Operations

In A New York Minute, A Line Run Reaches Its End

Martin Romjue
Posted on October 18, 2018
Dan Goff, co-owner and general manager of A. Goff Limousine and Bus Company, recently closed Starlight Express, his Charlottesville, Va.-based line run to New York City due to Megabus' entry into his market. (LCT file photo)
Dan Goff, co-owner and general manager of A. Goff Limousine and Bus Company, recently closed Starlight Express, his Charlottesville, Va.-based line run to New York City due to Megabus' entry into his market. (LCT file photo)

CHARLOTTESVILLE, Va. — Dan Goff got a text at 10:32 on the night of Oct. 8 from his driving staff while he was attending a dinner with other bus operators, dealers, and finance professionals in Washington, D.C.

Included was a link to a local TV news report that Megabus.com would open for business in Charlottesville within five days.

One minute later, Goff told his staff he was closing the Starlight Express, a line-run that ran between Charlottesville, Washington, D.C., and New York City he's owned and operated since 2008.

Goff, a veteran bus operator who runs 22 fleet vehicles as co-owner and general manager of A. Goff Limousine and Bus Company, knew instantly he could never compete against the resources and economies of scale of Megabus.com. The bus service, which appeals to Millennial travelers, offers heavily discounted fares on regular motorcoach line runs among multiple cities along the East Coast.

“The line run business has been changing,” Goff said. “We had tremendous growth for years with the advent of [casino trip] buses and legitimate operators waking up to it. It’s been on a decline since then.”

Ever the realist, he commented to a local news outlet: “Uber is a disrupter in that it offers intra-city travel, and Megabus is a disrupter to the traditional bus model.”

“Megabus is branching into lower tier cities and college towns,” he told LCT. “College kids will ride that bus. We were a prime opportunity and an easy target, a weak little sister.”

In 2008, Starlight Express did about $600,000 in revenue. Ten years later, it had dropped off to $163,000. Goff recalled how he bought the line run at the right time during the height of the Great Recession. Many people didn’t have jobs and/or much money, so the line run made sense for travelers looking for a bargain.

Now, people have jobs and money, and as fuel prices rose this year, ridership did not, Goff said. Another troubling sign happened when Greyhound ended its service in Western Canada after many years due to declining sales and revenue.

“I knew things were very difficult and unlikely to get better in the near term,” Goff said. “With my forecasting last June, I realized I would lose $20,000 per month running this line until Oct. 4. So I suspended service in June until Oct. 4 because I couldn’t see value in losing money. We were teetering on the edge anyway with that product line.”

Goff was still making $66,000 annual profit on Starlight despite the shrunken revenues, and concedes it’s never easy to give up a revenue stream. “You don’t want to have $66,000 go away, but with margins under pressure outlook was risky, not rosy,” he said.

The closure has already brought a financial upside—since 92% of his company’s motorcoach service miles will now be exclusively in the state of Virginia, his fleet has a lower risk profile and qualifies for lower insurance rates, including for his five MCI and one Prevost coaches. Starlight, which ran 1,500 mile round trips several times per week on a MCI motorcoach, required higher rates because of interstate travel.

The local news media marked the end of Starlight with several reports. “It’s not a funeral,” Goff said. “It’s a party to send off an old friend. I’m not crying in my beer.”

Goff has developed his SuperMax Motors dealership into a leading reseller and refurbisher of Prevost and Volvo motorcoaches. (photo: Dan Goff)
Goff has developed his SuperMax Motors dealership into a leading reseller and refurbisher of Prevost and Volvo motorcoaches. (photo: Dan Goff)
Used Coaches Grab More Limo Market Share

And he has no reason to. Just as one opportunity came to a stop, another has been gradually gaining momentum in the last several years. Goff recently publicized he has completed one full year as one of only two official, fully licensed, and authorized dealers of used Prevost motorcoaches. He signed his contract with Prevost in September 2017.

As a licensed dealer and reseller of trade-ins on buses and other luxury fleet vehicles through his Charlottesville-based SuperMax Motors, Goff has reached a new sales peak of 93 used coaches, minibuses, and a few limousines from October 2017 and until early this month. Of those, 67 sales were for Prevost coaches with the remainder of sales split among other coach bus brands such as MCI, Van Hool, and Temsa, and minibuses and limos.

As an experienced operator, he knows how to have motorcoaches refurbished to limousine industry luxury specs, in particular the Prevost X-3 and Volvo 9700 models. He also understands the feasibility of limo operators getting into or trying out the motorcoach market with the advantages of a used bus that commands lower overhead compared to that of a new one.

“I’m helping design the buses for the taste and sensibility of a limo company,” Goff said. “We will, over the course of the next year, become perhaps one of the top two or three used motorcoach dealers in the country.”

The best match for a typical luxury transportation fleet is a used motorcoach in the $180,000 to $400,000 range with new paint, new leather seats, black and white color themes, and wood-style flooring, he said. “No matter how big you make a minibus, it doesn’t have the luggage capacity of a coach. You want the sex appeal of a minibus without looking like a motorhome.”

Related media reports:

Related Topics: bus market, commuter services, Dan Goff, dealerships, industry trends, line runs, MCI, motorcoach operators, motorcoaches, Prevost, shuttle buses, used vehicles, vehicle sales, Virginia operators

Martin Romjue Editor
Comments ( 2 )
  • Dan Goff

     | about 2 months ago

    You are quite right Anthony. We were running one coach 4 days a week and one coach 2 days a week on each 347 mile leg. At $600K the each coach was doing great. When we were grossing $400K it was still attractive. $300K?...not too bad. $200K?...uh oh! So we cut out two days and ran only one coach. Even at $163K a year and running only 9 months, we were still netting $66K. BUT Megabus would have cut that at least in half and then kablooey. So we said, Hale and Farwell to The Starlight Express. Should Mega bail out in the future maybe we would come back but as they say out west “This town isn’t big enough for both of us!” Thanks for weighing in Anthony! I love talking numbers with operators.

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