DePaul’s “Routes to Recovery: 2022 Outlook for the Intercity Bus Industry” report describes a sector battered by the pandemic. - FlixBus

DePaul’s “Routes to Recovery: 2022 Outlook for the Intercity Bus Industry” report describes a sector battered by the pandemic.

FlixBus

America’s intercity bus industry, long known for Greyhound, Megabus, and Trailways, is gearing up for what is expected to be a strong summer. A DePaul University study predicts traffic will reach three-quarters of pre-pandemic levels during the warmer months and rise to more than 80% of pre-pandemic levels next year. Its forecasts for intercity bus travel are markedly better than those generally made for public transit, for which ridership is more profoundly affected by changes in downtown work trips spurred by work-from-home lifestyles, but somewhat less optimistic than that for Amtrak predicted by McKinsey & Co.

“The recent ticketing buildup on routes, particularly those that don’t rely on commuter traffic, indicates clearly that intercity bus travel is on the mend,” noted Joseph Schwieterman, a DePaul professor who co-wrote the study. Schwieterman attributes much of the growth to the tendency for bus trips to involve personal rather than business travel.

DePaul’s “Routes to Recovery: 2022 Outlook for the Intercity Bus Industry” report describes a sector battered by the pandemic. BoltBus permanently suspended operations in September, and several smaller lines have disappeared. On many routes, buses run less frequently than before the pandemic, sometimes only three or four days a week. But a gradual recovery has pushed traffic up to 60% to  70% of the pre-pandemic range on some routes, the authors note, and there is much pent-up demand that will allow for further gains this spring and summer.

FlixMobility’s acquisition of Greyhound last November could bring big changes to bus travel, due in part to the buyer’s ready access to venture capital. Even so, the authors expect FlixBus and Greyhound to remain separate entities for the foreseeable future, despite now having a common owner. “Each will likely maintain separate ticketing platforms and interline partners,” noted Schwieterman, who expects FlixBus “to take steps to leverage Greyhound’s vast network to give customers enhanced schedule options.” This could entail coordinated schedules to shorten connecting times and reaccommodate passengers who miss their connections. One possibility, he believes, is that some buses will make two downtown stops — one at the Greyhound station and the other at the FlixBus stop — to facilitate transfers.

More difficult to predict is the direction of FlixBus’s capital investment — whether it uses such spending to bolster Greyhound’s fleet and facilities or directs it elsewhere. This answer may hinge on how contractual arrangements for operating and maintaining FlixBus’s services play out. Unlike Greyhound, FlixBus relies almost entirely on contractors to operate its service.

The report noted that a broad restructuring of the industry and new technological adoptions, which were already gathering momentum before the pandemic, are in the offing because of two years of public health distress and consequent restrictions. Independent carriers are selling tickets through booking aggregator websites, such as wanderu.com, which has long been an industry leader, as well as lesser-known platforms like gotobus.com and ilikebus.com, who specialize in bus travel. These sites allow consumers to compare their options much like on Expedia. “Bus lines can no longer hang back and rely on word-of-mouth to reach customers — they want to be seen when customers surf the web,” said Allison Woodward, a co-author of the study. FlixBus and Megabus are also getting in on the act, too, adding smaller bus lines to flixbus.com and megabus.com, respectively.

The demise of BoltBus and the withdrawal of Megabus from the West Coast, meanwhile, are creating opportunities for other carriers. So is rapid population growth in the SunBelt and Mountain states. Last year, Salt Lake Express expanded service from its hub in Salt Lake City, RedCoach launched premium service in Texas, and Tufesa and other lines catering to Spanish-speaking populations grew rapidly in Phoenix and the Southwest. In other cases, expansion has been held back by driver and mechanic shortages.

“Unlike public transit services, which in most cities closely resemble pre-pandemic offerings, and to some extent, airlines as well, the intercity bus industry is now dramatically different than it was at start of 2020,” said Abby Mader, who did the cartography for the DePaul report.

On Thursday, April 14, the Chaddick Institute will host a free one-hour webinar on the study at noon CT. The register or reach the research team, email chaddick@depaul.edu

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