Economy showing signs of acceleration

The GDP is up. So are sales of durable goods, and so was the March payroll. And according to some operators, things are looking up in the tour and charter business as well.

"We're seeing some positive things," says Luke Busskohl, director of marketing for Arrow Stage Lines, Omaha, Nebraska. "We saw business pick up for March. Our Blackhill Stage Lines scheduled runs are very profitable, plus we have an ultra-luxury MCI LX coach in our Allied Tours and Travel division. That coach is booked non-stop, and people are paying a premium for it."

Busskohl says the LX is booked solidly from March through October, with many dates sold out. Tours include Yellowstone National Park, Mackinac Island, New England, New Orleans and other spots near and far. It proves the resilience at the high end of the market, at least, and Busskohl says Arrow's J4500s are doing solid business as well.

Premium equipment may part of the equation, but it's not the only factor. Arrow has also refocused its attention on selling. They've restructured their sales department, focusing on selling value and customer service. "People still want to travel, but they want to know what they're getting for their money," says Busskohl. "We're getting back in front of our customers, reintroducing ourselves to ones who haven't traveled in a while. It's more face-to-face."

Says Busskohl, "As to the economy, I don't think we're there yet, but we're going in the right direction."

Spring break break

Dan Kobussen, marketing and office manager of Kobussen Bus, Wisconsin, says business has been hopping lately with spring breakers — so much so that the company has leased extra equipment to keep up with demand. The Olympics gave the company a business boost, and Kobussen expects baseball season will be busy as well.

Not that the company has been untouched by the economy. Price competition is tighter, says Kobussen, and buying habits have changed. "One thing we've noticed is that people don't book as far ahead as they used to," says Kobussen. "I don't think it's our industry, necessarily. It's technology. People can put together a trip in a week and go."

Talking up business

Larry Landreth, president of Landreth Bus Service, Tennessee, says bookings are good for spring and summer. The company recently replaced one coach with a new MCI model and added yet another. Like Kobussen, he reports that price competition is tighter--business volume has risen more than profits over the past year. "The industry here in the Knoxville area is very competitive. We have some competition that will cut the bottom plum out. I don't try to meet every price — we all have a limit as to what we can do. We're just working harder."

Still, he says, his company is getting as many inquiries as usual, and people are traveling. Schools continue to send their bands and other organizations to competitions and activities — even those for whom money is tight. Landreth also believes that his area of the country hasn't been hit as hard as some others.

Landreth believes that dealing with the recession is partly a matter of attitude. "I think the economy is going to turn around, and we have to have that in our minds. We can't be negative all the time."

So maybe you need a pep talk, too.

  • Brand new business opportunities often arise out of need. Aram Nikitas, MCI sales manager, suggests operators look to all possible avenues of revenue. Creativity can be the key to finding new markets.

  • Consider equipment upgrades. Desirable equipment may make the difference between attracting a discerning clientele and having to compete on price alone. Whether you're buying new coaches or pre-owned ones, consider going beyond the basics.

  • Those who survive challenging times usually come out stronger in the end. Now's a good time to evaluate priorities, cut costs where it makes sense and plan for the future.

  • Sell. If there was ever a time to get aggressive with your sales and marketing, it's now.

The FYI from MCI editorial staff values your feedback. Please e-mail any suggestions, comments, or ideas for future articles to fyi@mcicoach.com.

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