In 2020, business and leisure travel companies suffered severely. With no one needing rides to various destinations, motorcoach operations found themselves scrambling to decide who to keep and who to let go; which vehicles needed to stay on insurance or be sold; and many other difficult scenarios.
Feeling the Blow
Kim Grzywacz, co-owner of CIT Signature Transportation in Ames, Iowa, said in 2020, her company did about 25% of its revenue. In 2021, it’s looking at 33%. Nevertheless, as small as the increase is, at least business is upward bound.
“I took a cancellation today. It was a group going to do volunteer work at the Ronald McDonald House, which has now been shut down. On the other hand, I had one bank client say, ‘We're doing this. We want to instill confidence in the public.’ It didn't matter that 11 passengers had cancelled. They still wanted to go,” she explains.
The current state of operations is still in flux; one week it can look like it's going to be better, and the next can shatter that vision. Grzywacz thought June 2021 was going to be better, but had all but one of the company’s Washington, D.C., trips slated for that month cancel.
“I just want to do my best. I'm sure a lot of people feel the same. You try to not watch too much news, and yet that’s what gives you the information you need to test the waters and find out what's going on. Staying informed helps you form a battle plan,” she says.
Elizabeth Hall, COO of John Hall’s Alaska in Anchorage, says at the start of the pandemic, she believed there would only be a 90-day delay in operations. As further developments, closures, cruise delays, and travel continued to come to a halt, the organization went 21 months without revenue.
In addition, John Hall’s Alaska (JHA) went a full calendar year with suspended operations. The last tour was operating in Alaska during the height of closures and guests flew home the third week of March 2020. The next operating tour took place in the winter Alaska season of March 2021.
The company took active steps to implement a strict COVID protocol, including:
- Thorough motorcoach cleaning.
- Continuing to mandate negative test results within 72 hours of departing home for any trip passengers, regardless of vaccination status.
- Implementing vaccine requirements in locations that required them such as remote Alaska villages, national parks, and other destinations around the world.
- Making a formal commitment in November 2020 that JHA would continue limiting operations to 50% capacity through 2021 to give travelers peace of mind and space onboard motorcoaches.
For JHA, the decision to operate at 50% capacity and maintain testing and mask requirements was not always popular but has been a positive choice in operations.
“As the world continues to recover, several international trips have been suspended through 2022 and 2023, depending on restrictions. As we look toward 2022, we are confident in the return of JHA operations to full capacity. The demand to travel is strong; however, many are waiting until the time is appropriate,” she explains.
George Jacobs, CEO of Windy City Limousine & Bus in Chicago, Ill., said the pandemic caused business to screech to a halt. In a normal April, his company would bring in $2.5 million in business; in April 2020, the total came to $50,000. The company didn’t close its doors but did need to lay off hundreds of people and cut the salaries of those that remained.
“We have all these vehicles we need to pay insurance for, and we weren’t generating any income. It was ugly and disastrous for us. However, we pivoted and learned a lot from it,” Jacobs says.
The company found new sources of revenue it never dreamed of before. It started doing work for the government through the Department of Defense, which it had never applied for pre-pandemic.
Now, Windy City is up to 45% of normal business. In August, it did well over half since it had transportation for two large events. Nevertheless, without Paycheck Protection Program (PPP) money and the bank allowing the business to defer, there would have been no hope. The good news is there's sunshine on the horizon.
“We're hiring people back to the departments where sales are growing every day. People are definitely moving and doing things again. We had Lollapalooza here not too long ago and we got swamped with work,” he explains.
Weathering the Storm
Hall stated her organization maintained all full-time team members, while reducing some of their work loads and allowing them to work from home throughout the pandemic. Unnecessary positions were reduced or rolled into other positions.
Conserving cash became the next priority. Understanding it would likely be another calendar year before funds started to generate due to the operational cycle of seasonal business meant the quickest return to full operations would be March of 2021.
“Financial knowledge of every aspect of the business became crucial to survive the pandemic,” she says. It also enabled Hall to become reacquainted with the industry.
“We became part of groups we had not considered before, and leaned on other organizations for their knowledge, operations, and experiences. We took part in every industry call available to ensure knowledge of current happenings, financial assistance, or group events taking place,” she says.
For Windy City, the company didn't insure buses they knew weren't going to be used. Some were sold off. Other expenses were cut in the office such as cable, coffee, and shredding. Jacobs said his landlord needed space to store items, so he turned back over one-sixth of the shop for a $4,000 rent credit. For those he had to let go, he paid out vacation time all at once to ensure they had something to help them get by. Those that remained were cross-trained to take on any business that was thrown their way.
