With no experience in car rental and looking to move to a warmer climate, Todd and Leslie Foss left their teaching jobs in Western Canada, moved to Turks and Caicos and decided to enter the rental car business.
Starting with only 11 vehicles in 2006, the couple’s independently owned Grace Bay Car Rentals and Sales Ltd. has grown to approximately 300 vehicles with locations on the islands of Providencials and Grand Turk.
Named as a Thrifty franchisee in 2011, Grace Bay Car Rentals received the Thrifty Franchisee of the Year for the Americas and Caribbean in 2013.
Owner Todd Foss talks about how his company has grown and the hardships it has faced to become the largest car rental agency in Turks and Caicos.
What’s your total fleet size?
We began with 11 units in 2006 and now have approximately 300 vehicles.
How many locations do you have and in what types of areas?
The Turks and Caicos Islands are made up of 40 islands and cays, with only five islands inhabited. We are the only rental car company in the country to operate on multiple islands — Providencials, the largest populated island, and the capital island of Grand Turk.
On Providencials, we are the only agency with our own facility at the international airport and have locations on Leeward Highway and the tourism area of Grace Bay.
How did the business start?
My wife Leslie had taught for 18 years and I was a teacher and principal for 15 years. We were looking to take a temporary timeout from teaching. And originally from Western Canada, we were hoping to experience life in another country — one that had a warm climate with white sand instead of white snow.
Our high school friend was living in Japan and exporting cars around the world. He had just started getting inquiries from this tiny country called the Turks and Caicos Islands. We flew there to check it out and ended up falling in love with the islands’ beauty.
Without any plan, experience and little capital investment, the three of us purchased one of the original rental agencies on the island, which was not even in operation at the time.
Leslie and I quit our teaching jobs, moved to Turks and Caicos and entered the rental car business. Most people thought we were crazy, and we were not sure if they were wrong.
What are your primary sources of rental customers?
Our main source of business is the tourist industry, which is made up of about 90% North American travelers. We have the majority of the commercial market segment, as well.
Are you an affiliate of any kind?
Our independent brand Grace Bay Car Rentals was successful in acquiring the Thrifty brand in 2011. The Thrifty team has been extremely supportive and helped us grow the brand in Turks and Caicos to one of the largest agencies in the country.
In 2013, Grace Bay Car Rentals was awarded the Thrifty Franchisee of the Year for the Americas and Caribbean. We expect our Thrifty operations to triple in size by the fourth quarter of 2014.
Are you pursuing new sources of business/customers?
We are always interested in new sources of business and work hard at partnerships with both traditional and online travel agency partners. However, we spend the majority of our marketing efforts and budget on our existing customers. Repeat business accounts for 68% of our annual revenues. The relationships we have with these customers are strong and on a first-name basis.
How has the car rental market in your area evolved in the past 10 years?
When we first traveled to Turks and Caicos nine years ago, most of the roads were not even paved. The original car rental operators tell stories of keeping containers filled with shocks and front-end parts, which were needed just to keep the vehicles operating due to the terrible conditions of the roads and trails.
Currently, most of the main roads are paved and the number of resorts has tripled since we rented our first car back in 2006.
Describe your specific marketing efforts and what the payback has been so far?
We did not buy advertisement for the first three years of operation. One of the first customers to try us was a condo association president at one of the larger resorts. He liked our service so much that he proposed a partnership between his association and our firm, which we gladly accepted.
Soon, our first 11 vehicles were always on the road and people started writing nice comments about us on websites like TripAdvisor. Once this partnership started, our business took off and we haven’t looked back. Our commitment to customer service still pays dividends — with most new customers reading about us online.
How do you buy cars?
Turks and Caicos is a British overseas territory, so we drive on the left side of the road. This is significant since we are the only car rental agency in Turks and Caicos to operate a fleet of right-hand drive vehicles, which we source from Japan. Once customers realize it is much safer to drive a right-hand vehicle, they do not want anything else.
