Oklahoma Operators Expecting Huge Retail Season

LCT Staff
Posted on November 14, 2007

TULSA, Okla. — It's beginning to look a lot like Christmas for Oklahoma's limousine operators. "Usually I don't have any bookings until the week after Thanksgiving, and now I've got several for November and several for December," said Cory Duarte, owner of Absolute Limousine of Tulsa.

The attraction? Christmas light tours, an increasingly competitive field for chauffeurs of stretched Hummers, Lincolns, Cadillacs, even Dodge Chargers. Charles "Chuck" Cotton, owner of VIP Limousine in Oklahoma City and Tulsa, started running his light tour ads last week.

"If you don't book now, you may lose out," he said.

That can't come fast enough for some operators. Jimmy Paris, the owner of Paris Limousine in Oklahoma City, has watched nine competitors go bankrupt or out of business since April. Part of that he pinned on the loss of the NBA's Hornets, but he attributes more to a general slowdown.

"We've had four years of straight growth in the limousine business," said the 20-year industry veteran, who operates a fleet of 28 stretch limousines and seven sedans. "That's the longest period I've ever seen in the limousine business, four years. You kind of wonder when the light's going out. I kind of think that's going on now."

That's why these operators embrace the holidays, which spur limo traffic not just to see lights, but deliver party guests and take in colorful dances and other grand events. By some counts, the limousine industry draws a quarter of its annual revenue in November and December, culminating with its biggest night of the year, New Year's Eve.

"For me it's even more," said Duarte, a former VIP worker whose firm operates four stretch limos. "I'm probably shooting 32% to 35%."

While acknowledging the economic troubles, Cotton also those factors providing a temporary benefit this Christmas.

"We think this retail season will be the bigger than ever," he said, basing that not just on Oklahoma's economic resilience, but on national credit fears that have spurred financial institutions bitten on their subprime loans to increase credit lines to good customers. Cotton expects that to naturally increase short-term holiday spending.

"We're just happy for a small piece of that," he said, since 90% of VIP transactions involve credit cards.

Cotton will soon add a second Hummer limo and two more 120-inch stretch Lincolns to his fleet of 16 limousines and eight sedans, vans or limo buses, all to grab more charters in his 17th season of Christmas light tours.

"They're extremely popular," he said of the drives, which on Christmas Eve offer a special bonus of riding with Santa. That's because Oklahomans put a great deal of love into such displays, said Paris.

"We have people who come in from all around the country to see the Christmas lights here because we do such a good job here," he said. "We still recognize an old-fashioned Christmas here."

But the highlight comes New Year's Eve. While the night hot spots in Tulsa's Cherry Street or Oklahoma City's Bricktown districts attract regular business, Cotton said all such activity kicks into high gear on Dec. 31.

That's when trips to Jewel in Tulsa's Brookside District, "Almost every party run ends up there," said Cotton or the Memorial Road restaurants in Oklahoma City go from weekly occurrences to a hectic rush.

While this has marked the chauffeur's pattern for several years, in the last couple of seasons Cotton has seen two gaming centers change his customer traffic patterns, the Cherokee Casino at Catoosa and the Riverwind Casino in south Norman.

"We're seeing a lot of the bachelor and bachelorette parties heading to the casino," he said of Cherokee. "That's the number one thing."

VIP Limo has seen similar trends with Riverwind, often following Bricktown visits. "The out-of-town people, the tourists, that's where they're heading," said Cotton. "They go to Bricktown and then they take the limo to Riverwind."

Going forward. Not everything shines in this sector usually driven by discretionary spending. "The centennial for us has made the difference," Paris said of his annual revenue. "Otherwise it would just be an additional year."

Rising fuel costs remain a concern. Paris said that, and an increasing desire for anonymity, could drive more traffic into his black sedans and SUVs from stretch limos.

"We're seeing more and more celebrities, you're talking guys who could get limousines any day they want, they want something less suspicious, conspicuous," he said. "I see a 25% trend toward that type of transportation right now."

Cotton reports seeing an immediate bottom-line impact from the crackdown on immigration laws. The cause — a decline in charters tied to Quinceañera coming-of-age celebrations.

"It's just come to a screeching halt," said Cotton. "That's hurt our business some. The last two months we haven't done one statewide." Paris shared that observation, although not to that extent. Duarte's had a different experience. "Most of the time I'll do two every Saturday," he said.

Despite those factors, VIP has recorded an 8% increase in revenue so far this year. "We're expecting probably a 15% increase over last year," said Cotton, continuing a string of 17-straight years with record revenue growth in an increasingly diverse, still-vibrant Oklahoma economy.

"We're projecting another record year in 2008 in spite of the high fuel costs because people are willing to spend their hard-earned dollars to celebrate their special occasions," he said. "That's always going to be stable."

Duarte also expects growth, adding at least one new limo to his fleet in January. But Paris still sees storms on the horizon, ones even Oklahoma's strong oil and gas sector may not be able to blow away.

"I see right now anywhere from a 22% to 28% slowdown in the next year," he said, reflecting on both positive and negative factors, from the presidential election to strong football and concert seasons. "But it's scary out there. Let's face it."

SOURCE: The Journal Record

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