On Target 16 – Charge for the peaks
Private hire is flexible, and the traveling public’s perception is that certain times will cost more. However, I often find that my competitors charge much the same, without thinking about the time of year or a date. This is an opportunity missed.
My view is, I will charge more where demand is likely greatest. That may be a regular occasion, such as Royal Ascot, Wimbledon, British Grand Prix and other such big events. Coach availability is likely to be at a premium at these times, therefore so should the price. Sometimes events come up that are not expected but mean a large regional demand for coaches. The 2012 Olympics was one example. A once in a lifetime opportunity and judging by the competitor accounts, I see, 2012 saw a considerable increase in turnover and in most cases profits. However, there are other events that come up from time to time.
I recall when the FA Cup was a huge UK event; the shops were deserted in the afternoon, as everyone was glued to their TV at 3pm for the final. Not so much now, as there are so many distractions. The semi-finals in those days, were held at neutral grounds, rather than Wembley. One year, Tottenham were playing Arsenal at Old Trafford. The demand for coaches to get over 70,000 people to Manchester was concentrated around north London, with the club’s resident operators’ requests to hire in getting increasingly desperate.
The supporters were paying £80-plus for a ticket, so £15 each or £25 was immaterial to them
Why? Because they were offering a price which in my view, only just covered the cost and they suggested a second driver was not required. Given the distance to Manchester from north London and the inevitable congestion caused by so many coaches trying to go to the same place, I knew it could not be done legally in the time required. Ok, I could have put a relief driver in, which might have saved a bit, but that is not always straightforward.
I ended up providing two coaches and four drivers at an uplift of near 50% above the rate offered. I suspect that was a loss to the operator concerned. While I will always help a fellow operator, I won’t do it at a loss or illegally. They had tied themselves into a contract for which they had no ‘get out’ in the event they needed to hire in. Maybe they thought their teams would not be that successful…
Additional services are an opportunity that should set the cash register ringing
The moral of this story is that people expect to pay more on these occasions. Given the supporters were paying £80-plus for their admission ticket, whether the price for a seat on the coach was £15 each or £25 was immaterial to them. They would have paid it.
Interestingly, a friend in British Airways told me of a private charter for the same match involving a 747 ‘jumbo’ jet. They charged 50% more for the privilege, even though the plane was going to Manchester anyway, following maintenance at Heathrow. Likewise, they brought another plane back for the return charter. They needed to tweak maintenance times, but it certainly worked for them. Is the coach industry naïve, and maybe too charitable in supporting those poor football clubs who can only afford to pay their playing staff £150,000 a week? I think so.
Additional services are an opportunity that should set the cash register ringing. Any services I provide on top of the coach, whether that be refreshments, admissions, ferries, tunnels and anything else I can offer, are marked up by at least 10%. I can usually get a better deal than the client and it saves them the hassle. I can also ensure that everything works smoothly by being in total control. Clients like a one stop shop, so everyone wins.