How do you sell your cars?
Import duties on vehicles to the Turks and Caicos Islands are extremely high. This creates a strong local market for used vehicles. Because we maintain our vehicles to a high level and provide customers with the entire mechanical history, we have waiting lists with people who want to purchase our fleet cars.
How long do you keep cars in fleet?
Because of the expense and difficulty of shipping vehicles to the Turks and Caicos Islands as well as the high import duties, we hold our vehicles a bit longer than you would find in North America.
Our Thrifty brand vehicles are kept for a three-year period and then sold to our independent brand where they operate for another year or two.
What are your biggest challenges with fleet?
One of our biggest challenges operating on a small market island is the availability of parts. In fact, we grew so fast that the local “mom and pop” stores were unable to keep up. We found ourselves needing common-size tires in the middle of the President’s Day holiday and having to turn down business while we waited for our shipment of supplies.
Eventually, we realized that if we were going to continue our pace of growth, we needed to become more self-reliant. As a result, we opened up our own part store, tire shop and service center in 2011, which has turned out to be an excellent decision.
What are your popular rental vehicles?
We have a large number of vehicle categories. However, unlike our competitors, we have many executive eight- to 12-seat vans for the private villa market — where multiple families will often rent together.
We also have a large number of small, mid-sized and full-sized SUVS, as there are still certain areas of the island that require more rugged choices.
What types of counter products are popular?
Our business philosophy is a bit different than most rental car agencies. As a customer myself, I have become frustrated with the trend toward “a la carte” sales. Business in all industries are endlessly trying to figure out ways to sell me 10 things when I really only want one. Whether it is an extra fee for an aisle seat on a plane, for wireless Internet at a hotel or for a child seat when you rent a car, the “nickel and dime” experience is alive and well.
There are only two optional purchases at our company: the Loss Damage Waiver and additional drivers. Need child seats? We include them complimentary. Want liability insurance? No worries — it is included in your rate. Numerous people have said that we are leaving a lot of money on the table by including so many “a la carte” items in the price. Yet, statistically our additional revenue is higher than most.
We feel that the inclusion of items in our price — along with the process of educating our customers of the added value — influences the purchasing decision in our favor.
Are there a lot of independent car rental companies where you are?
There are many independent companies on the island, especially on the less populated islands. Most are small family-run operations.
How are you surviving the current economic climate? And what is that economic climate like currently for you in your country?
Turks and Caicos Islands are a luxury destination. We had some of our best years during the recent economic crisis. We are feeling the impacts more now, not because visitors have stopped coming but because no new resorts have been built since 2008. This has kept the market size from growing.
What are your biggest challenges right now in the business?
Taxation has become our biggest challenge. As with many other governments around the world, ours is being forced to pay off the debt at a rate so fast that it cannot happen without new taxes being implemented. The burden of these taxes is being placed on the tourism industry.
What does the car rental market over the next five years in your country look like?
I am optimistic that we will see a couple of big resort projects come to fruition in the next few years. This would raise the occupancy levels of the country and increase the car rental market.
Do you have any legal threats that are challenging how you do business?
Doing business in the Caribbean is always a challenging proposition. You never know when the government might introduce new taxes or legislation. And often, we get little warning.
Any new laws or rules you must abide by?
The government recently tried to introduce a $30 temporary tourist driver’s license fee per contract. The fee would have had devastating consequences to the rental car industry as well as to small businesses that rely on car rental customers to get to their locations.
Fortunately, after strong lobbying, the government realized this and decided against implementing the fee.
To operate in your country, do you have to pay any special car rental taxes or fees?
There are a number of ownership restrictions, fees, taxes and licenses related to the car rental business in Turks and Caicos. These barriers of entry were difficult, costly to overcome and required the highest level of perseverance.
However, now that we have established ourselves as the largest agency and one of the largest employers on the island, I appreciate the obstacles as it would be extremely difficult for any new players to enter the market.