strategic plan, given the high costs and the high volume needed to earn a profit, Kaplan said. “When you’re making the expenditures on a minibus or a motorcoach, those big dollars can eat away at your bank account real fast. So you really want to have a strategic plan before dipping your toe into this niche.”
Aside from the higher six-figure costs of even a used motorcoach, operators should plan on repairs and maintenance costs that well exceed those of traditional black luxury vehicles. A blown out window can cost $400 to $500 to replace. An alternator can go for $2,000. A tire can run into the hundreds.
“If you really pride yourself on analytics and finance, you have to delve in and do a mock perspective for a whole year or 18 months of what your costs will be to see if you are fully financially capable of doing this,” Baretto said. “Once you understand the finances, then you can see the operating costs per vehicle per month, and where your bottom line per hour of movement has to be. That’s very key. Because people will get a brand-new bus or a used bus, and they want business, and then they realize they’re undercutting themselves by $20 to $30 an hour that is eating into a complete profit. They end up paying more to have that vehicle operate out of their pocket than coming from the client.”
There’s also a value to having a bus after five years that Barenholtz admitted he’s just recently learing about. “You can operate a bus, make some money on it, and in five years down the road, that bus, because you’ve been paying it down on either a five or a seven-year note, you now have this equity in this bus that might be worth more than what you actually made on it the five years you were working on it.”
Tips On Running Big Luxury Buses
Throughout the discussion, panelists offered helpful tips and various aspects of running motorcoaches:
Pick your niches: You have to know what type of business you want to go after. Is it hotels, retail, tours, corporate contracts, hospitals, colleges, DMCs, etc.?
Grow a diverse client market base: Any client that has 15%, 20%, or more of your business could make your revenue stream vulnerable to big losses if that account disappears. Operators should get many small or medium accounts as well. While not as profitable as big accounts, they can stabilize an operation.
All-inclusive services: Don’t charge motorcoach clients extra for chauffeured-style amenities such as greeters. Treat the bus clients like chauffeured ones and include high-touch service attributes. That will give you an advantage over traditional motorcoach-only operations.
Go for small accounts: Don’t be put off by the $20,000 account versus the six-figure ones. Larger fleet operators often don’t want the small accounts, which means small- to medium-size fleet operators have the right scale to match the transportation needs of lower volume clients.
Do your farm-out math: If you are farming out a growing bus client business, determine the revenue volume versus the costs of a motorcoach and its operation. Looking closely at the data helps you make the right decision and eventually get profitable results.
Get the word out: Market, promote, and advertise your motocoaches, especially to your long, loyal client base that thinks you only have black luxury chauffeured vehicles. It takes effort to educate your client base and update your public.
Related Topics: Brett Barenholtz, charter and tour operators, corporate travel, How To, Jason Kaplan, LCT-NLA Show East, Luxury Coach & Transportation, luxury tours, Mike Barreto, motorcoach operators, tour buses, tourism
The global network wins top honors for its chauffeured services.
Global Communications director Adam Parken is interviewed by Forbes magazine.
In the months since going public, the TNC has made a series of cuts to its corporate workforce totaling more than 1,000 employees.
The Virginia-Beach based carrier recently received a city grant as it's set to provide two daily non-stop trips between the two regions.
HIGHLIGHTS: This year’s streamlined event reminded operators of what really matters the most in serving ground transportation clients and each other.
The annual LCT Operator of the Year Awards recognize the latest and most current in business achievement.
Stephanie Carnes of The LMC Groups outlined how to excel with digital marketing during a recent GGTI webinar.
A panel at LCT East hosted by operator Nick Kokas explored possibilities industry tech providers are working toward making a reality.
The company now has vehicles at the Gaylord National Resort, the largest non-gaming convention center on the East Coast.
With tours to all parts of the U.S. and Canada and cruises that span the Caribbean, the company loves providing excursions.
While efforts were cut short, the enforcement actions provided valuable insights to everyone involved.
The secret to putting the strategy in place is to present it in ways that people want to pay more without demanding they do so.
The groups focus on gaining direct industry knowledge while saving the time and travel costs of in-person groups.
The independent magazine and trade show brand secures its future as the luxury ground transportation’s top professional business resource.
eNews Exclusive: While a vast network can expand your contacts, Mandy Cicero relies on instincts to guide her in leading a better company.
The world's No. 1 online marketplace and trader for professional chauffeured and chartered vehicles, including all types of motorcoaches, buses, vans, stretch limousines, sedans, SUVs, exotics, and classics. New and used vehicles are available from sellers across the nation.
The best online networker to find quality affiliates worldwide and market your company.
Click on any state to see the latest industry news and events in that region.
Get the latest news and most popular articles from LCT delivered straight to your inbox.