routeone aims to show full scope of industry suffering

Research carried out among business owners, senior officials and directors at UK based coach, bus and minibus operations aims to show the implications of the coronavirus COVID-19 pandemic to the sector.

Between 24 March and 13 May, and 30 June and 2 July, routeone publisher Diversified Communications UK completed two surveys on 563 business owners across the spectrum of British coach, bus and minibus operations to discover the extent of damage the coronavirus COVID-19 pandemic had caused to their businesses.

Zeelo Greys of Ely
Operators from across the coach, bus and minibus sectors all contributed to the research carried out by routeone

The background to the routeone research

As of May, 69 businesses reported they had ceased trading. Those businesses reflected the full spectrum of coach, bus and minibus operators, with the majority having traded over 20 years with a reported turnover of less than £250,000 per annum. At least 12 further businesses had closed as a direct result of the coronavirus COVID-19 after the first survey in May and before the second survey in July.

Most businesses have undertaken operational changes in that time. Primary alterations included provision of personal protective equipment to staff (62%), changed boarding procedures (48%), passenger counting (35%) and seat reservations (21%). Few operators have installed screen guards (15%), new booking systems (8%), or walk-round app checks (7%). While 28% of survey respondents have not implemented any of these operational changes, the majority do have plans in place to enforce social distancing (81%).

Survey results in May indicated that over 7,000 vehicles across coach, bus and minibus sectors had been removed from the road. This follows a self-reported investment into fleet renewal estimated at over £47m since January.

However, the research findings indicate that the vehicle market is not in complete hibernation. 10% of respondents have bought vehicles since the start of the pandemic, with investments totalling approximately £5m. This may be owing to the need for additional vehicles, of which almost 30% of operators reported would be necessary to enforce social distancing. Of those requiring additional vehicles, 60% plan to lease, buy, or borrow to make up the shortfall. Some have reported they would only resort to purchasing should the offer of further subsidised work be assured.

Examining the impact of COVID-19

In the coach and minibus sector, almost 80% of survey respondents reported they had retained 10% or less of their 2020 bookings. This was as late as July and equates to half of all participants reporting a 90% or worse reduction in revenue. 40% of coach and minibus operators were still not in receipt of any government support as of July 2. As such, it is perhaps unsurprising that 44% of respondents indicated they will have to sell assets within the next 12 months.

The drop in revenue has also seemingly had an impact on ambitions towards PSVAR and Euro VI compliance. Fewer than 20% of operators in coach and minibus remain committed, with over 90% regarding it necessary to delay, unimportant, or unachievable altogether. Hopes remain for PSVAR to be deferred indefinitely, while others are reliant on pre-pandemic work levels returning.

Staffing levels are another matter. Throughout the pandemic and in both surveys, almost half of all operators indicated their workforce was temporarily reduced by 90% through furlough. In May, 11% of businesses participating in the research had made or were on the verge of making redundancies. By July, this figure had risen to 59%. At the time of the first survey, 75% of operators did not believe redundancies would be necessary. Just two months later the outlook was more negative, with only 25% of operators believing redundancies will not be necessary. 22% of respondents in the coach and minibus sector have confirmed they are being forced to reduce their workforce by 50% or more.

Survey results in May indicate that over 7,000 vehicles across coach, bus and minibus had been removed from the road.

What does the future hold?

Dates for reopening businesses are varied and in some cases dependent on when confirmed bookings can resume. In coach and minibus, 87% of businesses plan to have reopened by the end of September. The majority have reported plans to return by the end of August and early September. 5% have written off 2020 and do not plan to reopen until April 2021.

Promotion of coronavirus COVID-19 safety measures looks to be an important step in encouraging passengers to coach and minibus. Some businesses have reported they will be taking steps to introduce competitive pricing and discounts, while others plan to maintain pricing.

Optimism for the industry’s recovery to pre-pandemic levels has dropped in the period from May to July. In July, 52% of businesses surveyed indicated they are pessimistic for the 2021 outlook versus 44% in May.

62% of businesses believed private hire workloads would recover within 12 months. By the second survey in July this had dropped to 53%. Nearly 30% of participants believed recovery will take even longer at 18 months – and 5% believed that things will never fully recover for their company.

Day trips and excursions, meanwhile, paint a mixed picture. As of July, 12% of respondents believe it will take until June 2022 for the market to recover, a 5% increase over the first survey. 24% believe it will take until December 2021 for a recovery. The majority of respondents believe recovery lies within 12 months.

School contract work is more positive, with 55% believing business will fully recover in this area within the next three months. However, rail replacement work is the aspect of business that operators think is least likely to recover, with nearly 10% of respondents believing it will not return to pre-pandemic levels at all.

For information regarding survey population, sampling and methodology, contact Group Marketing Manager Christina Glenister at cglenister@divcom.co.uk