Limousine rentals recovering after dismal stretch

Chauffeur driven luxury car rentals, a niche service in the auto rental industry, are starting to recover after a disastrous drop in the wake of Sept. 11, industry officials told the WBJ. With the weak economy and the decline in tourism following the terrorist attacks hampering the entire sector company, officials specializing in luxury rentals say their businesses have been hit particularly hard. "There was a big crisis, specifically as a result of Sept. 11, as there have been fewer and fewer VIPs coming to Poland," said Andrzej Zagumny, the owner of VIP Services, a car rental firm specializing in luxury car rentals for dignitaries, chief executives and foreign delegation tours. Grażyna Dobrzyńska, the owner of Carex Limousine and Van Services, agreed. "There are far fewer business and tourists now, and we feel it," she said. "But we are now definitely noticing a comeback in business. But then again, our best months are traditionally April, May, September and October." Renting luxury cars, however, has also been a lifeline for smaller operators, many of which have been unable to compete with larger firms in regular car rentals. Marcin Jarena, the reservations manager of Warsaw-based Local Rent a Car Poland, said that because of the risk of theft, only a few firms in the country rent luxury cars. But those that do, including Local Rent a Car Poland, find the service good for business. "Having luxury cars does help, as it shows that we are prepared to rent them out," he said. "And because we have all sorts of cars, we can cater to all sorts of customers, which helps us immensely as we don't lose out on any business. The luxury cars we have are always very popular, and we have already got full reservations for them until the end of August."

Targeting the rich Foreign businesses and embassies are the main target market for luxury car rentals, company officials said. But according to some, cost-cutting measures have eaten away at this market as well. "Obviously, government and delegation contracts depend on the embassy and country," said VIP Services' Zagumny. "They are all individual cases, but the tragedy of the business now is that embassies hire out firms that don't really specialize in luxury car rentals. They simply rent local taxis so the service doesn't offer the same quality. "The embassies are not going for quality but for price. Even for delegations they are looking to cut costs, but the work is not just about the car and the driver, it's about the whole logistical aspect of it, (such as) planning out the routes. Offering drivers and cars is only one aspect of the business." But the majority of company officials said that the core of their business is based on contracts with foreign businessmen, with a slight hike in demand from domestic clients. "Embassy rentals are always a one-off situation, so it's difficult to gauge if there has been a decline in business from that side of things," Local Rent a Car's Jarena said. "Although embassies take our service, our main business comes from foreign-based firms." Zagumny was pessimistic about the prospects for increased business from domestic clients. "Our main customers are still international firms as the culture and need for such things among Poles has not developed yet," he said. "Poles still have to learn about this as many simply don't distinguish between a dirty taxi and a clean limousine. And also people don't realize that hiring a limo for the day can sometimes come to about the same as hiring a 'luxury' taxi for a day."