ABA Insider Exclusive: 5 Ways To Cut Down Business Expenses in the Motorcoach Industry

ABA Insider Exclusive: 5 Ways To Cut Down Business Expenses in the Motorcoach Industry

By Jannine Krish, Betterez

Robust revenues, skyrocketing profits, exponential growth – exactly the kind of words business owners and dedicated teams in any industry want to hear. Of course, one way to boost margins and grow your bus company is to drive down expenses.

Modern times call for more than simply lowering output though, they call for a re-evaluation of operational processes, and most importantly, alignment with technology. It’s at this point that many businesses cringe and visualize money marching out the door.
Keeping up with changes in technology and the shifting mobility landscape does not have to mean increasing business expenses though. Quite the opposite in fact. It can help improve your business efficiency, reduce expenses and increase turnover.

1. Create a roadmap. As the old saying goes, “If you fail to plan then plan to fail.” Do you have a 1-3 year strategy for your organization? What do you want your operation to look like in 10 years? The most important element to guide your business is its vision. From there, think about the key goals you have that align with this. Your key strategies must measure up to these objectives.

By mapping out your plan, you will better understand where your company is now, where it needs to be, and the path required to get there. Having a clear vision and strategy, keeps the entire company rallying behind the same purpose, and will guide each employee in their decision making.

2. Invest in technology. Technology is driving change in the travel industry. A modern reservations platform can tilt the playing field in your favor, and give your organization an advantage.

It can help grow ridership and revenue, improve the journey for your customers, decrease costs, improve sustainability, and position your organization to succeed in an increasingly competitive ground travel market.

We live in a different era where platform-based bookings are becoming the new normal. All the most recent developments have incorporated technology in some way – be it apps to secure ride-hailing or sharing services, mobile booking platforms, or advanced reservations software.

Ultimately, the benefit is seen by both passenger and business alike when a company invests in the technology driving it. A secure reservations platform is available 24/7 and it satisfies a passenger’s need for speed and convenience, while also offering an operator everything they require on one platform. For example, it can provide innovative scanning technology, dynamic pricing and revenue management, eCommerce solutions that power multiple products and promotions, customer intelligence, better reporting and more.

We are not talking about taking your own DIY approach or turning your business into a software company to develop a reservations system either. That will just shoot up your expenses exponentially. We are referring to investing in a solid piece of technology that will carry your business forward while you focus on what you are good at – operating a bus or coach business.

3. Offer driver incentives. Your drivers are your frontline. They are tremendously influential when it comes to the customer experience with your company. They also have control over a number of expenses related to operating a bus. For example, how they drive affects general wear and tear on it, and their safety record determines repairs and maintenance needed. Similarly, efficient navigation cuts down on driver overtime and increases rider satisfaction and safety. (editor's note: ABA recently partnered with TheAwardZone, who can help you with a driver incentive program. Click here for more information.)

Consider setting up an incentive program which encourages and rewards your drivers when they exceed certain desired standards. For example, you could offer a monetary bonus to drivers who have a zero vehicle damage record over the past year, perfect attendance for the month, or simply did something special to delight a passenger.

Recognize those that are performing exceptionally well and share their stories with the broader team. These types of actions can prove to be very motivating to drivers and demonstrates that exceptional work does not go unnoticed.

4. Keep your eye on fixed and variable costs. It is easy to forget about regulating the fixed costs involved in a business, especially if it has been running for a few years. Many of us operate with a “set it and forget it” attitude. For example, do you have a regular insurance broker or preferred fleet service company who you frequently deal with? You need to regularly ask yourself whether you’re paying a good price for what you’re getting and test it by getting comparative quotes every so often to ensure that their prices remain market-related.

Similarly, monitor your variable costs such as the price of fuel or repairs on maintenance expenses related to your fleet. If you notice that the percentage related to sales is increasing, it could be time to upgrade your fleet and reduce your overheads.
It is important to review the performance of your business against the investment in some of your fixed and variable costs. While some components may be essential, others may not be giving you the value needed to make it worth the spend.
5. Re-Evaluate your fleet. Regularly assessing how your fleet is functioning is key to ensuring that you enjoy optimal efficiency in both ridership and operations. Ideally, you want to identify any weak points in route planning and scheduling which can have a knock on your business’ bottom line.

Profitability comes through organization and consolidation.

When given access to the type of data provided by an efficient online mobile and reservations system, you can assess the performance of each of your transit routes. This includes ridership information related to popular travel times and routes, as well as which lines are costing you money, which are profitable, and which should be promoted.
Given the analyzed data, it will be possible to plan your transit schedule more effectively. Optimal planning can potentially lead to a reduction in the number of buses running a particular route as scheduling is improved, lowering running expenses. 

Similarly, it can increase ridership as routes meet passengers needs better, driving up profits.

You’ve heard it before - work smarter, not harder.
Motorcoach companies need to keep innovating, both within their organization and externally to ensure longevity in the industry. Those that keep the wheel turning to meet the needs of their employees and passengers will surely enjoy a long-term advantage from running a sustainable business.

Jannine Krish, is the marketing director at ABA member Betterez. For more information about how Betterez can help you, email jannine@betterez.com.

About the American Bus Association

The American Bus Association (ABA) is the trade organization of the intercity bus industry, with more than 1,000 motorcoach and tour company members in the United States and Canada. Its members operate charter, tour, regular route, airport express, special operations and contract services. Another 2,800 members are travel and tourism organizations and suppliers of bus products and services who work in partnership with the North American motorcoach industry.


Melanie Hinton, Vice President, Communications & Marketing, ABA
Office: (202) 218-7220
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