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| Frustration leads to thriving RV rental business |
| Las Vegas Sun, June 1987 |
| Excerpts from an article by Kingsley Wood They had intended to use the motor home for “pleasure” when she bought it. However, they found they didn’t have much time for sightseeing. They were too busy running a struggling stock brokerage firm based in Century City, Calif. Sandra and J. William Bate did the next best they she could think of with their new investment. They converted it into a mobile office and proceeded to visit clients all over the Los Angeles metropolitan area. Imagine driving a big vehicle like that in Los Angeles traffic, day after day, Sandra Bate said. “It’s a hectic city to drive in.” “When Bill and I discovered the mobile office idea just wasn’t going to pan out, I parked the vehicle in the driveway.” It stood there day after day, a reminder of vacation dreams unfilled. One day Sandra told her husband: “We’re making monthly payments on a vehicle that’s giving us nothing, in return. What do you say to the idea of placing an ad in the Los Angeles Times?” We’ll say we’re renting our motor home to anyone who wants to use it.” “Do it,” J. William Bate told his wife. “We started getting over 30 calls a day in response to the ad,” she remembered. “At one point, we had the motor home booked out for the entire summer. I started calling neighbors who agreed to let us rent their motor homes. During a six-week period, we rented out 45 of them.” In that manner, a new business was born. They agreed that the business was her idea, and it would be her baby. She would be the owner and chief operating officer. Today, Sandra devotes fulltime to an enterprise that has since moved to Las Vegas and is known throughout the world. The company deals with some 3,000 individual motor home owners and suppliers in the United States and 18 foreign countries and more than 22,000 travel agencies in 125 countries, including in the Unites States. Sandra Bate explained, first, how the system works in the case of the individual motor home owner. That person will be known as Joe, for story purposes. To do business with the Bates firm, Joe must sign a contract designating the periods when Bates can rent his motor home out to other families who may want to use it. Let’s assume that Joe signs that contract. He has an option of doing one of two things with the vehicle if he wishes to use some of that rental income to relieve the monthly payment burden, Sandra Bate said. First, he can opt to drive the motor home to the Bastes offices and show the renting family how to operate and maintain the vehicle. In that case, he keeps 60 percent of the rent income. Bates gets the rest. Perhaps Joe doesn’t want to go to that trouble; however, he tells Bates, in effect: “I’m taking the second option. Keep my motor home during the period indicated. I want you people to do all of the explaining.” In that case, he is entitled to only 50 percent of the rent money, Sandra Bate said. She said the system works to everybody’s benefit when travel agents and suppliers enter the picture. Usually the suppliers sell, service or rent out motor homes, some of which they may own themselves. They are frequently described in the industry as affiliate companies when they rent their motor homes to Bates’ clients or to those who deal with Bates through travel agencies. The supplier pays Bates for the privilege of becoming an affiliate and getting a piece of the rent pie in return. Sandra Bate summarized a typical scenario to illustrate the benefits to the various parties: “A New York travel agent calls us. He says his client plans to fly from New York to Dallas. The client wishes to rent a motor home in Dallas and travel 3,000 miles around the country. The client plans to leave the vehicle in Los Angeles and fly back to New York from there. “First, we’ll check to see if there are any individual motor home owners on our list with vehicles available in Dallas. If not, we’ll contact an affiliate company there. The affiliate handles all of the rental arrangements with the New York travel agent’s client. “The travel agent gets 10 percent of the rental fee. The affiliate gets 65 percent of that rent. Putting it another way, the affiliate gets business that I would not otherwise have gotten – without that affiliate status. My firm gets 25 percent of the rent. Everyone is happy.” Sandra Bate said the system works well in practice on an international level, because her company’s computers are hooked up to the Eastern Airline computer network. Eastern’s computers, in turn, are linked with those operated by 22 other participating airlines and travel agents throughout the world, she said. Thus, when the Eastern computers record requests for motor home pickups, “We can immediately find out if that person wants to pick up the rented vehicle at the airport or hotel,“ she said. The Bates firm is virtually unique, commented Sandra Smith, owner of L&S Motor Home Leasing Service, Inc., an affiliate based in Spring, Texas, a suburb of Houston. “They one of about three motor home rental companies I know of in the United States that are linked to an international computer network tied to travel agencies and airlines,” she said. “They reach out to motor home owners and suppliers like us by phone. The travel agent doesn’t have to call ‘umpteen’ different individual motor home owners all over the country. We have the same luxury. We prefer to deal with a national organization like Bates rather than individual owners. “It’s a good system – for the individual motor home owner. The motor homes don’t sit idle for long periods. “Without this system, any of those vehicles would be out of use most of the time. “People tend to use motor homes a lot the first year and much less often the second year. There’s very little use through the third year. By renting them out frequently, the owner can preserve the vehicle and help pay for it at the same time.” Sandy McCall, office manager of Old West Coach in Wheatridge, Colo., said her firm enjoys dealing with Bates, partly because it derives substantial monetary benefit from the relationship and its status as an affiliate. According to McCall, all one has to do is multiply times 15 – the number of new clients handed to her firm last year on a platter by Bates – and it’s easy to figure out why Old West Coach likes this arrangement. You can’t beat it, she said. |
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