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Demand drives Chauffeured Co. revenue.

Article Excerpt
As fuel prices forced chauffeured transportation providers to increase surcharges in 2005, the major players sought new avenues of growth--both geographically mid in marketshare. Revenues rose across the board, which industry leaders attributed to strong demand and an overall consolidation of suppliers. The four leading providers used the increase in revenues to reinvest in technology and look for profitable acquisitions.

Carey International Inc., based in Washington, D.C., continued its transition from a licensee and affiliate system to a franchise system in 2005, said CEO Devin Murphy.

Last year was "a record year" for Carey, Murphy said, due partly to contracts with the Federal Emergency Management Agency for evacuation services in the Gulf Coast after Hurricane Katrina. Organic growth also was strong in 2005, he said.

Despite rising costs, which pushed Chelsea, Mass.-based Dav El Chauffeured Transportation Network to increase rates, the company enjoyed double-digit growth in 2005, said president Scott Solombrino.

"Numbers are starting to exceed pre-9/11 numbers for the first time," Solombrino said, adding that smaller suppliers are pushed out of the market as costs rise, leaving room for larger companies to capture more volume.

"The strongest ones will get through this and the weaker ones won't," he said.

The market is so dynamic that acquisitions are secondary to the goal of organic growth, he said, adding that Dav El can grow its marketshare without investing in acquisitions.

Solombrino said he's been surprised by the growth in the market because fuel, fleet supply and other costs have spawned a "perfect storm" of problems.

Everett, Mass.-based BostonCoach Corp. in 2005 acquired destination management company Best of Boston, signifying the opportunity in corporate group business, said CEO Jonathan Danforth.

"We're diversifying BostonCoach into providing more single-source services when it comes to corporations and that's why we bought Best of Boston. We're looking at a deliverable now that brings us into the event and meeting business," he said. "We are definitely shifting resources into providing transportation services and other services in the group market."

BostonCoach also works through DMC affiliate group Global Event Partners to target events in other cities.

"When we bought Best of Boston, we bought the ability to be able to network with these DMCs," he said. "We're building a tight bond with DMCs domestically as well as internationally."

Norwood, N.J.-based Empire International acquired in early 2005 the largely leisure-focused Los Angeles-based CLS Worldwide Services and spent most of the past year merging the two brands trader parent company GTS Holdings Inc. The combined company is now known as Empire/CLS and the merger more than doubled Empire's revenues, while reducing its percentage of corporate client volume from 90 percent of its business to 65 percent.

Bob Lockett, vice president of sales and marketing, said organic growth also was strong in 2005. Overall, the company and affiliate network reached 13 percent organic growth in 2005, he said. Business at East Coast corporate-owned locations grew by 5.7 percent year over year, while West Coast operations, comprised mostly of CLS, grew by a whopping 76 percent year over year, he said, due largely to a new sales team.

"You also have to remember, from a percentage standpoint, that 76 percent growth was based on CLS numbers and the 5.71 percent growth was based on a much bigger base," Lockett said.

FUEL

The volatile oil market and its...

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