Coach operators should view consolidation as an opportunity for growth and improvement and to elevate standards and competitiveness.
That is the view of Don’t Travel Empty Director James Howells, who underscored the benefits of embracing consolidation at the UKCOA conference on 4 March in a session titled Consolidation within the Coach Industry, Friend or Foe?
Drawing on his fifteen years in the industry, Mr Howells notes an acceleration of change in recent years, surpassing the pace of the previous decade and a half.
Looking at whether it is beneficial or detrimental to the sector, Mr Howells sees benefits for those considering selling or liquidating a business amid what are favourable market conditions. He outlined options such as selling to local competitors or private equity firms, or considering management buyouts.
For those who choose to remain in the industry, he warns that consolidation will likely drive standards higher, toughening trading conditions as competition finds itself with new sources of funding.
He evidences that view with the emergence of competitors such as Zeelo, and the acquisition of several established players by larger groups. There is also increasing involvement of local government in the industry, with at least one large coach operator understood to be finalising its sale to a local authority.
But Mr Howells is optimistic about the industry’s future as a result, citing locally targeted growth opportunities driven by initiatives from both national and local government. Those include the role of coaches in facilitating workforce mobility, and potential for growth in contract-based services.
“If you want to sell your business, maybe this is the best time you could ever have to be a coach operator,” he says.
“If you look at consolidation… it is not all doom and gloom. Those with a good business [or] that have a niche, or that are very good at what they do and are looking to the future – there is a place for them. If industries are good at what they do and deliver, and continually invest for the future, I can assure them that there will always be a place for them.”
