Industry Research

Dreams To Reality: New Client Sources For Luxury Service

Martin Romjue
Posted on April 27, 2019

The economy is scraping 3% annual growth, the courtesy shuttle market presents new markets for operators, business travel and meetings business looks healthy, and the conveniences of mobile technology will help operators ease the use of their service for clients, LCT Publisher Sara Eastwood-Richardson told a ballroom of attendees during the state of the industry presentation at the International LCT Show, Monday, March 25, 2019. (LCT photo)

The economy is scraping 3% annual growth, the courtesy shuttle market presents new markets for operators, business travel and meetings business looks healthy, and the conveniences of mobile technology will help operators ease the use of their service for clients, LCT Publisher Sara Eastwood-Richardson told a ballroom of attendees during the state of the industry presentation at the International LCT Show, Monday, March 25, 2019. (LCT photo)

LAS VEGAS — As the International LCT Show marked its 35th anniversary, the luxury ground transportation industry can look to many sources of growth and opportunity, according to the annual State of the Industry presentation that opened the show on March 25.

The economy is scraping 3% annual growth, the courtesy shuttle market presents new markets for operators, business travel and meetings business looks healthy, and the conveniences of mobile technology will help operators ease the use of their service for clients, LCT Publisher Sara Eastwood-Richardson told a ballroom of attendees.

The outlook supports this year’s conference theme of “Dream Big,” a basic requirement for ambitious entrepreneurs and business owners who pursue a vision.
Citing the famous saying, “the word impossible says to you ‘I’m Possible,’’ Sara urged attendees to dream like a wild-eyed entrepreneur and ignore the naysayers. Fulfill your dreams no matter what, she said.

Overall, the economic outlook for 2019 appears to still be on a path for growth despite the uncertainty of the stock market, which has been rebounding this Spring. Unemployment is below 4%. The long-awaited upward pressure on wages is boosting consumer spending.

A packed audience attends the annual luxury ground transportation industry State of the Industry presentation March 25 at Mandalay Bay in Las Vegas. The annual session kicks off the International LCT Show. (LCT photo)

A packed audience attends the annual luxury ground transportation industry State of the Industry presentation March 25 at Mandalay Bay in Las Vegas. The annual session kicks off the International LCT Show. (LCT photo)

Business Travel & Meetings

For the sixth straight year, the Global Business Travel Association (GBTA) predicts budget and spending increases for 2019 across the board. “GBTA is warning travel managers to expect suppliers – like you - to raise rates in 2019, so take this as a good sign,” Sara said. “Stay strong in the face of raising rates.” Among business travel costs and budgets, car service accounts for 5% of the overall spend.
One hot button travel manager topic is women now make up more than 40% of business travel. “That changes priorities, like security, which is a topic now at the top of the checklist for travel management.”

Recently, the number of meetings and industry gatherings have exploded, which is good for luxury transportation. Meetings are becoming larger and more frequent, yet shorter in duration, according to American Express Travel and Meetings Magazine.

In addition to traditional mega shows, niche events focused on one topic are growing in every market segment. This means more people-movement opportunities for operators, who should attend Meeting Planners International (MPI) gatherings and make the rounds to large local businesses hosting events and sending their teams to them. “There’s good work waiting for you to cash in on.”

5 BIG Shuttle Bus And Van Opportunities

Here are the best places to mine local markets for courtesy shuttle work:
1: Employee movement. The growing trend for large corporate is to build “campuses,” and that has led to adding employee transportation to the “perk” list. This residual work is contracted directly and paid to the transportation provider monthly. This business comes with tax incentives.

2: Retirement community living. Look for “independent living campuses” as a possible shuttle opportunity. This market is booming – especially in the high-end space with brands like Global Hyatt taking full advantage. Marriott is moving its Washington, DC corporate headquarters across town, and when they do, the building they are vacating will be turned into a five-building retirement campus home to 15,000 residents.

“You should know securing these transportation contracts can be tricky,” Sara said. “Most of the fixed route business on a loop is done in-house, and is exempt from regulations. So when you go to meet with your local independent living facility management, focus on their excursions, day trips, nights out, trips to the airport, etcetera — all those transportation needs fall under “charter,” which in most cases is deemed “for-hire” work. That is yours to go after.”  

3: Collegiate work. The transportation needs of colleges are layered with inner campus fixed route shuttles and off campus shuttles that take kids from school to town. That’s tricky to get. But you can also pursue charter work. That includes everything from college promotions and events to athletic contract work. Schools expect a 10% donation back to them, so operators who contract with them should factor it in.

4: Custom tours and super coach charters. Chinese tourism travel is booming in the U.S. They spend twice as much as domestic travelers. If you can target their popular vacation times, you can cancel your off-season discounts. Chinese tourism is busiest in early October, their Golden Week, and Chinese New Year in late January or early February.

5: Unique experiences: Another big trend is the growing number of travelers looking for “unique” experiences. Within the industry, many operators like Todd Roberts of JACO Limousine in Louisville, Kentucky, have created niche tours and experiences. JACO, for example, specializes in Bourbon whiskey tasting tours, similar to wine and craft beer tours.
“Instagram playgrounds are taking over museum scholastic traffic. What cool experiences are right outside your door? Dream it up, and team up with other local business and create a custom day trip experience and get it out there on social media.”

Uber & Lyft

Puncturing a myth about transportation network companies (TNCs), recent numbers show luxury ground transportation provides better value and a lower cost per mile.

The average Uber or Lyft trip spans six miles at an average cost of $28.25, or $4.70 per mile, including tip. For this industry, the average trip is 28 miles at a cost of $120 including tip, or $4.29 per mile.

The industry provides a better deal for drivers as well. Uber drivers earn a median of $8.55 per hours, whereas chauffeurs average $16.81 per hour.
While Uber may be capitalized at $76 billion, it continues to post losses, most recently $1.8 billion for 2018. The chauffeured luxury transportation industry remains healthy and profitable. More than six out of 10 operators enjoyed increased gross revenues last year.

“At some point, there will be a reckoning to deal with the bottom line,” Sara said. “Uber makes a lot of money, but it loses a lot more. While this might pass in a young startup with magnetic appeal to rich investors, this endless flushing of money down the toilet should be unbecoming to a sizeable publicly-traded institution.”

Need For Speed

Mobile technology is fast replacing the PC as the No. 1 business tool. Websites must be mobile responsive, not just mobile friendly. Operator sites should automatically adjust to fit any screen to accommodate clients accessing your company by phone. Page load speed is a hot button topic. According to Digital Marketer, if your page loads speed exceeds three seconds, your bounce rate will increase sharply.

What If You Fail?

Failure is a catalyst for success, and you can’t have one without the other, Sara told attendees.

“No matter what it is we’re talking about in life, if you focus on it, you’ll get more of it,” she said. Failure makes you think and breeds the skills needed to excel. Short-lived successes only lead to fleeting satisfaction, she said. “Don’t be afraid to dream just because you might fail. Failure will help build character and give you the tools to succeed.”

Related Topics: building your clientele, business expansion, business growth, GBTA, Global Business Travel Association, ILCT 2019, industry trends, LCT Publisher, research and trends, revenue growth, Sara Eastwood-Richardson, shuttle buses, shuttle vans

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