Finishing Line - January 2009

Price of Gas: Does It Affect Wash Volumes?
By Robert Roman

In the past, car wash owners would monitor the change in population and new vehicle sales to gauge the overall demand for their services. A positive trend would generally be thought to be good for the industry — the literature suggests that people with newer vehicles tend to take better care of them. Today, car wash owners may also want to consider monitoring the price of gasoline.

The tipping point of gasoline is thought to be the price that would cause a significant drop in consumption. This notion is based on the belief that as consumers become convinced they face higher prices open-ended, they will change their driving behavior. Some energy analysts believe that the tipping point is $3.50 to $4.00 a gallon.

Driving less will help consumers save money, but this trend may not be good for some car wash operators because common experience shows that a positive relationship exists between wash volumes and the volume of highway traffic. Consequently, any change in consumer behavior that would lead to an overall reduction in highway travel would be thought to have an adverse effect on the demand for car wash services. There seems to be some evidence to support this.

According to a study by Auto Futures Group and Technometrica, 87 percent of consumers are planning to buy a more fuel-efficient vehicle, 80 percent are bundling errands to reduce trips, and 66 percent said they are just driving less. Bert Holland, a senior partner with Auto Futures, explains that in the past motorists held back temporarily when gas prices spiked, but this time the increases appear to be causing a marked shift in consumer behaviors.

The Department of Transportation (DOT) recently reported that highway travel in the United States declined by 20 billion miles during the January —April period, compared to the same period in 2007 — approximately a 2 percent reduction. The DOT attributes this drop to higher gas prices. This is a significant change given that the number of miles driven every year by Americans has grown five times faster than the growth in population (1977 to 2001).

Higher gas prices also appear to be driving more people to public transportation. According to William Miller, president, American Association of Public Transportation, “Surges of 10 percent to 15 percent or more over last year are occurring in many metropolitan areas in the South and West where the driving culture is strongest and bus and rail lines are more limited.” According to Tim Garling, executive director, Pinellas Suncoast Transit Authority, “Not only are we seeing more riders trying PSTA for the first time, but they’re staying with us once they take that first ride.”

According to a July 2008 story in the St. Petersburg Times, daily traffic along some major highways in Hillsborough County, FL, have plummeted more than 20 percent. While most people here believe that higher gasoline prices are thinning traffic, some county officials say road conditions began improving before the recent surge in prices. This is a claim some experts find hard to believe. “That big of a drop in traffic is possible only if there had been that much road construction making these road segments better,” said Joe Zambito, a traffic analyst with the Hillsborough Planning Commission. “And that’s not the case.”

Arguably, higher gas prices, driving less, increased transit use, and lower traffic counts are not going to have a positive influence on customer attraction rates. If so, how can car wash operators fight back? According to the models that are used to predict wash volumes, making a car wash site more visible should have a direct and positive impact on customer attraction.

An effective way to boost visibility is highway billboards and yard signs. These signs are designed to catch motorists’ attention and create an impression very quickly. The sign must be readable in a very short time because it is read while being passed at speed. As such, the sign should contain only a few words, in large print, with brilliant colors.

Another way to score with motorists is landscaping the parking lot and grounds. Adding shrubs and colorful flowers can create year-round interest in your identity and motorists will take notice. Car wash operators can also improve curb appeal by screening in unsightly views like dumpsters and the junk that accumulates in the back and sides of many car wash buildings.

Site visibility can also be enhanced with modest improvements like adding a new awning, sprucing up the pad site, and painting buildings with interesting colors to create an appealing image and distinguish the wash from its immediate surroundings.

People who ride the virtual highway also have to “see” your car wash site to know it exists. The best way to achieve this type of “visibility” is with an Internet website. A website gives customers a direct portal to your business 24/7.

Bob Roman is president of RJR Enterprises — Consulting Services (www.carwashplan.com) and vice president of Bubble Wash Buildings LLC. You can reach Bob via e-mail at rjrcarwashplan@yahoo.com.

AUTO LAUNDRY NEWS is published by EW Williams Publications Company
2125 Center Avenue, Suite 305, Fort Lee, NJ 07024-5898, USA Phone: 1-201- 592-7007 Fax: 1-201-592-7171