Operations

4 Major Challenges For Motorcoach Services

Martin Romjue
Posted on December 14, 2017

(LCT image)
(LCT image)
When LCT set out to identify the top four issues facing operators of the 50+ passenger motorcoaches, we ended up with at least 10 and had trouble choosing a top four.

It underscores why running a business in one of the most profitable, safest, and highly restricted ground transportation sectors comes at a price.

As the chauffeured transportation industry increasingly moves toward buses of all sizes, and the traditional motorcoach industry adapts to faster, more detailed levels of service and quality, the term “luxury coach transportation” sharpens with accuracy.

Training programs, a commitment to safety, and best operational and customer practices are some of the core principles of the International Motorcoach Group, led by president Bronwyn Wilson. The private organization holds meetings and sessions for its 56 member companies throughout the year to maintain high standards of operation. (IMG photo)
Training programs, a commitment to safety, and best operational and customer practices are some of the core principles of the International Motorcoach Group, led by president Bronwyn Wilson. The private organization holds meetings and sessions for its 56 member companies throughout the year to maintain high standards of operation. (IMG photo)

To start seeing what is top of mind, we checked in with Bronwyn Wilson, president of IMG Motorcoach Group (IMG), the leading network of motorcoach transportation providers in North America that focuses on high performance. The elite private group, with 57 company members, holds its operators accountable to standards of excellence in the areas of safety, maintenance, training, road support, and customer service.

Among the challenges Wilson cited for operators are multiple state and federal regulations, the increasing costs of equipment, the pressure to generate a good profit, and a near-universal shortage of good drivers.

The rising costs of equipment and higher interest rates make P&L and financial management critical for operators so they can translate customer volume into a good ROI. Motorcoach prices have gradually increased as buses evolve on safety, technology, and quality, and as more consumers expect luxury style comforts and amenities.

Success depends on getting motorcoach riders to “understand what it takes to support a fully functional and great business,” Wilson said. “There is a disconnect on the (customer) willingness to pay for superior product that the industry needs to engage in, which is a focus in our meetings.”

LCT talked with a sample of operators for an overview of the realities of running motorcoach transportation in a high-demand but competitive environment.
 
NO. 1: Regulations/Safety
Regulator overload is a real challenge for smaller motorcoach operators who cannot afford full time managers to handle all the compliance at federal and state levels. Random federal inspections are often perfectionist exercises resulting in citations for minor infractions. Larger operators may have more buses, but more organized systems of compliance with adequate staff support.

Florida-based motorcoach operator Brian Scott emphasizes making Escot Bus Lines service convenient and comfortable so the traveling public appreciates its value. (Escot photo)
Florida-based motorcoach operator Brian Scott emphasizes making Escot Bus Lines service convenient and comfortable so the traveling public appreciates its value. (Escot photo)
The motorcoach industry has become more capital intensive in the last 10-15 years, due mostly to government mandates on equipment, says Brian Scott, president of Escot Bus Lines in Tampa, Fla. That would include everything from ASR and anti-slip requirements, to five generations of emissions rules, to safety mandates such as ADA lifts and three-point seatbelts.

“Each mandate affects other systems and parts downstream,” Scott said. For example, “cooling systems have to be reevaluated and redesigned because the heat load is greater than the capacity of the radiator. There are an unbelievable amount of government mandates that go into equipment to make costs go through roof which are difficult to recapture.”

Coupled with rising insurance and claims costs and more expensive motorcoaches, the mandates force up prices and rates at a time when the public is only willing to pay so much for a bus ride, Scott said. “We are trying to do it the best way we can and make it convenient and comfortable so the traveling public places a value on that service.”

When the amount and scope of regulations rise, they affect smaller operations more than the larger ones, says Ronald Willis, CEO of Road Runner Charters in Hurst, Texas, which runs 110 motorcoaches. “Regulations don’t hurt me as much because we’re big enough to have a full time safety manager, maintenance manager, and a driver manager.”

Random Department of Transportation checks and getting minor issues resolved through bureaucracy are two examples of how regulations cause costly diversions for operators, Willis said. Sometimes getting a minor infraction that’s been resolved removed from regulatory databases can be difficult.

