Coach USA

The last year has seen Coach USA deliver growth in services, revenues and profitability, Ruari McCallion learns from CEO Dale Moser, as it aims to usher in a new age of bus travelA year ago, Business Excellence remarked that Dale Moser, CEO of Coach USA, was delighted that revenues were down on a six-year period. The reason? The strategic decision to focus on profitable operations. The business had, in his words, been ÔÇ£right-sizedÔÇØ for the market and wasnÔÇÖt trying to squeeze more out of market segments that had long since lost their juiciness. Coach has two objectives: to provide better service to existing customers, and to target new customers that havenÔÇÖt, until now, been bus travelers. One brand in particular has vindicated the strategy in a quite spectacular manner.ÔÇ£WeÔÇÖve seen┬á 200 percent growth on Megabus.com. People really have embraced the concept of its low-cost/high-value product and service,ÔÇØ Moser says. This is a remarkable picture for a scheduled bus operation, which is more often associated with poor quality, lack of reliability and travel between places youÔÇÖd rather not goÔÇöseedy, dank and dirty bus stations. Megabus makes things very simple. On the Chicago-to-Detroit route, for example, passengers can embark on South Canal Street, between Van Buren and West Jackson Boulevard, close to Union Station, and get off close to the Opera House or the public library in Detroit. And even more attractive, customers donÔÇÖt have to stand in line to buy their tickets; they can be purchased on the Internet, days, weeks or months ahead. They get a guaranteed seatÔÇöthereÔÇÖs no ÔÇ£Sorry, that bus is full. Sit on the bench for a few hours until the next bus runsÔÇØ; if your selected service is fully booked, then you know and can select another.ÔÇ£Customers like the concept of knowing they have a guaranteed seat,ÔÇØ says Moser. Which is nice, but Megabus goes a step further; passengers may not realize it at the time they book, but there might actually be two coaches leaving at the same timeÔÇöno one gets left behind. ÔÇ£On leisure travel days, we typically find that volumes get very high and we can sell more than one bus. We have a system that lets us see the demand well in advance, and that allows us to make the decision about whether to put on additional service. Alternatively, we donÔÇÖt take additional bookings and let the passenger select an alternate timeÔÇöwhich may be on another day altogether. Our customers have a genuine choice.ÔÇØ Megabus.com operates in a similar way to no-frills airlines; the further in advance you book, the less the ticket costs. Coupled with CoachÔÇÖs investment in modern, well-equipped vehicles, bus travel becomes a real alternative to the car, the train or even the airplane. ÔÇ£We offer all brand-new motor coaches, as well as brand-new touring double-decker buses, with amenities that make them very attractive,ÔÇØ he continues. ÔÇ£Passengers have free Wi-Fi, free video, reading lamps and reclining seats. With our highly visible, city-center locations, weÔÇÖre attracting a completely new demographic to bus travel. With high gas prices and the costs, restrictions and inconvenience of other kinds of travel including air, weÔÇÖre finding people are leaving their $45,000 SUVs at home. But we can only do that if we have the latest technology, all the conveniences our customers would expect and a range of added-value products and services at no extra cost.ÔÇØ It isnÔÇÖt hard to see why Megabus.com is proving hard to resist and is attracting new customers. For example, it started operating in the Northeast and into Canada from its hub in New York City only in June 2008. Passengers can travel from New York to Philadelphia and back for just $26.ÔÇ£We can get you from city to city in the same time you could drive, but we deal with gas, tolls and parking,ÔÇØ says Moser. ÔÇ£WeÔÇÖre helping people stretch their discretionary dollars. These are all things that continue to generate business; we find that 97 percent of people who have used us will use us again, and 99 percent say they will tell a friend about Megabus.com. ThatÔÇÖs a breakthroughÔÇöcustomers are inclined to tell people they know that they have used a bus service and would recommend it. Our intent has been to revitalize and rejuvenate coach travel, to recover a choice that had been lost.ÔÇØThe regeneration of coach travel doesnÔÇÖt come cheap, nor does it always work out the first time. Coach USA has invested over $80 million to meet the surging demand; it has acquired 25 new buses but expects to increase its fleet by 120 vehicles, which will be deployed in the northern Midwest, where it serves 18 cities, and in the Northeast, where it runs to the northeastern US and Toronto. The Southwest service, for which it had high hopes, closed around the same time the Northeast opened. It may go backÔÇöCoach USA has been receiving calls requesting itÔÇöbut for the moment, California seems to be too wedded to the car for even the undoubted attractions of luxury coach travel to make an impact. While Megabus.com may have the fastest growth, it is still a relatively small part of CoachÔÇÖs operations. It carries around 400,000 commuter passengers each day in and out of Manhattan from New Jersey and New York and operates scheduled commuter services in Chicago, Milwaukee and other cities. It operates regular shuttle runs to airports in Chicago and Newark, New Jersey. Over 800 of the familiar yellow school buses, primarily in Wisconsin, are operated by Coach. And the English-style open-topped double-decker touring buses in New York and Chicago are likely to be Coach operations.ÔÇ£WeÔÇÖre delighted to have carried more than 1.8 million customers on Megabus in just two years, and weÔÇÖre continuing to grow,ÔÇØ Moser concludes. ÔÇ£With our investments in service, quality and convenience, weÔÇÖre opening a new age for the coach.ÔÇØ┬á