January 2009

Opportunities on the horizon for motorcoach industry

by Victor Parra

I suspect many of you want to know what rock I’ve been living under and are asking, “Vic, with the wild swings we’ve seen in the financial markets and the global economic turmoil that has affected every country and every segment of society, how can you be at all optimistic about our future?”

My enthusiasm for our industry and its future is based on a number of factors that have come into play during the past year, which suggest we may be at the start of one of the most lucrative periods in our industry’s long but not-so-celebrated history. If we handle these opportunities properly, we may have a lot to cheer about.

Charter Rule opens doors
Let’s start with the charter bus rule that went into effect April 30, 2008. I don’t think anyone in our industry anticipated the number of large and profitable contracts that would come our way. In its final rule, the Federal Transit Administration created a definitive line between what belongs to the private motorcoach industry — charter work — and what remains the purview of the transit companies — mass transit. This opened the door to hundreds of charters with professional and college sports teams, organizers of county and state fairs, and hundreds of businesses and organizations — all of which had previously used the services of their local transit authority.

Some examples of new business that has come our way since the rule’s effective date include:

  • Kentucky Derby – A private-public partnership this year, it will be serviced completely by private operators in 2009.
  • Indianapolis 500 – Same as the Kentucky Derby; IndyGo, the local transit system, has been very supportive during the transition.
  • Washington Redskins (NFL) – Private operators took over completely on Oct. 12, 2008.
  • University of Tennessee – Premier Transportation took over this service after the local authority was made aware of the charter bus rule.
  • Baltimore Ravens (NFL) – Private motorcoach operators took over with the first pre-season game; team management wrote a letter complimenting private operators on the quality of service.

Foreign Travelers Return
Another encouraging development is the large number of foreign travelers coming to visit our great nation. Two factors are contributing to this phenomenon. First, the U.S. dollar — though it has gained strength of late against the British pound and the euro — remains historically low against most foreign currencies. This is making travel to the U.S. more attractive and affordable.

Surprisingly, the second factor comes from our recent Presidential elections. In speaking with European tour operators and group travel planners, one individual described what happened the day after the election: “It was like someone flipped a switch. The phones started ringing with hundreds of groups wanting to come to the U.S., many for the first time.”

But these opportunities also come with challenges we must be aware of. For example, if we don’t pursue a charter opportunity because we refuse to work with the competitor down the street to handle a large sporting event move, or, if we don’t execute effectively and provide the highest quality service, the 111th Congress may take away all our hard fought gains. And, if we don’t understand how to be “export ready” when that call comes in from the overseas tour operator, we could allow large amounts of business to slip through our fingers.

What lies ahead are great opportunities, accompanied by the need to change the way we do business. That may not be easy for some who have grown accustomed to only one way of operating their company.

The future is bright and waiting for us all… I hope to see you there.


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