Gillis cited one incident that was clearly not life- or safety threatening. “In one case, we got written up because of an air hose rubbing up against a piece of frame. If they can find something, they will find it to write up a report.”

Another operator who does cross border trips between the U.S. and Mexico has to contend with hours of border delays as passenger unload and reload because of interstate regulations.

“In Mexico, buses are a big part of the culture,” says Kelly Cook, a consultant and partner at Santiago Express in Dallas, Texas. “For people who have visas and can travel to U.S. and those in the U.S. who can travel to Mexico, it’s almost more popular to take a bus than fly. Buses are nicer than jets, with more seat room. You have to be stringently conscientious about insurance, rules, and regulations.”

While regulations can involve costs, operator Dennis Streif sees a silver lining in that they promote safety for passengers and drivers. He does not see any regulations as an undue stress on his business.

“I think the clients have more struggles finding good operators instead of good operators finding clients,” says Streif, the vice president of Vandalia Bus Lines in Caseyville, Ill. “For clients to find a carrier like us who drives through the night and finds relays is tougher since many operators are getting out of those movements and don’t want to do them. There’s still a premium for a driver relay. Some companies won’t drive between the hours of 1 a.m. and 5 a.m. If that’s the case, then they lose some revenue opportunity.”

NO. 2: ELDs & Seat Belts
A more immediate challenge is the new federal mandate on electronic logging devices (ELDs), which goes into effect on Dec. 17. Motorcoach operators are fully transitioning to the electronic platform that tracks all vehicle movements and hours of service. Each bus will have a display screen in the cockpit that requires drivers to “FOB,” or swipe an electronic key when going on duty.

“We’re basically leasing the equipment which is baked into monthly fees,” says Scott of Escot, which runs 40 motorcoaches. “It will be costly, but also a cost savings. You won’t need logbooks. You won’t have to do manual paperwork audits. All hours of service can be managed electronically via the cloud. It saves time, but requires daily management. And you can’t change logs after a 13-day limit. If you found a problem with logs after the past 13 days, you can’t make any changes. So this forces you to manage hours on an active basis.”

Joe Gillis, CEO and co-owner of NW Navigator Luxury Coaches in Portland, Ore., cited ELDs and three-point seatbelts as examples of new challenges in the motorcoach business.

“The cost to install ELD technology is incredible,” Gillis said. “You need a full-time person to handle the ELD. [Authorities] could come in and look at logs and give tickets based on audits of logs. Now we’re talking about FMCSA and highway patrol possibly using it as a weapon against us as well.”

Gillis pointed out how motorcoach seats have always been positioned as “compartments” to serve as an accident restraint system in lieu of seatbelts. Even without seatbelts, motorcoaches are the “safest [ground] transportation on the planet,” he said.

“With buses, the entire vehicle is a restraint system,” Gillis said. “To have a seatbelt, you must have a G-force event stress test. Heavier flooring is needed and that has brought up the weight of the bus. It’s a great idea for cars, but nobody will wear them on buses. I’ve only seen one person put a seatbelt on. It’s really hard to get people to wear those. Now, in an accident they will hit seats no longer meant to be hit that used to be part of the crash resistance of the vehicle. The seats won’t give, and people won’t wear belts.”

Gillis also is concerned about the possibility of law enforcement trying to pull over motorcoaches and check if everyone is wearing seatbelts. He said motorcoach operations do not have “flight attendants” who walk up and down aisles making sure passengers are wearing belts. “The driver would have to stop and enforce it, which is like having the airline pilot check for seatbelt use,” he said.

NO. 3: Driver Recruitment/Labor
Operators have a hard time finding qualified drivers for motorcoach tours and long trips with good customer services skills who stick around.

In dealing with the driver shortage for a long time, Escot Bus Lines is trying social media and Facebook ads after working through newspaper ads, Craigslist, Indeed.com, and Monster.com, Scott says.

“IMG has done driver recruitment promotional videos, and we do that as well to attract drivers, even for those who’ve never been in this industry,” he says. The videos explain what the job is about for candidates who’ve never driven. The company also has set up an online hiring process with a HR management platform that speeds up and simplifies the process.

