How one limo company is meeting the future.
Three travel industry sectors, the airlines, lodging establishments and car rental firms, dominate the news about continued revenue growth and recovery in 2010. But what is going on in the limo business? “From a volume perspective, chauffeured ground transportation is still a cottage industry,” observes David Seelinger, chairman and CEO of EmpireCLS, “and limousine companies are seldom included in travel industry bellwether reports.”
EmpireCLS, which provides chauffeured limousine services in more than 650 cities worldwide, reports that it has also enjoyed an increase in revenue. “Through the end of September, we’re up 10.6 percent year-to-date, and we’re expecting the late fall months to be some of the strongest in years,” says Seelinger.
Cost Versus Value
The industry is going through a unique supply and demand situation, explains Empire’s CEO. The tough economy saw some ground transportation firms go out of business over the last two years. “Now, as corporations realize the need to get their people back on the road to sell and service customers face-to-face, there’s been an increase in demand for excellent chauffeured services, but a decrease in the supply of qualified operators.”
Demand up, supply down: sounds like a perfect opportunity for pricing to get out of line.
But it hasn’t.
Despite the shift in supply and demand dynamics, corporate travel buyers are still price sensitive. Over the last couple years, corporate RFPs and decision processes have placed considerable emphasis on pricing, notes Seelinger, “but buyers learned that selecting the cheapest provider isn’t a good decision to make, as these suppliers often don’t operate at the standards of practice they need to so that travelers are comfortable about safety.”
Savvy corporate travel buyers are now factoring in a number of other critical elements beyond price. “The makes, models and age of the vehicles, the qualifications and training of drivers, the automobile servicing schedules, safety standards which the operators observe, accident avoidance training received by drivers, commitment to ‘green’ operating practices, even the comfort amenities received by travelers, all make their way into the better RFPs and into the decision making process for a ground transportation provider,” says Seelinger. In so many ways, the right decision is becoming more about value — not cost.
First, Get The Basics Right
After nearly 30 years in the chauffeured transportation business, Seelinger has experienced a vast range of change, and has also gained an appreciation of some immutable basics in the industry.
“We serve two customers, and they are both equally important to us,” says Seelinger.
The first customer is the passenger. “The passenger has a set of expectations that must be met on every trip. The passenger expects a clean, safe, well-serviced, comfortable — even luxurious — automobile. And the passenger also expects to be driven by a polite, knowledgeable, prompt, discrete, uniformed chauffeur who is well-trained in accident avoidance, and who will safely arrive at the destination on time and with no hassle,” says Seelinger.
“Our other most important customer is the chauffeur,” Seelinger continues. “Everything our management team does, everything our service people achieve, everything our training and operations staffs strive for, is to give the chauffeur the resources he or she needs to create a safe, efficient, worry-free passenger travel experience.”
Finding the right chauffeurs is a process. “It’s not uncommon for us to interview 90 candidates,” says Seelinger.
“After background checks, drivers license verifications, psychological evaluations, we’re down to 40. Once the rest of the screening procedures are completed, we have six fully vetted, exceptional candidates in the EmpireCLS classroom.”
Seelinger believes it is an honor to come to the office every day: “My management team is talented and loyal, and I return that loyalty by giving staff members the opportunity to grow.” Empire has two executive vice presidents, he says, and one of them has matured with the business since she first participated in a high school work program originated by the company. “Empire has to work for our customers, and we have to work for our employees, too,” he says.
Elements Of The Future
There’s a difference between tracking the growth of new markets, and converting that growth into successful product extensions. The conversion process involves vision, risk-taking and strategic investments not only in people, but in the technology and new business models that will eventually shape the industry.
One of the major changes in the luxury chauffeured industry has been the growth of private aviation. “Over the last 4 or 5 years, servicing the needs of private aviation customers has been a real growth market for us,” says Seelinger. “We provide chauffeured ground transportation for the largest private aviator in the world, NetJets, and our deep experience in remote FBO locations has created a real marketing and business opportunity for us.” It was the vision to invest in servicing remote airports in smaller markets that gave Empire the advantage.
Empire is living green. “We believe that the green initiative is for real. We see green as a component of many RFPs. We have made a corporate commitment to reduce our carbon footprint by 10 percent over a 5 year period, and we hire a third party energy auditing firm every year to measure our progress,” says Seelinger. “We’re committed to green because it’s the right thing to do.”
“Of course we buy energy efficient luxury vehicles,” continues Seelinger. But he also indicates that it is a challenge to find the perfect green vehicle that meets the comfort needs, trunk capacity and energy savings sought by the firm and its customers. “We just invested in 50 Mercedes R-Class BlueTEC Crossovers for the New York market, and we continue to search for the ideal vehicle.”
Building an environmentally-sound fleet extends beyond the purchase floor. EmpireCLS fills its cars tires with hydrogen. That maintains pressure and increases mileage efficiency while reducing wear and tear, he explains.
“But our green initiatives extend beyond the fleet,” he continues. “Our offices and service facilities use state-of-the-art, energy efficient lighting. I’m proud to say that our head IT person spends a lot of time in Seattle with Microsoft partnering on initiatives that will impact the future of our industry. And we’ve been recognized by Microsoft for developing and using hardware that significantly reduces energy consumption.”
There was once a time when providing luxury vehicles with wireless communication capabilities was a competitive advantage. But now, most passengers carry their own wireless devices although Empire’s fleet still maintains its own capability.
At the same time, Seelinger’s IT team is busy developing mobile apps that will enhance the user experience. First on the list is a mobile app that will be a mini-version of the new EmpireCLS website. “It will be iPhone®, Blackberry® and Droid® compatible and deliver the mobile functionality of pretty much everything on our web site,” he says, adding “We will be making other apps available in the future.”
The future of the industry — as well as EmpireCLS’s — will be built on web-based platforms with multiple integrated channel partners, says Seelinger. “We’re convinced that these capabilities will remove some of the complexity and a lot of the cost out of everyday transactions. Further enhancements will benefit passengers and the companies for whom they travel.”
The Safety Factor
Seelinger is an advocate for chauffeured limousine industry safety. He points out that although many municipalities, states and the federal government have regulations governing commercial bus, van and stretch limo operations, the sedan travel business is largely unregulated. “We’re still in a cottage industry,” he observes, “and the range of safety performance by the competitors in that industry runs the gamut from poor to excellent and everything in-between.”
Safety is a competitive advantage worth the investment, according to Empire’s CEO. “Sourcing the right drivers, training them, equipping them with the finest and best-maintained vehicles in the business helps us make passenger safety our most important priority. The fixed cost of running and maintaining a safe fleet of new vehicles is a small price to pay for the peace of mind our passengers experience in an Empire vehicle driven by an Empire chauffeur.”
And it’s an advantage that Seelinger is certain can sell itself. So he urges corporate travel managers to make a site visit as part of their decision making process in choosing a chauffeured transportation company. “Let’s face it, a C-level executive can spend as much time in a car riding from Manhattan to the airport in Newark as he or she does on the flight to Chicago. That passenger has to be given every possible advantage in getting safely to the airport. The best way a corporate travel manager can judge that commitment to safety and efficiency is to visit the provider and witness that commitment.”
Still, Seelinger admits, the EmpireCLS world isn’t a perfect one. “Sometimes as hard as we try to do the right thing, things still go wrong.”
But in the right hands, even a failure presents the opportunity to deliver superior service: “We’ve built the business on a philosophy of honesty,” says Seelinger. “When something does go wrong, we tell the customer exactly what is going on. The customer doesn’t like it, nor do we. But we tell the customer what we’re doing to fix it, and then we fix it.
“People appreciate that.”