To Rev Up Corp. Biz, Ground Cos. Turn To Tech Tools

The muddy economic road may have Dav El, Empire, Carey and BostonCoach driving more cautiously, but these ground transportation companies are not slamming their brakes on expanding or embarking on automated systems. Even amid corporate concerns—on both the supplier and buyer sides—the major competitors are equipping themselves with the latest and greatest solutions to broaden their distribution reach, in anticipation of nabbing a bigger piece of the market when the economy turns around.

"It's a confusing time for us," said Scott Solombrino, president of Chelsea, Mass.-based Dav El. "We're in much closer contact with our clients, looking at how we can better serve them, and we haven't slowed our expansion yet, but, depending on what happens with the economy, it could put a bit of a delay in our expansion process."

In addition to Corporate America's increasing withdrawal from travel, ground transportation also is getting hit by dramatically rising insurance costs and signs that fuel costs could continue to rise. "This is the perfect storm and it could be problematic for this industry," Solombrino said. After a history of 24 percent to 26 percent annual growth since 1980, Solombrino added, Dav El could be seeing negative growth in some markets.

Norwood, N.J.-based Empire International's corporate business also has been off this year, by about 10 percent, said president David Seelinger. To offset the blow to its bottom line from the rise in insurance rates—thanks to a reduction in the number of companies carrying livery insurance and higher deductibles—Empire has been concentrating on penetrating the entertainment market, with help from its new bicoastal status following a move into Los Angeles announced last month. Additionally, Empire in July opened new satellite offices in Atlanta, and plans to announce more new locations by year-end. The company also just completed installation of Drive Cam in all its vehicles, a measure officials said will enhance corporate liability. The on-board video system instantly records any noticeable g-force movement that affects the car, such as a rear-end collision.

Washington, D.C.-based Carey International also is not idly sitting back. "When you get into a down market, there is definitely a trend to consolidate suppliers," said Carey CEO Vince Wolfington. "Major companies want to be able to negotiate a good price while having the guarantee of a certain standard of service, so we've done acquisitions to have service capacity in all the key U.S. markets." Wolfington sees ground transportation as a sector of travel able to transcend the slowdown—to an extent.

"We track all of this very carefully," he said. "We think the economy will be ho-hum for the next six months, but business travel will pick up later in the fall. A lot of companies have cut back and written off their earnings, but are looking at 2002 as their comeback year. That won't happen if they don't get on the road and start selling."

While Dav El traditionally has been protected from economic whims by positioning itself at the high end of the ground market, "the rules have changed," Solombrino said. Dav El continues to work with companies on their intranets, and Solombrino said the slowdown has made it a good time to focus on systems work. "I certainly don't think it's an easy time," he said. "I think it's going to get worse and that people should be worried. But we just want to keep moving ahead."

In moves designed to prepare for fairer economic weather, Galileo International this fall will include three more ground transportation participants in its Apollo global distribution system. Empire and BostonCoach in November will launch their direct booking products on the GDS, while Dav El will add its One Road product to both Apollo and Worldspan before the end of the month.

The One Road product, which currently links Sabre to Dav El's back office with no time differential, has doubled in usage since its introduction last year, said Solombrino. He estimated that ultimate usage might reach 40 percent, considering the company's high-end client base traditionally relies upon telephone or fax bookings.

Worldspan in late July unveiled its Web-based ground transportation solution. Lebanon, N.J.-based reservation systems provider NovaTran was the first participant, with its WorldRide Limousine Service offered via Worldspan's Go! booking platform. All bookings engage Worldspan on the Web technology to integrate reservations and segment details.

The commissionable service provides access to a worldwide geographic search, real-time availability, instant confirmations and integrated passenger itineraries. The WorldRide Limousine Service covers about 400 cities in the United States and Europe, and is increasing coverage in Asia, said Art Schwab, vice president of sales and marketing for NovaTran.

"The market is unregulated and very fragmented," Schwab said. "In this industry, suppliers have access to a market that is close to them, but how do they contact travelers around the world?" Such is the challenge of an industry that is relatively young in its attempt to extend its regional centerpoints. NovaTran in June also was added to Galileo's e-Agent travel portal.

Genisys, meanwhile, in partnership with Sabre, last month saw the rollout of Sabre's commission-based ground transportation booking script. The product now is available to all agencies connected to Sabre at no additional cost. Prior to the rollout, Genisys had offered an automated system outside of the GDS that allowed clients to book with their preferred ground transportation suppliers. The new booking script now allows agents to reach limo companies of their choice.

"We need some of the efficiencies that automation brings," said Genisys president Mark Kenny. Kenny echoed Schwab's sense of a young, fragmented industry. "There is no Blockbuster Video of the ground transportation industry yet, but there will be," he said. "Somebody is going to come along and say, 'This industry is ripe.' We're delivering customer service and making the process better."

Moving ground transportation further into the future—which industry observers believe will be a wireless one— Everett, Mass.-based BostonCoach last month announced a new real-time wireless service through which customers can make, cancel or modify reservations, obtain confirmations and request car status information, including arrival notices. Travelers can access the service, termed "Go Coach," via Web-enabled phones or personal digital assistants.

The system by Sept. 1 will roll out in BostonCoach's six U.S. locations, including Boston, Chicago, Minneapolis, Newark, New York and Philadelphia. "We're probably out ahead of customer demand, but we wanted to be ahead by two or three years," said Russ Cooke, president of BostonCoach. Both Dav El and Empire International offer online reservations. Empire also allows changes to existing reservations and has the ability to recall travelers' profiles.

BostonCoach also is adding a new feature to its Web site to appeal to corporations and event/meeting planners. By next year, the site will feature password-protected customized pages, such as reports for travel managers and the ability for managers to view rides in real time.

Carey also has been focused on automation projects, including a new $20 million reservation center that includes customer profiles in its database. The data helps Carey to customize cars, and even preferred drivers, for loyal customers, while the company consolidates its operations and reduces costs with an eye on the business-to-business future of travel. Likewise, its new Web site—launched in January—this month will be able to interface with the customer profile database. By January, customers will be able to use the site to obtain their passenger histories and bills, Wolfington said. "What we're doing," he said, "is marrying ourselves to the Web."