Operations

Local Family Operation Taps Insider Expertise

Martin Romjue
Posted on April 19, 2018
Andy Hernandez had been eyeing his location, a full-service repair shop, for years until a lease with an option to buy became available. Hernandez had it built out and modified with a wash bay, and plans further improvements. It sits four miles from the San Antonio International Airport (photos by Martin Romjue/LCT)
Andy Hernandez had been eyeing his location, a full-service repair shop, for years until a lease with an option to buy became available. Hernandez had it built out and modified with a wash bay, and plans further improvements. It sits four miles from the San Antonio International Airport (photos by Martin Romjue/LCT)

SAN ANTONIO, Texas — Operator Andy Hernandez moved his company last year to a site only three blocks from the street where he grew up. Aside from the convenience, the relocation shows a ground transportation operation making the most of local ties to find clients and stay ahead of the one-way-fits-all approach of TNCs.

As a result, CTA Worldwide Chauffeured Transportation has grown into a mid-sized fleet operation reoriented to group transportation serving an economically vibrant second-tier metro area. San Antonio boasts the most visited tourist site in Texas, the Alamo, and has made itself into a highly walkable convention town with diverse hotels and restaurants lining a scenic Riverwalk that stretches for many miles.

CTA (Corporate Transportation Associates) has proven profitable in the last four years despite the onslaught of transportation network companies (TNCs), rising insurance rates, and chauffeur and driver shortages. Hernandez reports annual revenues have risen from $655,000 in 2014 to just over $3 million last year.

Going Local
For operators like Hernandez navigating a disrupted ground transportation sector, approaches include using technology to build a reliable affiliate and meetings-planner network, pursuing DMC and events markets, farming out motorcoach work, and breaking out finances per vehicle.

“Why let someone grab corporate clients when I’m here in this market?” Hernandez says. With the help of GRiDD Technologies’ G-Net instant affiliate and booking network and Livery Coach software, Hernandez has formed his own affiliate and events contacts, which enables his company to coordinate events transportation in other cities as well. He looks for event planners who prefer to work directly with ground transportation providers. Livery Coach has developed an iGroup Access app through its iLivery product that enables meeting planners to work with transportation providers, making the booking process paperless and seamless.

FASTFACTS: CTA Worldwide Chauffeured Transportation
Locations: San Antonio and Austin, Texas
Founded: 2014
Owner: Andy Hernandez
Fleet vehicles: 27
Vehicles types/makes/models: Sedans, SUVs, executive Sprinters, mini-Coaches
Chauffeurs/drivers: 50 (full-time 23, part-time 27)
Total employees: 62
Key managers: Sara Nanez (San Antonio GM), Jerrod Hammonds (Austin GM), Cathy Hernandez (CFO)
Annual revenues: $3.1 million, 2017
Key clients: Corporate, DMC, affiliate, high school/collegiate, government
Website: www.CTALimo.com
Information: San Antonio: (210) 829-8608 / Austin: (512) 222-3209



A Connected Strategy
Hernandez sums up his marketing and growth strategy with a ready list: “Customer retention, direct sales calls, participation at LCT Shows, attention to detail, and being available to all customers, big or small.” CTA’s client mix includes technology, pharmaceutical, and automotive companies, with Coca-Cola and Disney among its big name clients through DMC work.

Hernandez treats CTA like a family business, with continued guidance from his semi-retired father and his mother, Cathy, who works as the CFO. The family roots go back to 2002, when Andy’s father, Tony Hernandez, ran the former A-1 Limousine with his son’s help.
Hernandez treats CTA like a family business, with continued guidance from his semi-retired father and his mother, Cathy, who works as the CFO. The family roots go back to 2002, when Andy’s father, Tony Hernandez, ran the former A-1 Limousine with his son’s help.
The company runs 27 fleet vehicles with the flexibility to go up to 30, which Hernandez refers to as a “manageable size. We want to increase revenue with our current equipment,” he says. CTA averages about 70 rides per day, with about 40% farm-ins from affiliates.

Hernandez treats CTA like a family business, with continued guidance from his semi-retired father and his mother, Cathy, who works as the CFO. The family roots go back to 2002, when Andy’s father, Tony Hernandez, ran the former A-1 Limousine with his son’s help.

