Limo Operation Takes Higher Roads To Growth

LOS ANGELES — A limousine service owned by a rental car company may at first sound a bit downscale in an industry accustomed to running the most luxurious vehicles in a big VIP town.

But if the agency rents out exotic luxury vehicles all over Los Angeles, and the limousine service racks up four- and five-star hotel clients, then you have a strong, resourceful competitor in the third wealthiest city in the world.

Wilshire Limousine Services (WLS), named after one of L.A.’s famous urban corridors, operates alongside MCar, and is part of the Midway Auto Group. To underscore its upscale lineage, MCar is a member of the Hankey Group, a conglomerate of businesses, including auto loans and insurance, belonging to 72-year-old Los Angeles billionaire Don Hankey. In fact, Hankey owns the entire block along lower Wilshire Boulevard where the limousine service’s building and fleet lot are located.

About The Hankey Group
The Hankey Group, headquartered in Los Angeles, began as an auto dealer in 1972. It consists of seven companies with 2,100 employees. Don Hankey founded six of the companies and purchased the seventh in 1988. Hankey Group’s total assets as of August 2015 were $5.4 billion and estimated to reach $5.6 billion by end of 2015.

Growing Results

Wilshire Limousine Services recently opened operations in New York, with 48 vehicles and a roster of upscale hotel clients. On Sept. 1, it closed a deal to buy Integrated Transportation Services (ITS) of Los Angeles, bringing its Los Angeles fleet from 64 to 96 vehicles as of late October. Wilshire revenues have more than tripled since 2010, from annual revenues of $3 million to an estimated $9.5 million in 2014, and a projected $12 million-plus by the end of 2015. Affiliate business outside of Los Angeles and New York is growing 20% annually, as Wilshire aspires to open up in other cities.

The ITS acquisition stands as Wilshire’s most significant expansion move so far. As the largest chauffeured service provider to hotels in Los Angeles County — exclusive to 16 four- and five-star properties such as the Peninsula Hotel in Beverly Hills, the Beverly Hilton, the Ritz-Carlton and the J.W. Marriott downtown — Wilshire grew to a point where it needed more vehicles and a wider reach. Enter ITS, a high-end chauffeured service with airline, corporate and entertainment industry clients founded in 1990 by operators Al and Jonna Sabroff.

“Growing organically means you’re slowing down,” says Mike Kushner, vice president/operations of WLS. “We grew to a point where we needed an acquisition to further grow our company. ITS’ volume, current clientele, staff, and experience were a great fit for us. It wasn’t something we did overnight. We went back and forth. We did our due-diligence, they did their due-diligence, and we came to an arrangement,” adds Kushner, who has worked in the Los Angeles and New York limousine industries since 1988.

As part of the deal, Jonna Sabroff, former President of ITS, became the vice president of business development for WLS. “My husband Al and I were fortunate to find such a good company to acquire ITS,” Sabroff says.
“Wilshire has hired ITS employees and was enthusiastic about serving our customers. They are a great company and we are pleased to be part of the extensive Don Hankey business family.”

FASTFACTS: Wilshire Limousine Services
Locations: Los Angeles, New York
Founded: 2007
Owners: MCar (formerly Midway Car Rental), owned by The Hankey Group
Key executives: Gary Macdonald, President of Midway Auto Group; Rick Mullinax, President of WLS and executive vice president of MCar; Mike Kushner, vice president/operations of WLS/Los Angeles; Steve Horowitz, vice president/operations New York; Jonna Sabroff, vice president of business development, WLS.
Fleet size: 96 vehicles, Los Angeles; 48, New York
Fleet vehicle models: Lincoln MKT Town Car, Cadillac XTS, Mercedes-Benz S-Class, Lincoln Navigator, Cadillac Escalade, Chevrolet Suburban, MKT stretch limousine, Ford Transit Vans, Mercedes-Benz Sprinter Vans, Grech Motors buses.
Affiliates: 500+ worldwide
Major network affiliations: Tristar Worldwide, DavEl/BostonCoach
Annual revenues: $12 million, est. 2015
Employees: Los Angeles: 125 chauffeurs, 29 staff; New York: 60 chauffeurs, 9 staff
Overall client ratio: 65% corporate/hotel; 35% entertainment (no retail)
Major client sample: Peninsula Hotel, Beverly Hills; Beverly Hilton, Ritz-Carlton Los Angeles, J.W. Marriott; entertainment studios/production companies.
Web/phone: http://ift.tt/H9vG0X; (888) 813-8420

