LAS VEGAS, Nev. — In an industry disrupted by technology and TNCs, the true hope for success lies in closer client connections made possible by constantly improving service, applying new technologies, and making the most of social media and websites, two State of the Industry speakers told attendees Feb. 29.
The first speaker, LCT Publisher and Show Chair Sara Eastwood-Richardson, noted all the changes in the last decade, except one. “We’ve been in a paradigm shift ever since resurging from the Great Recession,” Sara said.
“Our service models have changed. Our client books have changed. Our operating systems have changed. Our fleet vehicles have changed. Our competitive landscape has changed. As I step back and look at what we were all about 10 years ago, I ask, ‘What hasn’t changed?’ I’ll tell you: I’m looking around the room and I’m seeing you are still here, and new operators keeping coming. That has not changed.”
Sara’s presentation outlined a slew of hopeful statistics, as well as a few highlights here:
- The industry’s primary source of revenue is the business travel sector, with 80% of the business travel spend consisting of airport runs. More airline passengers are expected over the next two decades. The International Air Transport Association released a 20-year passenger growth forecast which predicts a 4% average annual growth in air travel demand. By 2034, total passengers are expected to reach 7.3 billion.
- Looking at global trends, the Global Business Travel Association’s annual forecast predicts global business travel spending will hit a record $1.25 trillion in 2015. While final numbers are still being calculated, that represents 6.5% growth compared to 2014. Growth will remain strong through 2019, with business travel projected to grow 6.9% in 2016, 6% in 2017, 6.4% in 2018, and 5.8% in 2019.
Operator Troubles
Sara also summed up other trends and important industry concerns:
- The spread of apps and proprietary apps for use by affiliates is causing confusion among operators on what to use.
- Insurance costs are rising, but more importantly, the non-renewal rate has soared with many operators finding their carriers no longer insuring party buses. Major players such as Zurich have paid out so many catastrophic claims from party bus injuries they have grown shy of the risk.
- Thanks to the onslaught of Uber driver disasters, passenger security is now top of mind. If you have not invested in a driver background check program at your company, you should make that a priority now.
- Many operators are transitioning from sedans in favor of SUVs that can function as either and have extra cargo space and seating.
- Vans such as Sprinters continue to eclipse the stretch as the way for groups of eight to 10 to travel in luxury.
- Videos have increased in popularity in websites and social media. Those not using video will be left behind.
Topic A
No State of the Industry would be complete unless addressing the No. 1 issue of the last several years. As Sara put it, “As for Uber? As the Arabian Proverb states, ‘Arrogance diminishes wisdom.’ Arrogance is a formula for leadership failure. The history books are filled with fallen companies run amok by arrogant leadership. While Travis Kalanik is eying a future using autonomous vehicles, he still has to survive the road to getting there. That road is filled with speed bumps.”
Sara cited the challenges of Uber’s background checks for drivers being under serious scrutiny; the growing number of people who don’t feel safe using Uber; expanded laws and law enforcement stopping or slowing Uber; Uber’s crazy methods of playing with you, such as adding $1 to the fare to ensure Uber places you with a “safe” driver; and lawsuits.
“Not only is there a pending class action against Uber for their ‘independent’ status, but Uber is being sued everywhere by victims of driver crimes, for misleading clients about its safety procedures, for failing to submit mileage tracking technology for review, and for drop-offs and pick-ups at airports without airport approval.”
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Show-Stopping Confession
The topic of Uber resulted in a stunning confession from the second State of the Industry speaker, Bill Faeth, a serial entrepreneur and former Tennessee limo operator who now heads Limo University and Inbound Marketing Agents.
Faeth, who led 23 start-ups in his career, with most failing and fueling future successes, has 300 clients in the industry. “I believe in being who I am and in being real. I’m an Uber customer. I’ve used Uber in Las Vegas, Los Angeles, New York, Boston, and Nashville. I spent over $20,000 with them last year.”
As Faeth later put into context, he and his Millennial generation employees use Uber for research in distinguishing the strengths and weaknesses of TNCs versus chauffeured transportation. Out of that comparison, Faeth exhorted operators to do all the things Uber and TNCs cannot: “What Uber doesn’t have with me is a personal connection. The chauffeur doesn’t talk to me. He doesn’t open the door and doesn’t put my luggage in the trunk. He won’t discuss current events with me or even tell me about the city of Las Vegas. I’ve never spoken to Travis Kalanick (CEO) and don’t know my Uber community manager in my hometown of Nashville.”
What’s essential for operators is to adopt the Uber technology and use it in a more responsive, refined way that brings out the best in the high-touch, high-end customer service that chauffeured operations are known for, Faeth said. Limo operators should be implementing new software, or the latest iterations thereof; deploy a client app; put up a mobile responsive website with five landing pages to rank high in Google’s Search Engine Optimization (SEO) searches; shoot and post promotional videos; interact with customers by using website Live Chat; and learn how to use social media to connect with clients.
“If you don’t have an app, you are operating your business like it’s 2006,” Faeth said. “If you’re not mobile responsive on your website, you’re running your business like it’s 2006. You have to market and run your business like it’s 2016, not 2006.”
Faeth cited statistics showing 55% of executives so far are consuming video every day; 79% will do so this year; and 67% will share a work-related video every day. “Video is the top consumed content on the Internet, four times more than email and Internet combined.”
Learning, adapting and connecting are critical to keeping customers and finding new ones. Many of those customers are Millennials, now up to age 35, who have money to spend and are planning travel. They want service that is fast, simple and easy. “You may think they are your customer of the future, they are not. They are your customers of today.”
Faeth closed with this summary: “People prefer connecting with people. They don’t want to buy from a brand. They want to buy from people. Video is most important to communication. It’s the next best thing to face to face. If you use video, put it in your About Us page of your website. You don’t have to be awesome at shooting it, but leverage it moving forward. Think about your customers. Make it simple. Make it fast. Make it more like Amazon.”
Keywords
business travel business trends ILCT 2016 industry trends Sara Eastwood-Richardson state of industry TNCs Uber
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