Limo business profits from prom season
Bethany Bunch | April 20, 2006 07:06 PM | Link
With spring comes an anticipation of summer, a contagious care-free spirit and high school proms. With prom comes thousands of dollars in increased revenue; limousine businesses owe their survival to a dramatic increase in business that only spring can bring.
Those in the limousine industry have another name for spring; prom season. Prom season starts the last week in March and ends in May. According to the National Limousine Association, during these three months limousine businesses raise their prices by an average of 30 percent.
Larry Ojeleye, owner of Affordable Limousine 952 N. 3rd, said, “We live for the prom season.”
Ojeleye said they are able to get away with raising prices by 30 percent and more because they know clients will pay for it. He attributes the desire to roll up to prom in a limousine a status symbol and an act of tradition.
Newly-wed couples also have the tradition to ride off into the sunset in the back of a limousine. But Ojeleye said they receive less and less wedding business and more and more for prom.
According to Bravo Weddings, a business who helps plan weddings in Washington, busy wedding months are June through September. In 2005, MidWest Transportation 301 Maple, made $10,800 in these four months on limousine rentals alone. During prom season, March, April and May, they made $4,020 more.
MidWest Transportation revenue peaks during prom season. Source: MidWest Transportation
Businesses like MidWest Transportation supplement the slow limousine rental months by renting party busses, town cars, taxis, medical transportation and shuttle clients to the Kansas City International Airport.
David Old, general manager for MidWest Transportation said, “During the off months between June and March, many private owners sell their limousines or find new jobs.” Other businesses or private owners who depend primarily on limousine rentals suffer through the down months.
During the wedding months, prices deflate to their normal rates and promotions are run in attempt to maintain the high revenue prom season brought. MidWest Transportation offers 10 percent off their stretch limousine services and throws in complimentary champagne for the bride and groom.
Gary Close, a minister in Coffeyville, Kansas bought a 1988 Lincoln limousine with the intent to rent it out for an extra source of income. After seven months of having a limousine parked in his driveway and zero rentals, he decided to sell it.
Coffeyville is a town of 10,000 and has little need for fancy transportation, even to the prom. The biggest and most profitable limousine businesses target the biggest cities, like Kansas City where 30 limousine businesses are listed in White Pages’ directory.
Affordable Limousine is the only locally owned business in Lawrence. MidWest Transportation has a branch in Lawrence, but its main branches are in Kansas City and Wichita. Several out-of-town businesses, mainly in Kansas City, serve Lawrence, but for a higher rate due to gas and more time spent traveling.
Old said its only competitor is Affordable Limousine but because of the demand for limousine rentals, competition is not a barrier between the business and customers. Affordable Limousine and MidWest Transportation have comparable rates that vary by less than $20 an hour.
Spring, like prom season, is now halfway over. Soon limousine businesses will slow down, temporary chauffeurs will find new work and strict budgets to make it through to the next prom season will be calculated.
But as sure as the change in seasons is next years prom.
Grove, Okla. high school seniors are wisked away to their prom in class via limousine. Source: Hannah Miller