The limousine and stage coach business is hurting right now.
Not only are social distancing protocols hampering travel, but the past few months have been particularly rough for Valley View’s Big Hat Limousines & Transportation.
Owner Bryan Newton said the recent downturn due to the coronavirus pandemic has been paralyzing.
“Financially, it’s pretty much destroyed us,” Newton said. “Without the help of the PPP (Paycheck Protection Program) program and the EIDL (Economic Injury Disaster Loan) program, we wouldn’t be here. There are numerous things that we always wanted to change about our business and without those loans, there is no way I could afford to keep people here to make those changes while there is nothing going on.”
The tweaks Big Hat has made have been to help customize the online experience, according to Newton, who said streamlining the business has come out of necessity.
“It’s frustrating, but at the same time, there’s a positive in every negative,” Newton said. “We’ve been able to sit back and learn from others in the industry as far as marketing goes and the ability for new or old customers to book online. We’re user friendly now. We’ve really beefed up issues we had small or big.”
Big Hat general manager Jordan Harris said he thinks now is a good time to market and he is hoping that will pay off when the economy gets going again.
“We feel like right now, ad space is not as expensive and we’re trying to take advantage of that,” Harris said. “We’re trying to take every job that we can get. We’re trying to reduce our overhead. We’ve been fortunate with all of our lenders to receive deferred payments on all of our buses and equipment and insurances have helped us reduce our premium.”
Newton and Big Hat have been in business since 2013, but the thought of closing their doors is difficult to swallow.
“Right now, it’s just hold your head up,” Newton said. “I don’t have an answer right now. It’s not up to us to recover. If the phones don’t ring, we’re not making money. Our PPP is going to run out soon and after that honestly, if things don’t pick up, I’ll have to go get another job.”
One of the main avenues Big Hat receives customers is through a broker and Newton said it’s tough to rely on them for business.
“At this point, we get a lot of stuff out of state, but it’s generally through a broker and they take about 26% of what the job would pay us,” Newton said. “We’re running pretty lean there and if something happens like a bus breaks down, you haven’t made anything. Brokers have really hurt this business.”
Big Hat caters to weddings, nights on the town and birthday parties with 56 passenger motor coaches along with its limos.
It also has a large stake in the return of sports as it provides transportation for several entities across the state.
“A lot of area high schools use us for sports travel, mainly through high school football season,” Harris said.
“That’s our biggest job. We also have a contract with Austin College and we do 100 trips with them alone. We also help out TWU, UNT and NCTC,” he added, referring to Texas Woman’s University, University of North Texas and North Central Texas College. “Most people around North Texas have our number and we’re on their radar.”
If sports don’t return, Harris said Big Hat will be in big trouble.
“We’re 80% leveraged into education institutions,” Harris said. “If you don’t have high school football in September, we’re having a whole different conversation. Without fall sports, you’re looking at possibly shutting the doors. We talked to the NCAA and they’re going to take a different approach, but you can’t social distance travel. They are very optimistic as well.”
Harris felt passionate about what he saw as the disservice the motor coach industry has been done by the government and is encouraging people to support Big Hat and the industry at a rally in Austin on Wednesday, June 3.
“The airline industry got a bailout,” Harris said. “They always do. The motor coach industry always gets left out. Who gets the people to and from the airport or to the cruise line. The airlines do 700 million passengers a year and we do 600 million. We rarely get a seat at the table and we don’t get any industry-specific funding. People have to know how important the motor coach industry is.”
Harris said it’s ironic the industry isn’t able to capitalize with the dip in fuel costs.
“The limousine side will keep us going while the school portion picks up,” Harris said. “Bryan has done a great job keeping both sides going. When one slides down, the other is on the uptick and vice versa.”
Big Hat had to lay off 75% to 80% of its 20-person workforce and while Newton said it was difficult to lay off drivers, it was an opportunity to retrain new drivers.
“Drivers are an issue,” Newton said. “They were an issue before this. It’s tough to find people that actually want to work and listen to the rules that you want to go by. Some of these guys I’ve had to let go, I’m not sad about it at all. I feel like we’re only going to grow by the quality of drivers we have. If we had the work and you lost them, it’s tough, but if you don’t need them, you don’t need them.”
Big Hat was on track to gross $1.8 million with a profit of $500,000 but is now set to gross just over a million dollars and lose about $500,000. The lack of prom business has also cost it $20,000, according to Newton.
“We keep plugging away like we’re doing now,” Harris said. “We’ve got a lot of internal processes we’re trying to make better and we’re looking toward September. We’re purchasing a new limousine next week to try to capture the leisure and retail aspect of the business.”