The decision to offer transportation services for guests is a complex one, with hoteliers needing to consider a variety of factors such as whether operations should be outsourced or in-house, financial aspects of ownership and operations, resource allocation and more.
Larry Trabulsi, managing director and executive VP of hotel asset management at owner advisory services company CHMWarnick, said there are a few key factors hoteliers should consider.
First, he said hoteliers need to address whether there’s a disadvantage to providing such services or if there’s opportunity to create a competitive advantage. “On the disadvantage, we have a hotel where new demand generators (sports arena) have come into the market, with other hotels closer to the arena," Trabulsi said. "We are contemplating a shuttle to and from the arena to hopefully address the issue. A competitive opportunity could be that with the return of special corporate, a hotel may evaluate reinstating a pre-pandemic shuttle program for nearby local offices.”
Second, Trabulsi said hoteliers need to weigh the financial aspects. Is there an opportunity to make money or at least offset some of the costs of a program? “An example could include airport transfers,” he said. “Or should you consider outsourcing to reduce expenses? Is there an opportunity to complex with sister hotels, particularly for airport hotels?”
Finally, hoteliers need to ask whether transportation is an essential guest amenity for the hotel. “For extended-stay hotels, where long-stay guests may not have rental cars, having transportation to and from a shopping mall or local shopping complex may help keep and attract business for the hotel,” Trabulsi said.
Outsourcing Options
Once a hotel decides to offer the service, they often partner with a third party, Trabulsi said.
However, outsourcing transportation services also means managing expectations with the third party, especially when maintaining brand standards.
“It is important hotels ensure those they are outsourcing to are capable and willing to adhere to their needs and criteria,” said Bayan Sabermanesh, executive assistant manager and director of operations – rooms at The Ritz-Carlton, Sarasota (Fla.). “Sharing clear brand expectations and providing close guidance and continued training is always helpful when beginning a partnership and throughout its course. Maintaining a close working relationship through weekly meetings and check-ins also helps minimize errors and strengthens the working relationship.”
Outsourcing transportation operations also means hoteliers can share some of the risk-management responsibilities. “Regardless of the set-up, risk management is a key factor in the decision, as there will likely need to be increased general liability coverage and added automotive/off-premises coverage," Trabulsi said. "With a third party, these risks may be shared based on terms of the agreement."
Keeping It In-House
However, there may be opportunities for hotels to offer transportation services while keeping those operations in-house.
“Factors here are typically dependent on level of service,” Trabulsi said. “If the plan is to have a shuttle van go back and forth to an airport every 30 minutes, that requires dedicated people resources. By comparison, if the plan is to have a shuttle to a local mall on an ad hoc or by-request basis, then maybe that can be done in-house, but with qualified resources.”
But providing in-house services leads to other considerations and resources. That’s why a main reason many hotels choose to outsource operations comes down to maintenance.
“Handling vehicle maintenance puts extra work and strain on the hotel staff who usually aren’t specialized in the business,” Sabermanesh said. “This is often the primary reason hotels switch to a professional transportation company that can handle all aspects of its business, including vehicle safety and maintenance, as well as anything else that may come up.”
For those hoteliers who want to keep the services in-house, Trabulsi said age of equipment is usually the starting point when it comes to a maintenance plan. “Newer equipment should be more reliable. Having a planned maintenance program is key as these vehicles face ‘hard miles’ and require ample upkeep,” he said. “Owning equipment versus leasing should also be evaluated—and lease buyout option at the end.
Parking Plans
Parking is another factor to consider, and this typically starts with the hotel’s location.
“For urban hotels, parking is a key factor and money-maker. If you’re adding vehicles, you need to think about where the vehicles will be parked during the day and overnight,” Trabulsi said. “There could be a cost for the spot or you could displace revenue by taking up an existing spot.”
Managing expectations here is key, too, Sabermanesh said. “The first step should always be to set up proper expectations by setting a schedule for the shuttle and enforcing clear and constant communication with [the] guest services and valet teams to ensure a seamless integration into the hotel’s workflow,” he said.
Sabermanesh said that hotel teams also need to work closely with chauffeurs to build important relationships in general—“but also when managing special events and busy days with heavy arrival and departures,” he added. “It helps to have a designated area for the shuttle to pick up and drop off guests, and make the provider aware of noise, smell and cleanliness expectations.