How To Justify Rate Increases In Your Limo Rental Biz
January 9, 2008
Renting out a limo can be quite expensive since a limousine can be a pretty luxurious car and would go out well with major occasions like weddings, parties or conventions. But due to the demand of these extravagant vehicles, we can only say that prices will increase.
Justifying the rate increase of your limo rental biz is quite important since you need to point out to your customers why you’re doing it. Here are three key areas that should very well explain such an action.
Limousines are expensive
Since this are luxury vehicles we are talking about, limousines are quite expensive to acquire. May it be a Hummer or a 14-seater limo, nothing ever comes cheap. You have to make sure that the business will return your investment; this in itself justifies the increase in value of the rent.
Aside from the extravagance that limos can provide for consumers, you also need to note the comfort that you can have in one. Various limo features that can add to the overall comfort and rate of such necessities include the exquisite seats, the interior, champagne bar and so on.
The maintenance for such a high quality vehicle should also be put into consideration. Since this is an expensive car we are talking about, the parts should be expensive as well. Everything about limo doesn’t come cheap, insurances can also be quite demanding regarding their rates on the limo so the company needs to compensate on their prices as well.
The demand and supply
Since you don’t see limos quite that often running around town, this in itself adds to its price. Since these cars are quite expensive to buy and much more to maintain, having one can only be called rich. As you may notice, limo rental business isn’t really as common place as car rentals.
The law of supply and demands states then when there is a low supply yet a high demand, then the increase in price is quite normal. This describes the limo rental business. Since there isn’t much limo to go around, the price would normal increase as the demand does.
We should also consider the function of the limo to begin with. If the limo is required to travel for a long period of time or may need to undergo certain hardships to get to the destination, the company can increase their rate to compensate for possible damages or encumbrance to the vehicle.
The consumer’s needs
The need of the consumer will also reflect the law of supply and demand since they are in need of the necessity. Not everyday have special occasion, and not everyday people need a limo. The business will be forced to close if they aren’t well compensated for their services. This in itself is enough to justify the increased rate of your limo rental biz.
Justifying the reason for the increased rate in your limo rental biz should be well considered and thoroughly researched. You must give the public the right explanation why such actions are done, and you need to make sure that all information is well pointed out to justify or explain your actions.
Vanessa Arellano Doctor