UK Coach Crisis

The Coach Travel Industry is currently sitting under a dark cloud. Operators of coaches are waiting to see whether they will be washed away in the storm that follows.

 This weekend should have been the light at the end of the tunnel after a bleak winter. Thousands of students should have been travelling to Alpine regions on ski trips, partying in Croatia and Rimini and sports tours would be arriving in the Netherlands, Germany and further afield. Social Media would be lit up with posts from coach drivers complaining about the mess the students have made on the long journeys, that their accommodation was not suitable and operators would be moaning about the rates they receive from tour operators. Once these trips had returned a season of touring would lie ahead with groups from all corners of the world about to flood the U.K, bringing with them much needed revenue. Instead we have the worrying thought of millions of pounds worth of touring coaches being parked up, having their very expensive wheels polished for the foreseeable future with no end in sight. I bet most would rather be moaning about messy students and low rates!

 Company owners are frantically looking through their debtors and creditors lists, looking to put asset finance on payment holidays and they wait anxiously to see if they will be able to claim government support and if they will be able to stay afloat long enough for this lifeline to reach them.

 The industry has ground to a halt in a very short space of time. Most are now looking to effectively ‘Moth Ball’ their businesses until things return to normal. Although, I think ‘normal’ will not be the same after this. Government support has allowed operators to furlough their drivers, workshop and office staff. Those with understanding finance companies have been offered payment holidays on asset finance and mortgages. They have received grants from local authorities, who are also in most cases, looking to pay them a proportion of their revenue for home to school contracts, whether the routes operate or not. In most cases, the immediate ‘panic’ is now whether they can get enough cash together to stay in business until the government assistance arrives and to pay their standing costs long enough for the storm to blow over or in some cases whether they have the appetite for it anymore.

 There will be casualties, a lot of them. However, the one thing that companies in a position to survive have is time. Time to take stock, time to make plans, time to look at why companies are in this extremely fragile position in only a matter of days without revenue.

 Now is the time for the industry to stand together and make it worthwhile for all involved in the future. This time should be spent putting together viable, profitable business plans for the future to protect our industry. It’s an opportunity to stop being slaves to local authorities, tour operators and others. It’s a time to justify the costs involved with new vehicle regulations to adhere to clean air zones and public service vehicle accessibility regulations.

 For decades I have read and listened to disgruntled coach operators complaining about tour operator rates being so low. From a tour operators point of view they have to be competitive. Their product price has to be in line with costs. The tour operator has to be charging a like for like price to the consumer otherwise they would lose out to their competitors. They get away with paying low rates because the Coach Industry agrees to it. It’s not the tour operators fault, it’s the coach industry’s fault. If BP charged 50 pence a litre for diesel and Shell charged ￡1 a litre. Where would you buy your diesel from? BP may be making a loss but Shell would have to compete or sell no diesel. Who’s fault would it be that the fuel companies were losing money? In the example above Its BP of course, not the coach industry for buying the cheaper fuel. Obviously, the fuel companies are not that self destructive, but we can’t say the same for our own industry.

 Already, I am getting emails from tour operators asking for lower rates to make their product more attractive to consumers when this pandemic has run its course. Please remember when replying to these requests that you have seen your industry brought to its knees in a matter of days through a lack of cash, and if one agrees to a suicidal rate it sets a president for the rest of the industry. I’m all for competition but I’m more for responsibility and sustainability. As an industry we should be saying we need the price to be ‘X, Y or Z’ and we can’t contract at the rates you suggest. Especially with the Chinese market, and high volume USA market it has always been the other way around. That policy needs to change, and we can only do that by standing together. The, 'If I say no to the rate, then someone else will take the work' stance needs to be exiled to history.

 While it’s a devastating time for the industry with no end in sight. I urge the businesses that can survive to take this time to make sure they are operating responsibly when restrictions are lifted. There are so many passionate, hardworking, unflappable characters in this industry. Take them qualities, forget about the feuds and spats with competitors and rebuild an industry that is a better place to work for everyone. This will pass. Many operators will be completing their financial year ends next week. Have a look at the margins, prepare next years forecast and make sure the hard work is going to be worthwhile. Put self kudos to one side, it’s lovely to have an expensive fleet of shiny coaches, but remember they depreciate fast, the payments are high, and you need to generate a profit and the rates tour operators pay need to reflect this. We have a once in a lifetime opportunity to do this. Tour operators will be preparing new products, new brochures etc. Make sure the transport element of their package is priced in a way it is possible to make a profit. Renegotiate contracts to protect your business and your future. When things start to brighten up, don’t ‘panic sell’ and accept the lower rates. They are unsustainable, and chasing quick cash will do more harm than good in the long run.

I realise that everyone is still very worried, but please try and do the right thing. Look after your staff so that they want to come back to the industry, make it a more attractive industry, make sure you have proper financial planning and contingency plans. Remember that the lucrative summer season we are used to will not arrive this year. These are most certainly unprecedented times but you have the rare opportunity to rebuild a better industry and prepare to hit the ground running when the sunshine starts to disperse the clouds.