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Tours and Charters

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Tours and charters have proved to be one of the more profitable areas of the bus industry, and most of the companies (Greyhound is a notable exception) are rushing into this area. This trend is vastly changing the professional makeup of the industry, shifting the emphasis from operations to sales and marketing. "For the first time," an American Bus Association veteran noted, "companies are going outside the family unit. They are hiring people with hotel sales experience who know how to package and sell tours." Many people are coming into the tour and charter side of the business from travel agencies as well as hotel sales.

The National Motorcoach Marketing Network, born in 1983 from deregulation, epitomizes the new direction in which the industry is heading, and the new emphasis on marketing. A consortium, or marketing alliance, of 30 of some of the largest motorcoach companies, the National Motorcoach Marketing Network represents the largest charter entity in the country. Collectively, its members account for 1,500 coaches covering virtually every state. In 1990, the group tallied 14 million charter and tour customers generating $1.1 billion in tour sales.

The network is able to wage marketing efforts that independent companies cannot afford on their own and, in so doing, has been able to tap into new markets for coaches beyond the main stay senior-citizen market. These markets include military personnel (the network is an official carrier for the Department of Defense and in 1990 carried 22 percent of all military groups) student bands and sports teams (it is the official carrier for National Junior Achievement) festival groups, inbound visitors travel agency generated groups and corporations and associations.

In addition to a national marketing effort, the network is able to offer members access to maintenance centers nationwide and guarantee payment for repairs, as well as access to a one-stop booking center. It publishes an in-bus magazine, Byways, similar to the airlines in-flight magazines.

High-Tech Equipment, Unpretentious People

Some people tend to think of a bus as a rumbling, smoky, dirty vehicle in a dingy terminal in a decrepit inner city. The present reality, however, is vastly different from this worn stereotype.

New, slick, high-tech buses incorporate many of the amenities of airline compartments and go beyond the airlines in terms of wide windows and roomy seats (some buses even have in-bus movies). Tours are being designed to appeal to every interest and degree of travel experience. Those who work on the tour side say they find the bus business as interesting and exciting as any position in tour operations. Innovations in fares, negotiated programs with other travel suppliers, and distribution (computerized reservations and ticketing) are also making the business more interesting as well as profitable.

The motorcoach industry tends to attract people who are "very unpretentious, warm, and friendly," commented one veteran. 'There is comradely people enjoy the business. Some owners think nothing of taking tours out themselves."

The industry also tends to attract individuals who are mechanically oriented, enamored more by the vehicle itself than by the notion of travel (much the same as airline people who are in love with a "silver bird").

Jobs in the motorcoach industry are similar to those in the airlines but have less specialization. Entry-level positions include driving, working as an escort, or dealing in sales and service to customers. Positions in operations include mechanics, maintenance personnel, supervisors, parts/purchasing personnel, drivers, dispatchers, schedulers, and general managers. Drivers are paid an average salary of $23,500. Clerical positions include those involved in payroll and in keeping track of different states' bus regulations. The motorcoach companies also employ tour directors, sales managers, advertising executives, tour planners, and people who prepare company brochures.

One of the special appeals of working in the bus business is that, because the businesses tend to be small (many are family owned and operated), they are more personal. 'Tor somebody who wants to work in the travel industry, the bus business may be one place to fulfill what you want to do," said one veteran. "It may not be as glamorous as the hotels, but is another way to fulfill one's dream."

An Entrepreneurial Business

Except for the largest companies like Greyhound, bus companies tend to be small and entrepreneurial few companies generate more than $20 million in revenues. However, job mobility is limited either because the organization is so small or because top positions are kept within a family. Moreover, opportunities to rise are shifting away from operations people to those in sales and marketing. "As sales experience and marketing become the most important aspect to a company, these people will rise to the top," said a motorcoach executive.

Bus businesses are also finding that they have to diversify. As scheduled service continues to become less of a critical factor, the bus companies are moving into enterprises as feeder service to airports (in place of car rental), package express, commuter services, and, of course, tours and charters. Thus, the industry is still quite entrepreneurial. (You can start a bus company with about $100,000-$50,000 for a bus, the rest for licensing, insurance, ICC authority, advertising, and salaries.)

An Example: Shuttlejack

When Ray Sena graduated from Harvard Business School more than a decade ago with his master's degree, he informed his father, who owned a small bus company, that he wanted to go into his father's business. His father refused. "He didn't send me to Harvard to run his business," Sena said. "He wanted me to have a glamorous job." Undaunted, at age 29, Sena set up his own bus company, Shuttlejack, in Santa Fe, NM, with $200 he borrowed from his wife. He has since become a millionaire and bought out his father's company.

Sena agreed that the bus business lacks glamour. 'It is a low technology industry." What attracted him to it was the vast opportunity the industry presented, but he acknowledged that "things have to be done differently from the past. Up until 1980, about 65 percent of bus transportation was dominated by Greyhound. It was a regulated industry until then. Greyhound was profitable for decades without having to compete. Since deregulation, the market has changed, but [companies like] Greyhound didn't. There is great opportunity for those with a different perspective. [Large companies like Greyhound] are dinosaurs in a dying age."

Shuttlejack offers a mixture of point-to-point, group, and charter services. "Groups and charters is a growth business, though not necessarily profit-making," Sena said. 'It gives good cash flow, but marketing costs are high." The company sells direct and through travel agents.

One way in which Shuttlejack has been innovative is in marketing its tours. "A bus company might want to run a Pueblo Indian tour of the Southwest or a New York City-to-New England fall foliage trip," said Sena. "Usually, they run an ad and take the general public. We would do it differently. We would go to a foundation like the New York City Ballet and offer to do the tour as a fundraiser, giving them 20 percent of the cut, like a travel agent. Then we only have to convince one person to get hundreds of passengers."

In another instance, Sena ran tours to Kansas "when no one else did showing wheat to Japanese farmers, marketing the trip through a Japanese cooperative. There is nothing in Kansas, but they wanted to see agricultural products and equipment." He brought another group from Japan to New Mexico to observe solar energy and nuclear power installations. "The Japanese love seeing Indians, too."

Shuttlejack operates in Albuquerque, Santa Fe, and Dallas, and it is expanding in these cities as well as adding others. The company employs about 100 people. The key job categories include bus drivers, maintenance personnel, mechanics, repairers, bus washers, marketing and sales representatives, managers, and executives.

"Few look for a career in the bus business. Usually, we steal from the hotels this is a similar service. We offer more money. It can pay well." Sena pays his managers $65,000, "a lot for this kind of business."

Shuttlejack does its own tours and employs a tour planner, who had worked for AAA Worldwide and was an amateur historian and expert tour planner.

Sena does not necessarily look for experience when he hires, however. "I have mixed feelings. There is a lot of carryover from the 'dinosaurs." He recalls having hired a 14 year veteran of a major bus company whom he fired after a year. "He had six months of experience after 14 years."

He strives for a mix of experienced people with those who are innovative, creative, energetic, and not blinded by tradition. Among the qualities he looks for in a new hire are a "willingness to learn, to change, to innovate, [to] be creative, to accept responsibility above and beyond what's assigned willingness to experiment willingness to accept criticism when wrong."

"To upgrade the status of the industry," Sena said, "we need people who are more consumer-oriented, who can take a marketing position." For marketers, Sena looks for people who have already worked in a service business, such as McDonald's or a hotel. "Part-time experience while going to school is good."

Like so many of the travel industry segments, this one has its own captivating magic. "Once you get diesel in your blood, you can't get it out," said Sena. "People tend to stay in the business. There is a clubby atmosphere."
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