USA – “Coming out of the pandemic, the industry remains very cautious, but it is recovering,” stated Pete Pantuso, CEO of the American Bus Association (ABA) based in Washington, DC in an interview with Truck & Bus Builder at Busworld North America held alongside ABA’s Marketplace event in Detroit during February.

To put the motorcoach marketplace today into perspective, if we look back ten to 15 years, the industry was on a steady upward growth trend. People were returning to the motorcoach, different services were being offered, attracting new and different customers, whether that was in the commuter, charter or, in the point to point / city to city market segment.

“We’re seeing much more demand for coaches”

Then in 2020, obviously, the market dropped significantly! So, now, there is, certainly, a lot of caution in terms of buying as we’re coming out of it {the pandemic}, but there is a lot of interest. Companies that might not have bought coaches for three years are now able to start upgrading and getting back to a normal rotation in terms of their fleet and the age of their fleet. So, we're seeing much more demand coming into the market; it is not where it was prior to the pandemic, but it is moving in the right direction.

Pantuso continued,

Prior to the pandemic, perhaps the average vehicle replacement cycle was between seven and ten years, depending on the size of the company. Smaller businesses tended to hold onto the coaches for significantly longer, especially as it is these smaller operators that are the buyers of second hand coaches at seven years and older. Holding on the coach longer obviously means more maintenance and so it's a balance, a trade off. But we are seeing the average age cycle move up to nine and ten years due to the pandemic. Plus, a new coach in the US market is upwards of 550,000 to 600,000 US dollars, so it's a significant investment.

Less supply, more demand, price and value go up!

 The challenge in the past was that the motorcoach was undervalued by the customer, not the operator, but by the end customer. In the last year specifically, we've seen a lot fewer companies {operators} in the industry, some 40% less than existed in 2019. We’re now seeing suddenly a tremendous take off in people wanting to travel again with that supply and demand curve creating classic opportunity. Less supply, more demand, price and value go up. And so we’re seeing operators now getting a more realistic number in terms of day rate or mileage rate for coach, which is helping to make the industry a lot healthier and is going to allow them (the operators) to invest back into the business better than they did before!

Pantuso said the US market can be divided into three segments; the commuter, city to city and charter.

The commuter market, i.e. taking people to work, is slow to come back. Why? People are still working from home or are hybrid working and not going into work 5 days a week, like they did before. Then you have the point to point / city to city segment, which is probably 70 to 80% of where it was in 2019. It is continuing to come back and the airlines are certainly helping that, as they can't deliver the service or can't meet the demand, certainly in that 200 to 300 mile range. That range is kind of what we would call the sweet spot for the coach, I mean, that's where we excel and are able to serve that customer better than the airlines and the private car.  We always say coach is where .., ‘it's too far to drive or too short to fly!’”

7,300 or 25% more coach drivers needed

The third segment is the charter tour segment. “This is where the demand is fully exceeding supply right now! This is due to a lot of pent up demand and the reduction in the number of companies. There won’t be a tour operator out there that won’t tell you they have more business than they can handle. This is partly because the demand is so high and partly because of the lack of drivers.

Pantuso said that a report by the ABA Foundation, due out a week after the show to evaluate the driver shortage in the motorcoach industry, saw that there's about 30,000 motorcoach drivers and there's demand for another 7,300! “To put this into context that’s almost another 25% of available drivers needed, right now.” There are two key challenges, Pantuso stated - driver scheduling, especially in the charter segment, where fewer and fewer drivers want to be away nights at a time, and the other is driver licence processing. “There is a backlog of two to three months with the state licencing authorities for the CDL (commercial driver’s licence) with a ‘P’ (passenger) endorsement, once a driver becomes qualified!”

USA coach business recovering – market to reach between 1,500-2000 units

Five years’ ago in round numbers, new coach registrations for the US market was 3,330 units. The market almost dropped to nothing in 2020. Pantuso said,

There was inventory but nobody was buying it, and then obviously in 2021, the numbers were almost negligible. In 2022 the market started coming back with between 700 and 800 units registered. The number this year is expected to be well over a 1,000 probably closer to 1,500 maybe even higher at 2,000 units. Multiple manufacturers have told me that they are already sold out for 2023 and that they're selling 2024, that they’ve got that much demand.

