Operators make amenities, great service pay

It's no secret that new coaches, especially the nicest ones, cost a lot of money. And with passenger groups often shopping hard for the best rates, there can be a lot of pressure on an operator to keep his or her prices as low as possible — even when the ultimate cost turns out to be high. So how does an operator tread the fine line between offering great quality and charging enough to make it all worthwhile? We talked to a few operators who offer their experience.

Make an acquisition plan.
Starline Luxury Coaches, Seattle, only buys new coaches when it has enough business to support them. President and CEO Gladys Gillis says that the company grew its fleet to 19 coaches by systematically growing its business and farming out excess bookings to other operators. When she and COO John Burnett would see that they were turning away enough business to support a new coach, they would buy one.

Starline also has a rigorous formula for pricing its product. "We build a pro forma for each bus every year," says Gillis. "It shows each coach's monthly revenue objective and what we expect our expenses to be. We expect every bus to pay a certain amount every year." To build that list, the company also takes into account such things as its monthly payment  for the coach, how many days a week it can reasonably expect the coach to run, and what it wants its profit margin to be.

The profit margin is especially important, says Gillis, a number to be ignored only at an operator's peril when someone comes looking for a hefty discount. The same goes for pricing trips based on perceived norms as opposed to one's own expenses. "If you base your business on what other businesses are charging, and other businesses are going out of business, slowly but surely, that's the ship you've jumped on," says Gillis.

"A lot of people shop on price," says Burnett. "A lot of our job is helping a customer understand what they're getting for the price. Are you riding on a 20-year-old bus where the maintenance program isn't good, or where the air conditioning doesn't work and you're going to Spokane where it's 100 degrees? With us, they can know that they'll get on a nice, modern, air-conditioned bus where everything works, and they can pop in a DVD about their destination on their way there."

Such careful planning has paid off in Starline's relatively short history. The ten-year-old company recently made the list of Washington State's 100 fastest-growing businesses, quite an accomplishment in an area known for its Internet startups and coffee entrepreneurs.

Make luxury more luxurious.
With only four coaches, all of them MCIs and two of them E4500s with "all the bells and whistles," Rustad Tours, Korkoven, Minnesota, has the time to offer highly personalized service. And part of that service is making sure customers have plenty of room. Chuck Rustad, who owns the business with his wife, Jean, never puts more than 42 people aboard a 55-seat coach. He's also custom-configured coaches with an extra step to make it easier for elderly and less mobile passengers to board. It may seem like a small detail, but it's characteristic of the care the Rustads put into their business.

"It's the way I like to run," says Chuck Rustad. "I like a little more upscale coach. I like a little extra legroom; I like coffeeholders and magazine racks at every seat, and one or two card tables in back for every tour." Rustad also keeps bottled water aboard for anyone who wants it, and his coaches are appealing inside and out. "You can charge more for nicer equipment," says Rustad. "Our customers know they're going to get a nice, clean, comfortable coach with a little extra legroom."

Earl Reed, general manager at Royal Coach Tours, San Jose, California, also offers a coach with a little something extra. The older MCI, known within his company as the Land Cruiser, is outfitted with sofas and other creature comforts. It's primarily used for special-occasion parties such as proms and weddings. But, says Reed, not bachelor parties. "We can't charge enough for bachelor parties," jokes Reed. Royal's fleet also includes more conventional upscale MCI coaches. "We're not cheap by any means," says Reed. "People just beg for a certain quality of driver, a certain quality of coach."

Like Gillis at Starline, Reed also emphasizes the importance of maintaining firm pricing. "We don't change according to the weather," says Reed. "Which means when you deal with us, you pay top dollar. Once customers ride with us, they understand."

Don't forget the add-ons.
Starline, which prices all of its bookings based on the luxury and quality of its services, does upcharge for certain amenities, like creating a wireless Internet hotspot onboard. Many operators also charge for things such as refreshments, and some charge more for certain coaches. Other amenities that might merit special charges are galleys and satellite television.

And, of course, some operators build their entire operations around luxury service, such as LimoLiner in Massachusetts. But one thing all operators we talked to agree on is that pricing your services — whatever they are — correctly is key.

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