Fleet Friends & Benefits

Wilshire Limousine can tap a network of 3,000 rental cars in Los Angeles to round out extra fleet demand when needed. The MCar fleet includes 200 large Cadillac Escalades, Chevrolet Suburbans, and Mercedes-Benz S and GL models. MCar even has Rolls-Royces, Bentleys, a Maybach, Ferraris, Porsches and Lamborghinis to spare for premium service requests, or to supplement the fleet in a pinch.

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“We have the ability, if there was some big event in town, that we can use Midway Car Rental inventory,” says Rick Mullinax, President of WLS and executive vice president of MCar. “We can rent it to our own company to fulfill orders, where a lot of companies have to come to us. They already come to Midway Car Rental to rent cars, now we can rent those vehicles out to our own company.”

MCar is one of the original businesses in the Hankey Group. Lest anyone assume its comparatively small limousine division can rest on a billionaire’s backing, “Don Hankey certainly is all for us growing, but really what that means is we have high pressure to make money, because that’s what the Hankey Group does,” says Gary Macdonald, President of Midway Auto Group, who has worked for Hankey for 40 years. “So we do have the resources to do it, but we have high expectations and we must deliver on results.”

That means financial marching orders of 30% return on equity and 20% annual profit growth as targets, Macdonald adds. “We’re in the business to make money, and grow. All of us have an interest,” Macdonald says.

“Don is excellent about offering key people investment opportunities, so we’re all going to make money if the company makes money. He is not in this business because, say, his ‘sister-in-law’ likes to have a car service. It has nothing to do with that.” Macdonald adds that “Mr. Hankey” never accepts free rides from Wilshire Limousine, opting to pay full rate like all other clients.

One advantage of being part of such a group is economies of scale in vehicle purchasing, insurance coverage, and vehicle maintenance. “For example, MCar might buy 250 Mercedes-Benzes a year. If we add five more into those orders, this piece of the business is able to capitalize on the aggressive pricing that MCar might get on high-line cars,” Mullinax says.

Being connected to a luxury rental car provider also helps Wilshire Limousine reduce its vehicle turnover rates, providing newer, late-model fleet vehicles. “At heart, we’re car guys,” Kushner says. “So we have a mature purchasing department and mentality, and a mature remarketing business. We hold all the vehicles in a risk mode. We’re not leasing them through a lease company, so we buy and sell the asset and hold the asset.”

High Rent Origins
Started in 2007, Wilshire Limousine took an unusual route to becoming a full-service chauffeured luxury operation. Midway Auto Group needed to get its clients from arrival terminals at LAX to its offsite rental location for high-end vehicles. It created a limousine service with chauffeur-greeters to take its rental clients back and forth, instead of the shuttle buses typically used by rental car agencies.

“The airport was making it very difficult for off-airport car rental companies to get their customers picked up,” recalls Mullinax, who has been with the Hankey Group for 15 years. “Once we started doing this, we just had some more requests from our clients that were like, ‘Hey, instead of us just stopping off to get the car, can you drop the car off at our hotel, and drive us to the hotel since we’re already in the limousine?’ So we started expanding it that way.”

Midway capitalized on its in-house sales team that deals with high-end travel agencies and corporate accounts out of New York. Wilshire Limousine is one of two chauffeured transportation companies in the U.S. vetted by Virtuoso, a global network of travel agencies and agents. “Although we’re a Los Angeles-based car rental company, we’ve been in business for 40 years and have a long list of clients and travel agents, so we started marketing directly to them to start building our resumes,” Mullinax says.