Coach amongst the under 30 generation is a growth market

Asked if there is an opportunity for real growth in the US coach market, Pantuso said:

Absolutely yes! While many Americans still love their cars, we've seen certainly a new and growing market for coaches amongst the younger generation. There are a lot of younger people (20-35 year olds), who have moved into cities and don’t have driver licences, that use public transport in towns and coaches for city to city trips such as Washington DC to New York City. ….. Now we've got a whole generation of people in their 20s and 30s who are very accustomed to riding the coach. If they live in a city environment, they probably prefer that to other modes going from point to point. We are  seeing all kinds of new services pop up, especially in different urban areas.

In Washington, DC, for example, there is a company called the Jet that's running service to New York in seats that are made by Bose {edit. this business was sold in 2017 to Clear Motion} that have motion cancelling technology in them, so you don't feel a bump when you're riding. Another company, also out of Washington that goes to Nashville, TN, offers an overnight sleeper coach with 36 seats, 18 sets of doubles and the doubles fold down into a bed, making a bed for the traveller. “All over the country we’re seeing different types of services, attracting different types of customers.”

Alternative Fuels & Power – what’s the future?

Asked about what’s the future in terms of future fuels and power for coach, Pantuso made the following comments:

Looking at the different segments of the bus industry, there is lot of investment in school bus to go to electric. A tremendous amount of money coming out of Congress to help make that happen and drive that, but again it's a much more expensive technology and when local communities / cities run out of that federal money, how much are they really going to be able to invest thereafter, is a big question? But I think you'll see a continuation of that Federal funding. The same key points in the transit bus segment, there's been a tremendous amount of money going into transit over the last couple of years and in part to support what they weren't getting from the fare box during Covid, but also in part to build out new technology in electric buses or hydrogen. So, you're going to continue to see that market grow and expand, but again, when they run out of money, what happens next?

The coach market is a lot different, obviously because the coach can be doing a very short trip today, and tomorrow, it might go from here (Detroit) to Niagara Falls. Its fine coming back to the garage tonight to charge it as an electric bus or to be able to refill the hydrogen, but if you're going from here to Niagara Falls where do you charge it on the way because, there are no commercial charging stations! There are lots for cars, but everyone that I've seen, if you're going to pull a bus in there you have to block every car charger just to charge the bus and it'll take hours and hours to do it!”

Governments need to provide infrastructure as an absolute minimum

Pantuso said that if full electric coach or HFC coach is being demanded by the state and federal governments, then ABA needs to be lobbying them both for an infrastructure for it as an absolute minimum.

Coach is public transportation, just like the city bus, but it’s just not subsidized like the city bus. But if they want us to move to a different technology, to a different fuel source, then they've got to be able to provide some kind of incentive for the industry to do that!

American Bus Association

ABA is the largest American bus trade association (primarily motor coach) in North America - membership extends to companies in the USA, Canada and Mexico. It represents about 800 motorcoach companies, which accounts for 60 to 70% of all the coaches on the road. ABA brings its members together and provides a range of services for its the members, services that can't necessarily do by themselves.

ABA was created in 1926, almost 100 years ago by a group of motorcoach companies that at that time felt they needed to have a voice to represent themselves, to have a say on motorcoach regulation and on the business of motorcoach operations. Fast forward 97 years and today, this is a big part of what ABA does, said Pantuso.

We have a very extensive programme with the association that lobbies ‘Capitol Hill’ that works with government regulators to make sure that our voice is heard. We also provide media assistance to companies, and we provide media messaging out to the popular media and the trade media. Again, this involves, talking about the industry, what it does, the goal that it plays, how important it is in terms of providing services in North America specifically. We also have education and training programmes for members, and we have an extensive safety and maintenance programme. In fact, at Busworld North America exhibition, here we have some 200 members meeting on these important topics of maintenance and safety.