Rates for coach hire must increase regardless of resistance from customers if the industry is to successfully negotiate rising costs and pressures in other areas, an operator in Scotland has said.
The small business, which is based within 50 miles of Edinburgh, has seen modest signs that some private hire rates in the coach sector are beginning to strengthen as demand returns. However, a Director reports that such a shift is not universal and that there is still evidence of sub-par sums being quoted.
“We must not spurn the opportunity that is currently present to dump the impression of coaching being a low-price industry,” they say. “There is a degree of reluctance to accept an increase among some customers, but I have explained to those that have raised questions that we are under severe cost pressures and that our business has lost £2.7m of revenue over the past two years. We cannot operate at lower tariffs.”
A further policy introduced by the operator concerned is that hirers are not afforded credit. Instead, payment is required on or before the day of departure.
Fuel price is a primary concern for the business. The Director reports that its last diesel delivery was charged at 116p per litre but that a consignment arriving this week will be at 124p per litre. Such an increase has been flagged with a local transport authority (LTA) regarding home-to-school contract payments, but it is unwilling to increase the rates paid. The LTA had previously offered bi-weekly settlements, which the operator says would be “a help”, but they are yet to commence.
Also aired by the operator in Scotland are concerns over the impact of war in Ukraine on incoming tourism. Revenue from such visitors forms a significant part of its business, and while visitors from many nations are unlikely to be affected, the Director is concerned that travellers from the United States may take a conservative approach.
Meanwhile, the coach company proprietor who contributes a monthly column to routeone says that their business has reacted to cost increases by quoting appropriately for new work. Some jobs attract a three-figure premium over what they would have earned pre-pandemic. Drivers have received a significant pay rise and work has returned strongly. In particular, all weekend hires “must be priced right for us to consider them.”
If you are a coach operator, how are rates moving in your area? Email routeone to have your say.