In 2012, Tony sold A-1 Limousine to a company in Austin. Andy considered the night club business among other options, but nothing could match the experience of limousine operations.

“I wanted to get back in,” Hernandez says. “I missed the camaraderie. I missed the chaos, the stress, the high you get from a job well done when the odds are stacked against us, like airlines running late, mechanical issues, and having to be flexible with schedule changes.”

In 2014, Hernandez went to Acton SoCal Penske Professional Vehicles and bought a diverse fleet of 14 vehicles to start CTA. In hindsight, it was two or three too many, since some were sitting more than moving. He started looking for transportation service buyers in his hometown and in Texas, making his pitch to potential corporate clients, travel agencies, and DMCs. He also got involved with local business travel groups and helped sponsor events. He generated a client flow that now breaks down to about 60% DMC work and 35-40% corporate runs.

CTA previously used a smaller facility near the San Antonio International Airport that accommodated a 10-vehicle fleet. Once it ventured into more affiliate and destination management company (DMC) work, it bought four Federal minibuses and soon outgrew its parking area. CTA’s 27-vehicle fleet has 10 buses, and multiple vehicles assigned to Austin 75 miles away. In June 2017, the company added seven vehicles as part of what Hernandez calls steady growth.

Hernandez modified the interior of the former repair shop into two floors of offices, a chauffeur lounge, and storage. Sara Nanez manages the San Antonio operation.
Hernandez modified the interior of the former repair shop into two floors of offices, a chauffeur lounge, and storage. Sara Nanez manages the San Antonio operation.
Chauffeurs & Insurance

Hernandez faces familiar challenges in his company common to many operators, such as finding qualified chauffeurs who look at their work as a career instead of a job, and dealing with insurance premiums that rise despite excellent loss-run records.

His chauffeur turnover is about 20% per year, up from 10%. Companies can provide chauffeurs personal finance education to help them budget out their income to cover slower or seasonal down periods during the year, he says. Many get overtime pay during the busy seasons but often don’t account for months with only a regular or reduced income.

To improve safety and minimize insurance premiums, his company does the following:

• Equip each vehicle with a Lytx DriveCam and subscribe to the fully managed system. “With the Lytx program we can improve upon a chauffeur’s improper driving techniques to help make them safer behind the wheel and offer a smoother and safer ride for the passenger,” he says.

• CTA holds quarterly safety meetings that cover a wide range of topics, from customer service to defensive driving.

• During its onboarding process, chauffeurs must pass a driving exam with the fleet/safety manger, watch a two-hour video covering a wide range of driving safety topics, and pass a quiz.

Minibuses Trump TNCs
In the Austin and San Antonio markets, the niche of individual corporate clients has declined as they use other forms of ground transportation. On a national level, the typical evening sedan or SUV hourly run has also slowed.

“It used to be an executive would arrive at an airport, and the vehicle would pick him or her up, deliver to a hotel to check-in and freshen up, proceed to dinner, wait, and return back to hotel for a final drop-off,” Hernandez says. “Today, we are seeing the last part of the trip cut short. Once we take the passenger to dinner the vehicle is being released and they are opting to take an Uber back to the hotel instead of having the vehicle wait.” He estimates this has resulted in at least one and a half to two hour billable loss.

To make up for such lost business, Hernandez pursues the minibus and shuttle markets, such as employee parking shuttles in addition to DMC and tour work. His company uses the four Federal-built minibuses as shuttles and six Grech Motors buses for DMC, corporate, and high-end small group runs. His Grech buses can accommodate from 23 to 50 passengers, depending on the model.

For groups with luggage, Hernandez finds it feasible to rent a luggage van that follows the minibus. This not only saves money but allows the chauffeur to fully focus on client service. Cargo van drivers load and unload the luggage, and can double as greeters.

As part of his financial tracking, Hernandez practices an oft-recommended method for fleet operations: He breaks out each vehicle as its own P&L unit. His minibuses gross the highest and net the most profit, while his sedans rank the lowest, but still run in the black. The SUVs and Sprinters fall in the middle of those two vehicles, with minibuses and Sprinters capturing the most business.

“Each vehicle holds its own and funds its expenses for profitability,” Hernandez says.

Related Topics: business growth, group transportation, meetings and conventions, operator profiles, Texas operators, tips for success

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