Luxury Coach & Transportation

June /July 2019

Magazine for the professional limousine, charter and tour industry.

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8 LUXURY COACH & TRANSPORTATION JUNE / JULY 2019 WWW.LCTMAG.COM OPERATOR SURVEY INTRODUCTION 2019 Results Show Industry In Flux Revenues and prots look strong while the motorcoach business booms. Let's start with the bottom line good news: The nancial picture for operators stands better this year than last. REVENUES About six in 10 chauffeured/limo operators saw a revenue increase in 2018 compared to the year before, as did seven out of 10 motorcoach operators (this was the rst year we asked coach operators about revenue). In last year's Fact Book, 54% of chauffeured/limo opera- tors had seen revenues rise compared to the previous year. PROFITS The share of chauffeured limo operators who saw prots rise YOY (2018 v. 2017) is 45%, compared to 40% last year (2017 v. 2016). Actual net prot margins for chauffeured/limo opera- tors stayed rm this year at an average of 16% compared to 17% last year and 15.9% in 2017 (the median net prot margin this year is 15%). Motorcoach operators reported an average net prot margin of 15%. PRICING Two-thirds (66%) of chauffeured/limo operators held the line on rates and pricing in 2018, despite 67% reporting they lost some business in 2018 to transportation network companies (TNCs) like Uber and Lyft. Among motorcoach operators, 63% kept rates the same. The share of rate raisers among chauffeured/limo op- erators was 28%, and 31% for motorcoach operators. TRENDS Certain numbers stood out this year afrming trends we have been observing and hearing about anecdotally from operators: More Motorcoaches Chauffeured/limo operators who own or lease motor- coaches and/or provide coach and charter service grew by the largest margin so far. The survey shows 37% of companies offer motorcoach service, meaning they either run their own vehicles or provide the service via a subcon- tractor or afliate. One third of all chauffeured/limo operators own or lease at least one motorcoach, compared to 24% in 2018 and 18% in 2017. That boosts prospects for motorcoach sales, with 18% of chauffeured/limo operators planning to buy or lease at least one coach this year. Eight out of 10 mo- torcoach operators plan to buy at least one bus this year. Company Sales The industry is seeing the most consolidations, mergers, and acquisitions in at least 10 years, which is skewing —eet sizes larger in the medium and large categories. A combination of market competition, a strong economy, retirements, and TNCs are motivating more operators to buy or sell companies: • 39% of operators indicate they would like to buy or ac- quire a transportation company in the next three years. • 29% of operators indicate they would like to either sell their company or merge it with another one in the next three years. By Martin Romjue, LCT editor INDUSTRY REVENUE OUTLOOK One of the more difficult figures to arrive at is the an- nual operator revenue figure. This year, we kept it simple. Our survey shows the median annual revenue amount for a chauffeured/limo/shuttle bus operator in the U.S. is $610,700. Dunn & Bradstreet Masterfile lists 7,326 owners of such companies. When you do the math, you get an annual revenue figure of about $4.47 billion. For operators running 1-10 vehicles, which comprises about half the industry based on this year's survey respons- es, the overall annual revenue figure would be $790 million. The median gross revenue figure for small-fleet operators in 2018 was $220,000 and the average was $341,000. Supplier and vendor revenue varies depending on economic conditions. With the exception of OEMs, all of the industry vendors and suppliers are privately held com- panies, and most do not disclose annual revenue figures. Until we find a way to get the annual revenue figure of ev- ery industry vendor and supplier listed in this Fact Book, computing a total figure is a longshot or a guesstimate at best. So we left it alone. ABOUT THE FACT BOOK SURVEY LCT emailed out the online annual Fact Book survey in two waves from February to May, getting a response rate with a margin of error of +/- 5% and a 95% con•dence level. This year, we divided the survey up among four audience groups so it would be shorter for everyone. Each survey contained a round of universal basic identi•er questions and then a segment of questions just for that group.

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