Operations

How Florida Operators Are Surviving the Downturn

LCT Staff
Posted on August 27, 2008

DAYTONA BEACH, Fla. – Cutting your own paycheck may seem a bit drastic, but it's one thing Dave Barton did to help keep his limousine business afloat during the economic decline and a 40%-plus rise in gas prices in a year.

"It's been rough. Business is down 40% to 50%. A lot of smaller operators have not survived," said Barton, owner of Orange City-based Goldrush Productions and a board member of the Greater Orlando Limousine Association.

Prices in Florida leaped from $2.73 for a gallon of regular in mid-September 2007 to more than $4 a gallon last month, but dropped to $3.74 last week, according to AAA Auto Club South.

The problem is nationwide.

Richard Kane, president of the National Limousine Association, said 4% of members have shut down in the past year, mostly pressured by fuel costs. But overall membership is growing as operators scramble for information on how to stay afloat.

"They're looking for relief," said Kane, who owns the International Limousine Service in Washington, D.C. "Gas prices are killing us, and we can't get the difference out of our customers."

Barton trimmed his company's budget by 40%, almost $75,000, he said. His salary topped the list that also included relocating the business from a rented storefront to his home. He also amended and reinforced driver policies to drive slow, start easy and turn off idling cars, all intended to save fuel cost that have grown from 5% of the business expense to 15%.

"We cut as much as we could. We still have fixed costs like insurance, that is always going up too, vehicle maintenance and drivers," Barton said. "We actually cut prices to attract business. People looking for a limo can get some great deals now."

Barton also operates a DJ, video and photography business with the limos. Although those businesses are down, too, it's not as bad as the limos, he said. Weddings, birthday parties, anniversary and bachelor parties remain the staples.

The number of limos rented this past spring for high school proms was "the worst in many years," and couples taking a romantic night on the town are way down.

Chris Hundley, longtime owner of Limousine Connection in Los Angeles, made his operation more efficient. He tries to drive more than one passenger at a time, uses e-mail invoices to stay paperless, and rents Priuses when patrons request them.

Daytona Limos, based in Ormond Beach, is one of the newcomers to the industry and a national association member, having started up 18 months ago, owner Byron Hepbert said.

"We saw a real lack of service in the area. We have positioned ourselves well with high end clients," he said. "The limo business is about luxury and that is what we give our clients. We may cost more, but they get more. We have not seen where higher gas prices have stopped people from renting a limo."

Source: Daytona Beach News-Journal

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