“Through it all, we learned how to be a more efficient, profitable company. We've raised prices and have ceased giving discounts to those who couldn’t prove they’d bring us more business,” he explains.
Jacobs also called the GM of a local company that had gone out of business due to the pandemic and requested his customer list.
With some extra time on her hands, Grzywacz was able to post more regularly on social media for her company. She ensured monthly newsletters still went out, so clients remained informed of what was happening regarding the changes the company was making.
On top of this, her company cut every cost possible. She got rid of the fax line because the company barely used it and every penny counted. It was necessary to reduce staff to stay afloat.
“We called those left the ‘designated survivors.’ People with a CDL took priority. Our safety coordinator became our dispatcher and drove, too. My husband is doing the books, dispatching, and cleaning buses,” she says.
The PPP and COVID-19 Economic Injury Disaster Loan also helped. The company has recently been approved for Coronavirus Economic Relief for Transportation act funds. She also renegotiated contracts with clients and was able to extend agreements.
“Normally, we would have the option to renew for three years. Well, we got an extra year on that, because basically, we lost a year. And then at the renewal time we were able to change our rates. We were also able to negotiate vendor contracts as well,” she explains.
The pandemic opened the eyes of many business owners. Jacobs learned he was overstaffed.
“We used to throw bodies at problems. Now, we find the best possible people to do the job. We no longer accept second best. You have to be top of your class to work here,” he states.
He also discovered by negotiating with vendors that the company was overpaying for some things.
“We learned how to operate better, smarter, and more economically. Raising our rates helped reduce the number of trips that just weren’t worth it. You don't have to take everybody that wants a giant discount. When you have a great business, you’re entitled to be properly compensated for it,” he says.
Grzywacz learned the relationships you have with elected officials are vital.
“The fact we had participated in fly-ins in the past was beneficial. A lot of times they want to talk to people that can vote for them, so they stay within the boundaries of their district. But when I was able to show them pictures of when they met us in person on Capitol Hill, that opened things up, and then it became more a conversation about the entire state of Iowa; while my house may be in a different district, I have employees and clients in all districts, so I affect the entire state,” she says.
Communication with team members and guests/passengers was crucial, according to Hall. By keeping everyone updated with honest reports of the travel environment, many clients came to appreciate and trust the travel experience promised would be delivered since the level of customer service was so significant during the suspension of operations.
The JHA team’s commitment to continue doing their jobs to the best of their ability was also vital.
“From the first day of the pandemic, the management team remained committed to consistent meetings, updates, and feedback to ensure they believed the organization would survive and come out thriving by the end of it all. They understood the primary focus of decisions were guest safety and, more importantly, our team members’ safety and health,” Hall states.
Naturally, there were times when unpopular and challenging decisions needed to be made to protect clients, team members, and the company’s reputation.
“It is important to remember decisions need to be made that will ensure long-term operations. There rarely is a textbook for disruptions, especially in a world dealing with a pandemic, so it’s important to do what’s best for your own organization, not just follow what others are doing,” Hall explains.
Hall believes travel is something everyone enjoys, and the term "travel revenge" is a true statement.
“People want to travel, and it is good for our health, economy, and overall happiness to share the world,” she states. “I believe there are certain aspects of the industry that will come back quicker. Independent travel has already seen an increase in interest, clearly displayed through the shortage of rental cars, rental RVs, and hotel rooms. Most individuals are taking the opportunity to explore domestic locations instead of travel internationally or long-haul.”
It appears 2022 will be a recovery year for many businesses. However, Hall thinks it will still take two to three years for a full recovery of many group organizations due to people’s comfort level of being around other travelers.
Grzywacz hopes to see operations going back to normal starting in 2023.
“We're at a third in 2021. So hopefully we'll be up 50% by 2022, and then by the end of ‘22 just keep picking it up. If this DELTA variant takes off and is devastating, then we're going to start all over again,” she explains.
Her advice for those who are still trying to make things work is don’t give up, keep your head down, and push forward. “When the pandemic started, we calculated we were going to run out of money on Valentine's Day 2020. Well, here we are, and that possibility of closure keeps getting pushed further down the road. We just have to stay strong.”
Before the emergence of the COVID-19 DELTA variant, Jacobs believed that after Labor Day 2021 everything would start to level back out over the course of a few months.
“The colleges have come back, which is a big part of our business. Now we're waiting for the conventions. However, now, on the west coast, in particular, we're seeing cancellations. That has us a little worried; you don't want to see that again, but you also want everybody to be safe,” he states. “If we go through another round of this, then we go through another round. You just have to do what you can. We will make it through.”
See all comments