Back at the Front of the Pack The limousine services industry has made a dramatic comeback since 2008, when total operators’ revenues were $2.17 billion. Total revenues for 2014 were $3.3 billion, an 11.5% increase over 2013, and 52.1% more than 2008. Although the industry had significant mergers and acquisitions during 2014, there were a total of 12,106 operators during May 2015, compared to 11,420 for 2014. The number of limo/chauffeured operators declined slightly to 8,305 from 8,339. Mergers and acquisitions were also largely responsible for the decrease in the total number of chauffeured vehicles in service, from 115,600 during May 2014 to 108,000 as of May 2015. The average chauffeured fleet size also declined from 25 to 23.

Operator Optimism Operators and limousine companies certainly benefited from the 11.5% increase in industry revenues, as the average gross profit margin increased 20.7%, compared to an 18.7% increase for 2013, and more than twice 2011’s 10%. Mergers and acquisitions were likely responsible for changes to the market share of operators/companies, as those considered small (1–10 vehicles) decreased from 65% to 55% while large companies (51+ vehicles) increased from 4% to 13%. Despite a smaller share of the market, small operators/companies increased their number of monthly runs from 200 for 2013 to 387 during 2014. Large operators/companies’ monthly runs also increased from 3,939 to 4,786.

Increasing Investment in People and Wheels Not surprisingly, the largest expense for limousine operators and companies of all sizes is labor/wages/benefits, at approximately 25%; but 90% will be hiring chauffeurs; 35%, salespeople; and 48%, reservationists, during 2015. As with the broader automotive market, 2014 limousine vehicle fleet sales increased again during 2014, to 5,167 units, compared to 4,850 for 2013. Operators are planning to purchase 8 new vehicles during 2015, which was the same as 2014. The seven most-common reservation sources didn’t change much from 2013 to 2014, with phone-ins still #1, at 90%; followed by company Website, 84%; and third-party limo Website/lead referral services, 43%.

Digital Drive Time Only 19% of limousine companies have a custom mobile app and 25% (the most) of those with a Facebook page post to their site approximately once a month. Despite being behind the “tech curve,” 18% of companies were very satisfied and 35% were somewhat satisfied with the results of their social media activities. Internet/online sources generated an average of 35% of all reservations. Social media was second of operators’ three primary advertising platforms, at 52%. Online directories/services were first at 54%.

Motorcoach Market Downshift With 3,801 US and Canadian motorcoach companies operating during 2014, compared to 3,954 for 2013, the US Bureau of Economic Analysis reported a modest 1.3% increase in the real output of scenic and sightseeing transportation services for 2014. Most services data declined during 2014: total number of passenger trips were 605.1 million, compared to 637 million for 2013 and total miles were 1.86 billion vs. 2.1 billion for 2013; however, passenger trips per motorcoach increased from 16,100 to 16,400. The demographics of motorcoach passenger trips changed somewhat with students declining from 24% to 21%. Seniors increased from 26% to 28% and adults (other than seniors) from 50% to 51%.

An Uber in the Road During 2013, transportation network companies (TNCs), such as Uber, Lyft and Sidecar, were #8 among limousine operators/companies’ biggest concerns, at 36%. For 2014, TNCs climbed to #4, at 44%. Despite their concern, 53% of operators and companies said TNCs do not affect their market/client base, according to the Limousine, Charter & Tour magazine’s 2015 Fact Book survey. Another 26% said the effect was 10% or less. Many industry experts and limousine companies don’t consider TNCs as competitors since they are essentially on-demand taxi services while limousine services are more focused on their 75% share of Corporate America transportation.

Advertising Strategies According to the LCT Magazine 2015 Fact Book, TV is #9 on limousine services’ list of primary advertising channels. As a starting point, recommend that companies place ads on your station’s Website, especially if you have a travel section or travel stories. For those limousine services of sufficient size to afford and benefit from TV, suggest a flight pre-Thanksgiving and Christmas with a special to transport families from airports to local families’ homes where they are spending the holidays. Limousine services may want to consider a flight of spots sometime during Q4 to promote a New Year’s Eve special; and the week after Christmas may be a good time for an advanced wedding and/or prom booking offer.

Social Media Strategies As with many of your smaller retail and B2B clients, many are not taking full advantage of digital media, which provides you with an opportunity to share the many New Media Insights Reports from THE MEDIACENTER to help clients develop a program. Limousines are the perfect environment for using live-streaming apps, such as Periscope, Meerkat, YouNow and NomadCast, to promote the luxurious ride and superior service and stream live comments from passengers about the professionalism of the driver, etc. Limousine services should ask all customers to share their ride stories on the companies’ social media pages, especially as it relates to how the service benefited the passenger: no driving stress, enhanced the fun of an event, time to focus on business and networking, etc.