The health of the carwash industry
We talked to people from coast to coast to see what they have to say about the industry's health.
While it can be easy to offer up notions of an economic upswing and proclaim feelings of “hope” and “resurgence,” it is more than likely that many business owners are being cautious and stoic when it comes to any talk of a recession ceasefire. Because, let’s face it: The last few years have been rough. So rough, that carwash and detail shop owners collectively felt the heat and many were forced to cut back or close down. It is not surprising that no one wants to get their hopes up, or even plan out the upcoming year, because when the economy took a hit back in December 2007, it hit quickly and the aftermath snowballed for the next four years.
Now, gas prices are on the rise again. The Middle East is in turmoil, and purse strings are still tight. What does all of this mean to you as a car care professional? Well, in order to usurp any unwanted sanguine and artificial diagnoses, we will present you with just the facts and give you a truthful outlook. In talking to association directors from coast to coast, and internationally, and by purveying you with statements from the leader of the free world, we are presenting you with a diagnosis of the current condition, and the potential wellbeing of the car care industry.
First let’s start with some good news: Economist strategists are stating that the economy, thanks to tax cuts and overall diminished household spending, is in a healthy state. And, President Barack Obama, in a televised press conference on March 11, 2011, even admitted that the economy had “picked up steam.” However, he did point out that gas prices and Middle East uprisings could very well shake up the economy once again.
“In an economy that relies on oil, gas prices affect everybody – from farmers and truck drivers to restaurant owners and workers as well as consumers,” Obama stated. “Businesses see rising prices affect their bottom line. Families feel the pinch every time they fill up the tank. For Americans already facing a tough time, it’s an added burden.” Over the past year, he continued, as the economy has picked up steam and global demand for oil has increased, prices have increased again.
However, there is good news: Apparently, the aforementioned economic derailments are controllable. “America,” Obama stated, “is better prepared for supply disruptions than we used to be. Today, we use 7 percent less oil than we did in 2005, even as our economy has grown since then, partly because our economy as a whole is more efficient. We’re adapting. We’re producing more oil and we’re importing less. Our automakers, for example, are manufacturing more fuel-efficient cars — some that now get more than 50 miles to the gallon — and our consumers are driving more of these cars.”
From the President’s mouth to the business owner’s strategy, the above statements show that economically speaking, the nation’s pulse is in good health. But, how are carwash and detail shop owners doing now?
Recently, regional carwash conventions have been successful in terms of attendee numbers. Those in attendance at the recent Southwest Carwash Association (SCWA) Convention & EXPO were in “positive” and “upbeat” moods, according to organizers. A few months earlier in October, a new record was set in terms of attendees at Northeast Regional Carwash Convention.
Eric Wulf, executive director and CEO of the International Carwash Association™ (ICA) said, “I think everyone can sense a significant improvement in the industry’s ‘mood’ today from 18 to 24 months from now. I think this is largely because some uncertainty has been taken out of the market. This doesn’t mean that things have improved to everyone’s satisfaction, but simply being able to stabilize is an accomplishment after the type of business conditions we’ve had in the past few years.”
So, the President seems to think things have picked up steam, and regional shows are booming. But, to set forth an even more substantial diagnosis, we toured the world asking those tough questions about where we stand, and what you will need to do to survive, to hopefully give you some idea on what the industry’s as well as your future holds.
Carwash health on the East Coast
“The obvious takeaway from the recent recession is that operators across the board have had to tighten their belts and have gotten rid of the fat in their operations,” said Suzanne Stansbury, executive director of the New York State Car Wash Association (NYSCWA), the Connecticut Car Wash Association (CCA) and the Car Wash Operators of New Jersey (CWONJ), and editor and publisher of The Northeast Carwasher magazine. Stansbury currently sits on the Northeast Regional Carwash Convention board of directors. “Taking a microscope to their operations is something that should be done periodically, not just during a time of crisis, however.”
On the East Coast, Stansbury said, and most specifically this past winter, the weather has been a huge factor in morale. In breaking down various sectors, she said that each was hit and affected differently in terms of Mother Nature. The Boston market, for instance, got its first real winter in years and had to deal with snowstorms falling too closely together to allow for much washing. In neighboring Connecticut, where too much rain had been an issue the previous winter, they were also inundated with snow. The New Jersey market saw a mix, but still more snow than normal for that state. New York State, as always, got a ton of snow, but at least in the Capital Region the storms hit such that washing did occur and frequently. Stansbury also guesstimates that New York State, and pockets of Pennsylvania, had a storm winter washing season.
“Of course the weather, economy and competition are challenges operators face daily,” she said. “However, the biggest challenge I see facing operators is their inability to change how they do business. If they aren’t making money or washing the volumes desired, they have to be willing to make changes to their operations, but, unfortunately, many are not willing to do that.”
And, of course, she said, there are too many variables that can affect one’s volume. “The glory days of the late ‘80s may never come around again, so operators need to explore a variety of avenues in which to grow their businesses. They can’t just expect volumes to pick up without doing the work and stepping out of their comfort zones. Waiting for an ideal washing pattern to happen is unrealistic. An economic recovery will certainly help volumes, but there are a lot more factors to consider.”
However, with all of that said, Stansbury said the mood is more “positive” than she had anticipated and she has seen great anticipation toward a heavy pollen and bug season. She has also heard from vendors that business on their end is picking up.
