Spending is estimated to advance another 7.1% in 2018 and will expand to $1.7 trillion total by 2022.
Motorcoach manufacturers and distributors want first-time buyers to succeed. They know limousine companies that want to sample the bus business will fail if they don’t understand the differences and costs of running a motorcoach versus limo fleet vehicles. For successful seasoned operators, today’s state-of-the-art motorcoaches are loaded with safety features and amenities that enhance their large-group service to clients.
Representatives from major motorcoach companies talked about various aspects of the business during a panel discussion March 1 at the International LCT Show in Las Vegas.
“We see the limousine industry as a growing market for motorcoaches, but it’s our job to make sure they know the nuts and bolts of the business because we need them to succeed,” said Mitch Gurainick, MCI’s vice president of pre-owned coach sales. “Our job is to educate them on the pros and cons of the motorcoach business so they know what they are getting into. We don’t want the bus coming back to remarket and having to deal with the finance companies and all that, so failure is not an option.”
Steve Zeigler, director of business development at Prevost, said, “My advice is first-time limousine operators shouldn’t try to become a bus company. You don’t need to change your business model. You already provide professional transportation services; now you’re just adding another vehicle to your portfolio you can market to your clients.”
However, Gurainick and Zeigler stress doing homework before entering the motorcoach business. Talk to your insurance company for quotes, find a repair facility, figure out how you will wash the bus, and dump the lavatory — a few issues specific to motorcoaches.
“Most important is to plan a budget to get into the business,” Gurainick said. “You have to know your overhead costs upfront so you don’t get in over your head right away. That includes paying your drivers, which can average around 25% of your operating budget. And maintenance costs more than for a sedan fleet. Bus tires can run $4,000 to $5,000, so you have to budget for routine maintenance and repairs.”
The big upside is properly maintained motorcoaches can run a million-plus miles, and older refurbished vehicles can keep running 10-plus years. Zeigler noted he knows of Greyhound buses that have clocked two million miles.
Both experienced executives pointed out first timers can get in over their heads fast. It’s best to ease into the market buying a used bus.
“Get your feet wet first with a used bus and buy from a reputable U.S. bus dealer — someone who is going to sell you a quality used bus that has been inspected,” Gurainick said. “We do a 217-point inspection and provide some warranties on parts and labor. The last thing a new operator needs is to start dumping money into an old bus that needs work.”
Roman Cornell, executive vice president of ABC Companies, suggested small operators who can’t afford a full-time bus mechanic should consider shared maintenance services. “Small operators should look at possibly working with other operators to share a mechanic or form an affiliate bus network to share maintenance services as a way to reduce costs,” he said.
Another cheaper way to test the waters is to lease a used bus. “We think it’s a good way to get into the game,” Gurainick said. “A new operator can lease a used bus for six months to get comfortable with the vehicle and market it to clients. If it works, then they buy the bus and we credit them for the lease. It’s a safe way to enter the business and we have a 60-70% conversion rate from the lease program.”
Zeigler noted operators who hesitate to step up to the plate might want to try a mid-size, 27-passenger motorcoach. “That’s a great way to buy pre-owned to test the vehicle with your clientele and see how they react and then you can move up to a full-size motorcoach.”
Considering a new motorcoach? Today’s vehicles are equipped with state-of-the-art technologies and safety features, passenger comfort amenities, and various cabin designs. For example, Cornell said his company offers luxury custom galleys to any customer specification.
“We have recently delivered a large rear horseshoe lounge with custom conference table and we also offer tables that have self-adjusting flaps that can be extended to make the table larger,” Cornell said. “We also offer 110v outlets equipped with USB outlets or just full USBs. A full black leather interior is always a must as well. We are also developing a few new items to be unveiled at the start of next year. This possibly will include self-adjusted window tinting and more custom features.”
Travelling by motorcoach is one of the safest ways to get around, according to the U.S. Department of Transportation. However, one major accident can receive widespread publicity and hurt the entire bus industry. Regarding today’s safety features, Cornell said new buses are fitted with many standard items and technologies including: antilock brakes, automatic traction and electronic stability controls, fire suppression system, lane departure and tire pressure warnings, backup-up camera, two roof hatches, and daytime running lights.
In addition, at the start of November 2016, all new motorcoaches and some other large buses must be equipped by manufacturers with driver and passenger three-point lap-shoulder belts. The National Highway Traffic Safety Administration rule doesn’t apply to school buses or city transit buses. Cornell said ABC and other leading manufacturers and distributors already have voluntarily equipped their motorcoaches with 3-point seat belts.
Motorcoaches are built for smoother rides, with improved HVAC systems, numerous cabin amenities, and plush interiors, Cornell said.
Maintenance & Service
Buying a used or new motorcoach from a reputable company is the only way to go because those manufacturers and distributors stand by their products, especially offering peace of mind through warranty, service and maintenance programs. Their goal is to keep you on the road making money, not in the shop spending.
Companies you want to deal with provide such services as 24/7 technical support, a national network of service centers, and/or authorized repair facilities, roadside assistance, and refurbishment services to keep your older vehicles running like new. They also will go the extra mile educating and training customers to ensure they operate and care for motorcoaches to live a long productive life on the road.
One interesting concept Prevost started was its new mobile maintenance and repair service. The company has rolled out a number of full-fitted vans that can go to a customer to perform repairs and scheduled maintenance, Zeigler said. For example, Prevost has some six mobile units in the San Francisco Bay Area that can go to an operator’s shop to perform scheduled service, as well as roadside help.
Zeigler sends a van to big stadium events to perform service on multiple motorcoaches. “We’ll send a mobile van to a NASCAR event where there might be 100 motorcoaches parked for a couple of days. It’s a great way to take care of maintenance for multiple customers while they are just sitting there at a concert or some big event,” he added.
At this year’s 2016 LCT-NLA Show East Show, Nov. 13-15 at Harrah’s Resort, Atlantic City, two sessions will help educate operators about the bus business. Go to www.lcteast.com for more information.
Bus Safety, Monday, Nov. 14, 10:40 a.m.-11:50 a.m.: Whether you just bought your first bus or have a full fleet, operating legally and safely should be your top priority. These panelists will cover Department of Transportation (DOT) and Federal Motor Carrier Safety Administration (FMCSA) regulations, guidelines, and tricks of the trade.
Selling and Marketing Your Bus Business, Tuesday, Nov. 15, 9:30 a.m. to 10:15 a.m.: Investing in the purchase of a bus can be a lucrative decision for your business if properly leveraged. Discover how to maximize your return on investment with tips from operators who have succeeded.
Moderator: Tom Holden, Rose Chauffeured Transportation; Panelists: Robert Alexander, RMA Worldwide Chauffeured Transportation of Rockville, Md.; Eric Devlin, Premier Transportation Services of Dallas.
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