“People who took tours have changed. As an industry we haven’t learned to market to the new demographic.” Nearly 2,000 attendees at Bobit Publishing’s annual BusCon show in September in Cleveland were instructed on how to cater to that new demographic during Dale Bunce’s speech.
The three-day event featured seminars by industry professionals on topics that included reducing maintenance costs, spec’ing buses and e-commerce. Meanwhile, the trade show featured more than 120 exhibitors, many of whom launched new products, including motorcoaches and small and medium-duty buses.
In his keynote speech, Bunce, president of International Marketing Development, spoke about changes in the tour and charter market.
“Traditionally, seniors, who make up the largest demographic, took group tours, but now they have higher expectations,” he says. The market of the future will be the corporate and commuter segment, and Bunce says operators need to learn to be flexible to accommodate this new market.
“Corporations will increase use of motorcoach services and seniors will expect more experiences and travel options,” he says.
For operators, the major changes will be in distribution. Motorcoach operators’ poorest margin of return is with the charter segment, which makes up an average of 73% of market distribution. Operators need to rethink the way they book their motorcoaches, says Bunce.
The five biggest issues facing motorcoach operators today, according to Bunce, are:
Driver related — with operators having a 24% turnover last year.
Competition — there are too many coaches and operators and not enough marketplace.
Lack of business tools.
Operating costs — increases in fuel and insurance costs as well as costs for training and recruiting drivers.
Differentiation — this being the largest problem, because there is very little difference in products. Price is seen as the only difference between motorcoach companies.
The presentation also covered sales of new coaches, which have been declining since 1999. At the same time, costs of a new motorcoach reached $350,000 in 2000, while revenues have remained flat for the past several years.
Following the events of Sept. 11, Bunce wrote an open letter to the motorcoach industry that the changes he predicted for the motorcoach industry during the next few years could accelerate rapidly.
Bus industry know-how
Judging from the turnout at seminars, attendees were interested in learning about some of the latest industry trends.
Michael Monteferrante, president of e-commerce site iRail.com, discussed how the growth of the electronic marketplace would make the procurement of railcars, buses and other equipment faster, more efficient and more economical.
Monteferrante’s company launched an e-marketplace called iBusXchange that features e-catalogs, auctions and inventory management.
“This is without a doubt where business is going,” says Monteferrante. “It is a communication tool to bring in new business opportunities for both the buyers and suppliers.” He expects 40% of transactions in 2004 to be done through e-commerce. These e-transactions, he adds, will provide a 15% to 20% cost savings.
Industry consultant Halsey King discussed the do’s and don’ts of writing bus specifications. “Arm yourself with sufficient information to make an informed business decision,” says King. Having a thorough understanding of your operation and bus performance requirements is another important factor to consider, he says.
Pay attention to the environment when developing your specifications. For example, you might want to order white buses in hotter climates. “Don’t order your buses based on some other organization’s specifications, and don’t forget to look at new technologies and their possible application,” says King.
Christopher Ferrone, vice president of American Sightseeing and Grayline in Chicago, talked about strategies to control spiraling costs in the garage. Making fewer repairs and reducing the number of mechanics is typically the mistake people make in reducing maintenance costs, he says. In fact, it is best to do the opposite.
Ferrone created a management plan involving 10 steps.
Some essential steps in reducing costs include:
Perform daily ready-line inspections.
Unify equipment through specification.
Repair now, not later.
Diagnose the problem, don’t just change the part.
Have a reliable component rebuilder.
New products unveiled
ABC Bus Inc., one of the many companies introducing new vehicles on the trade show floor, unveiled for the first time the M1000 Series mid-size coach. With an estimated 10-year road life, the Altoona-tested M1000 features a heavy-duty Freightliner chassis. The 35-foot vehicle includes a seamless, buttonless interior and Carrier roof-mounted climate control system.
Thomas Built Buses was also on board, presenting its newest SLF 200 series of buses. The Allison 2000 series transmission, fully electronic and using synthetic transmission fluid, is now standard on the SLF 230. All SLFs use ALX tempered aluminum to provide strength to the body of the bus.
The all-new E-550 Super Duty Cutaway was Ford Division’s offering. The E-550 is available in five lengths, and a four-speed electronic overdrive transmission is standard. The E-550 lends itself to a wide variety of customer applications, including shuttlebus, school bus and ambulance/rescue.
Another first on the show floor was Cummins Inc.’s presentation of the new low-emission ISB Series engine. Cummins’ 5.9-liter engine meets the 2002 standard of 2.5 grams of NOx and NMHC without using high-cost special fuel or expensive exhaust aftertreatment.
Other companies introducing new products included: Blue Bird Corp., Champion Bus, ElDorado International, Federal Coach, Glaval Bus Inc., Goshen Coach, Trolley Enterprises Inc.; and Workhorse Custom Chassis.
In the early morning hours of the final day of the trade show, Sept. 11, an announcement was made about the attacks on New York and Washington, D.C. Soon after, everyone in the convention center was told to evacuate the premises, as BusCon was officially over. Later it was revealed that one of the hijacked planes was flying over Cleveland.
Outside the convention center, people talked on cell phones, calling home and airlines to find out about their cancelled flights. For some attendees it was a few days wait before flights resumed, and they could head home.
BusCon 2002 is scheduled Nov. 10 to 12 at the Orange County Convention Center in Orlando, Fla.