In 2009, Wilshire Limousine approached the renowned five-star Peninsula Hotel in Beverly Hills, which was looking for a new chauffeured service for hotel guests. “Midway Car Rental was the rental company and we’d supply cars to the hotel for the prior eight, nine years,” Mullinax says. “So we approached them and said, ‘Could we have the opportunity to bid on your account?’ We bid on it and were awarded the account. At the time, we probably weren’t ready to take on an account of that magnitude, but it forced us to grow very quickly and to really expand our company and brand.”

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Superior Service
The Peninsula Hotel account gradually propelled Wilshire Limousine into the graces of more five- and four-star hotels spread from downtown, through the Westside, to the shores of Santa Monica. Its upscale hotel work informs and upgrades its customer service goals and overall operations.

Wilshire Limousine launched a more user-friendly website in October that offers a client app for download. “Yes, technology is important,” Kushner says. “You can’t grow without it. The TNCs have definitely opened our eyes. We’re not leading the trend, but we’re becoming very technologically advanced just with operations apps, and tracking software, phone systems, and email queues.” Chauffeurs also use iPad signs for customer airport greetings.

To cope with TNC competition at hotels, Wilshire Limousine now keeps more vehicles on site and in the vicinities of hotels to handle ASAP bookings through its website. “It’s not necessarily that they’re any better, but people are expecting to be quick now,” Kushner says. “Years ago at a property, we could tell when someone was looking for a car ASAP, you’d tell them 20 minutes. They were fine with it. Now if you can’t get there in 10, the guests are calling Uber or TNCs.”

Wilshire Limousine retains its customers by doing service things TNCs can’t do, Kushner says, such as providing a specific latte for a client, or setting specific temperature settings desired by clients. Wilshire handles just about any concierge-level request or need from clients. “At the end of the day, that’s what we do for a living. We provide a service and TNCs provide a car. We just happen to be providing cars as part of our service.”

Kushner alludes to more growth ahead, likely into other cities, but in a way that’s measured and extends the five-star hotel-level quality. “We’re committed to building a great company,” he says. “We could probably be double the size we are right now if we really wanted to be, but that’s not where we are. We want to make sure we’re making money and we want our brand to be strong. Most importantly, we want to make sure we’re offering really good service, because we’re here for the long run.”

5-Star Hotel Defines Customer Service

BEVERLY HILLS, Calif. — The Peninsula Hotel here stands as the flagship chauffeured account for Wilshire Limousine Services. As the only AAA Five Diamond and Forbes Five Star-rated hotel in Southern California every year since 1993, The Peninsula Beverly Hills offers 195 guest rooms, including 38 suites and 17 private villas, according to its website.

Wilshire Limousine’s gentleman-in-charge of onsite operations is Ryan Kerzner, 35, also the company’s director of business development who supervises onsite chauffeured service and rental car reservations for guests. Kerzner, who has worked at MCar (a Midway Auto Group company) for more than eight years, ensures that chauffeured service matches the elite concierge-level expectations and standards of The Peninsula. Hotel training principles inform the practices of Wilshire Limousine, which closely monitors all guest runs and fleet movements.

“I’ve spent more time recently working with our chauffeur manager and our general manager about finding ways to improve operations and service throughout the company based on solutions I’ve found with our onsite operation,” Kerzner says. “The Peninsula account and their guests’ expectations are high, and these improvements on what the client expects is what we strive for: five-star service.”

In September and October 2015, for example, Wilshire Limousine had a combined 99.33% service success rate on hotel-related rides. “It’s the service level that sets everybody apart, not just with our chauffeurs, but our clientele,” adds Wilshire’s vp/operations Mike Kushner.

Keywords

California operators   client markets   hotels   Jonna Sabroff   Los Angeles operators   luxury hotels   Mike Kushner   rental cars   Rick Mullinax   Ryan Kerzner   VIP service   wealthy clients   Wilshire Limousine Services   working with hotels   

 

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