“We shorten the time for onboarding with the online platform and it helps us manage the process a lot better,” Scott says. “Drivers can get behind the wheel sooner.”

Attracting candidates in their mid-30s to mid-50s is harder due to varying hours and seasonal work, making it difficult to guarantee a 40-hour or 50-hour week of income, says Streif of Vandalia, which operates 63 vehicles and employs about 85 drivers. In addition to trying ads and online job postings, the company has parked vehicles along highways at times with help wanted signs. “No one method brings in an abundance of candidates,” Streif said. “We are trying to bring in more local sources.”

Motorcoach services need to do a better job of getting its message out and widening the targeted pool of applicants, says Dan Goff, vice president and general manager of A. Goff Transportation in Charlottesville, Va. They are also faced with competition from Fed Ex, UPS, and shuttle services that generally pay higher wages. “No human being at age 15 watches a bus going by and says ‘that’s what I want to do.’ In 1930, yes. Now, no.”

Virginia-based motorcoach operators Stephen Story and Dan Goff are adjusting their operations to changing client markets through use of more technology and customer service strategies. (LCT photos)
Virginia-based motorcoach operators Stephen Story and Dan Goff are adjusting their operations to changing client markets through use of more technology and customer service strategies. (LCT photos)
NO. 4: Major Market Shifts

As in the chauffeured transportation industry, motorcoach services are trying to deal with major shifts in the behavior and preferences of clients, who increasingly prefer internet and technology oriented interactions. The challenge becomes in distinguishing your customer service experience.

“Ten years ago, we had 5% of sales from the Internet,” said Stephen Story, president of James River Transportation in Richmond, Va. “At the moment, 60% of our reservations requests are either quotes that get converted or requested through online sales. That is a staggering number.”

How to sell and close the sale and get its high-end service across electronically has been James River’s big focus, Story said. “Everything can be tracked, so we know our success, and know where we lose people. We know if people start to get bored and exit our website and reservation process. We can track that and modify questions we ask.”

Motorcoach services need to do a better job of getting its message out and widening the targeted pool of applicants, says Dan Goff of A. Goff Transportation.
Motorcoach services need to do a better job of getting its message out and widening the targeted pool of applicants, says Dan Goff of A. Goff Transportation.
As a result, the entire sales process has to adapt, Story said. “We have to create an e-based sales approach and conversation and develop a relationship electronically with e-mail responses, videos, and using social media to get messages to clients. Many prefer this because they don’t want to talk on the phone. Although 40% of customers still want to have a phone conversation, we had to become really good at having an e-conversation and sales process. We’re still massaging it and making it better, and training employees to communicate differently.”

Motorcoach operators are also seeing a generational shift in the long-term tour market as fewer Millennials and Gen Xers take tours while there are not many tour trips that appeal to them, Goff says.  

The traditional motorcoach tour destinations of casinos, Branson, Dollywood, Elvis, Nashville — most heavy with religious and country music themes — are getting a bit dated as they appeal mostly to older Boomers and the prior generation, Goff said. Operators are concerned about declining tour revenues from an aging population, so what will it take to make younger generations embrace bus tours? Some potential lies in cannabis tours, which could someday succeed the wine tours as appealing to middle age and younger bus tour groups, Goff says.

“The question is, how do you develop relevant tours to this new generation of people who should be our customers but who are happy to get on a Megabus or Bolt bus, but not Greyhound? How do we reshape the tour market, like we have the line-run market?”

Related Topics: charter and tour, charter and tour operators, Dan Goff, International Motorcoach Group, motorcoach operators, motorcoaches, Stephen Story

Martin Romjue Editor
Comments ( 1 )
  • Julian Hadley

     | about 11 months ago

    Information is key. Promotional videos showing the changes placed on transportation companies and details explaining how passengers can comply would foster an early adoption of newer rules for current and future group reservations. Spend less time marketing on social media and more time connecting with your customers face to face to educate them on changes in the industry and give them flexible pricing options to gradually phase in the price increases that will undoubtedly need to come in 2018.

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