To help boost sales for the future, Stansbury advises operators and owners to look into social media marketing through Facebook and Groupon advertising. “It can also help to attract new customers. The club plans are also great vehicles to ensure a consistent revenue stream when the weather is not cooperating. Maybe the configuration of their tunnel or the way they are washing a car needs to be altered. You have to be willing to evolve your business to survive today’s challenges. Flexibility and the ability to change when needed should be today’s operators’ best practices.”
Carwash health in the Southwest
Chuck Space, executive director of the SCWA, said if the recent SCWA Convention & EXPO, which was held in March in Arlington, TX, was any indication of the industry as a whole, then it looks to be very positive. The SCWA show, held for members in Texas, New Mexico, Colorado Oklahoma, Louisiana, and Arkansas and now a few members in Kansas, Tennessee and Mississippi, was a success, not just in terms of the number of attendees, but also in terms of the overall aura.
“We had a lot of positive feelings which seemed to be permeating throughout the event and lots of attendees seemed happy and upbeat,” Space said. “I think the reason — at least as far as the Southwest is concerned — is we had been suffering a little from the downturn in the market and unusual weather. Carwashes were not at the business levels they wanted. Money had also not been available for a lot of folks wanting to expand or renovate or build. The lending had not been available. Now it seems lending is opening up more. I had several Association members tell me that the last couple of months have been their best ever. And some of these owners have been in business a long time. That’s a pretty good indication that things are going in a positive direction.”
Many of our exhibitors also seemed to think that lending was opening up a little more so people now are looking to do more substantial renovations and upgrades and even undertake new construction projects, Space said. “The Southwest is definitely starting to turn around and it appears the same is happening all over the country.”
Along with the economic-based struggles, Space said the drought that has plagued the lower-half of the country for the past several years, has had an impact on many carwash businesses. “During droughts or the development of a community water plan, the water authorities have immediately considered shutting down or limiting commercial carwash operations. This action is based on the myth that carwashes use vast amounts of water.”
To address this misunderstanding, the SCWA started the Water Conservation Alliance Program designed to educate public officials and the general public about the environmental-friendliness of commercial carwashes.
“We have come a long way with the program, and now those same water authorities are calling, asking us to help them with facts and industry data as they prepare community water conservation rules and ordinances and regulations.,” Space said.
Space said they know their hard work has paid off because now when the word “drought” is mentioned, the words “professional carwash” are no longer first on the casualty list. “We still have work to do, but it’s been very successful and we have come a long way in changing the perception of public officials related to the carwash industry. These efforts have been and will continue to be helpful to our members and all carwash owners who might be concerned about future drought occurrences.”
In terms of succeeding, Space said the successful carwash operators focus on being consistently good when servicing their customers. They make sure their customer is happy and satisfied with each and every visit. He also said they pay attention to all the details: Whether it is employee training, or making sure equipment is clean and operating smoothly, or just making sure the premises are clean and neat, and well lit and safe; all the details are important in cultivating customers.
“Another thing I have noticed about successful operators is they work very hard. Operating a carwash is not just a 9 to 5 job. It is doing, behind the scenes, what needs to be done when it needs to be done. And then producing an outward result that is appealing to the customer senses. You are providing a ‘fresh look and feel’ for your customers. If they drive off in a car that looks and smells great and you have given them a good overall experience, those customers will come back.”
As for the future, Space said there will always be market ups and downs, as that’s just part of the economic cycle. But, he also added, carwash and detail shop owners are a tenacious group. “This is an amazing industry. It’s a strong industry. We provide a great service to our customers. We have the opportunities to reach out to the communities and have an impact. If you’re willing to put in the hard work, your business will be successful. And I see the industry on the whole only growing and getting better.”
Carwash health Down Under
In Australia, the health of the carwashing industry has been affected by another factor, not mentioned by our domestic counterparts: Water usage. The continent, plagued by droughts and La Niña, and then oddly enough plagued by flooding, has had to rethink its strategy altogether, and carwashes have had to shift their water needs, uses and throughput.
Richard Holloway (pictured above), president of the Australian Car Wash Association and managing director of Carwash Headquarters, said, “The onset of the drought across the whole of Australia five or six years ago gave a big boost to the industry as home carwashing was banned in many areas. The industry responded by negotiating with water authorities by limiting water use to 70 liters (18.5 gallons) per car and developed a strict measurement and audit scheme called the Car Wash Water Rating Scheme.” That scheme has since been utilized by many of these water authorities to measure and control carwash water use.
The past two years, however, have seen the opposite situation with the La Niña condition in the Pacific bringing consistent, heavy and unseasonal rain to most parts of the country, Holloway said. “The result has been the removal of home washing water restrictions in all jurisdictions, and substantial reductions in turnover across all sectors of the industry. This, combined with a retail slowdown in the economy, has substantially impacted the industry.”
In an effort to weather the storm, and as a part of its consistent environmental positioning, the Australian Car Wash Association has partnered with Australia’s most respected environmental group, Clean Up Australia, to educate the public on the environmental concerns of at-home carwashing where waste water enters the storm water system.
“The consistent message is that the only way to sustainably wash a vehicle is at a commercial carwash,” said Holloway.