Industry Research

2019 LCT Survey Results Show Industry In Flux

Martin Romjue
Posted on June 26, 2019
Chauffeured/limo operators who own or lease motorcoaches and/or provide coach and charter service grew by the largest margin so far, as the industry bumps motorcoach service up into the luxury category. (LCT file photo)

Chauffeured/limo operators who own or lease motorcoaches and/or provide coach and charter service grew by the largest margin so far, as the industry bumps motorcoach service up into the luxury category. (LCT file photo)

Let’s start with the bottom line good news: The financial picture for operators stands better this year than last.

Business Revenues

About six in 10 chauffeured/limo operators saw a revenue increase in 2018 compared to the year before, as did seven out of 10 motorcoach operators (this was the first year we asked coach operators about revenue).

In last year’s Fact Book, 54% of chauffeured/limo operators had seen revenues rise compared to the previous year.

2019-2020 LCT Fact Book here

Company Profits

The share of chauffeured limo operators who saw profits rise YOY (2018 v. 2017) is 45%, compared to 40% last year (2017 v. 2016).

Actual net profit margins for chauffeured/limo operators stayed firm this year at an average of 16% compared to 17% last year and 15.9% in 2017 (the median net profit margin this year is 15%). Motorcoach operators reported an average net profit margin of 15%.

Service Pricing

Two-thirds (66%) of chauffeured/limo operators held the line on rates and pricing in 2018, despite 67% reporting they lost some business in 2018 to transportation network companies (TNCs) like Uber and Lyft. Among motorcoach operators, 63% kept rates the same.

The share of rate raisers among chauffeured/limo operators was 28%, and 31% for motorcoach operators.

Industry Trends

Certain numbers stood out this year affirming trends we have been observing and hearing about anecdotally from operators:

More Motorcoaches

Chauffeured/limo operators who own or lease motorcoaches and/or provide coach and charter service grew by the largest margin so far. The survey shows 37% of companies offer motorcoach service, meaning they either run their own vehicles or provide the service via a subcontractor or affiliate.

One third of all chauffeured/limo operators own or lease at least one motorcoach, compared to 24% in 2018 and 18% in 2017. That boosts prospects for motorcoach sales, with 18% of chauffeured/limo operators planning to buy or lease at least one coach this year. Eight out of 10 motorcoach operators plan to buy at least one bus this year.

Company Sales

The industry is seeing the most consolidations, mergers, and acquisitions in at least 10 years, which is skewing fleet sizes larger in the medium and large categories. A combination of market competition, a strong economy, retirements, and TNCs are motivating more operators to buy or sell companies:

• 39% of operators indicate they would like to buy or acquire a transportation company in the next three years.
• 29% of operators indicate they would like to either sell their company or merge it with another one in the next three years.

Industry Revenue Outlook

One of the more difficult figures to arrive at is the annual operator revenue figure. This year, we kept it simple. Our survey shows the median annual revenue amount for a chauffeured/limo/ shuttle bus operator in the U.S. is $610,700. Dunn & Bradstreet Masterfile lists 7,326 owners of such companies. When you do the math, you get an annual revenue figure of about $4.47 billion.

For operators running 1-10 vehicles, which comprises about half the industry based on this year’s survey responses, the overall annual revenue figure would be $790 million. The median gross revenue figure for small-fleet operators in 2018 was $220,000 and the average was $341,000.

Supplier and vendor revenue varies depending on economic conditions. With the exception of OEMs, all of the industry vendors and suppliers are privately held companies, and most do not disclose annual revenue figures. Until we find a way to get the annual revenue figure of every industry vendor and supplier listed in this Fact Book, computing a total figure is a longshot or a guesstimate at best. So we left it alone.

About The Fact Book Survey

LCT emailed out the online annual Fact Book survey in two waves from February to May, getting a response rate with a margin of error of +/- 5% and a 95% confidence level. This year, we divided the survey up among four audience groups so it would be shorter for everyone. Each survey contained a round of universal basic identifier questions and then a segment of questions just for that group.

Related Topics: industry surveys, industry trends, LCT Fact Book, mergers & acquisitions, motorcoaches, profits, research and trends, revenue growth, revenues, service pricing

Martin Romjue Editor
Comments ( 1 )
  • Pierre Bernard

     | about 4 months ago

    That's good bottom line good news in the top line! Sixty and seventy percent with increased revenue (glad to have the motorcoach operators in) respectively, is certainly a positive note, in a poll that obviously took serious time (months) and energy to make. And net profit margins seem to hold steady; an important point in a clearly changing scene with competition from the likes of Uber and Lyft. Interesting then after that, about the motorcoaches, and the margins; the outlook. The whole article is well done. https://www.atlantagreatermetrolimousine.com/

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