04 Jun 2020

“IT IS GOOD TO SEE SOME LIGHT AT THE END OF THE TUNNEL”

Since the Covid-19 crisis has spread around the world and is still active in various stages, a number of countries is trying to resume business, not as usual but at a limited pace. In this fourth Busworld Academy Webinar six speakers from several branches in the coach and bus industry gave their opinion about how to restart business. Mr. Marc Hofmann, CEO CheckMyBus (Germany) said during this webinar that he sees a positive development in demand for bus and coach trips.

The first three Busworld webinars were about how to survive the Covid-19 crisis and this one, the fourth was looking ahead about how the industry can get back to normal operation after the Covid-19 crisis, as Jan Deman, director of Busworld Academy explained in his webinar opening words.

CheckMyBus is a global meta-search-engine for bus trips and is available in 18 countries and offers over 5 million weekly bus departures. Since the start of the Covid-19 crisis for the first time Hofmann sees a positive trend developing. “It is good to see some light at the end of the tunnel.” In his presentation he showed a graph about how demand in several countries is coming back where the Covid-19 crisis is fading. Since mid April demand rose for instance in Italy with 118%, in Portugal with 132%, in Germany 74%. Also the transactions, ticket sales, is increasing. “There is a strong correlation between growing demand and the decrease of the Covid-19 crisis, but the same correlation applies to countries where the Covid-19 crisis is still strong. Divided into age the data shows that also the elderly people are not staying away despite they belong to the risk-group.” Hofmann concludes from this that there is not a major fear to get back on the road again.

Social distancing

A question which is rather prominent is whether the bus-business will be a profitable business again. Looking at the Covid-19 restrictions with social distancing, this might be difficult. Hofmann sees a trend turning away from social distancing to wearing masks. “When this is taken into account, capacity can go back to 100 per cent, a scenario in which bus-business can become profitable again although there will be additional costs such as entry-control and measures to protect the driver.” He raises the problems with metro's regarding social distancing and the number of people travelling on it. Hofmann says that here in lies a possibility for the bus and coach sector. “Seating and boarding in a bus or coach is much easier to control compared to other means of public transport. The opportunity lies in an add-on system to support metro systems when they can not use full capacity. Business models that might arise in the next months. But these are just predictions, forecasts about what the future might bring based on indicators.”

One of the reason he gives for this is that probably the packed terminals as we know them are becoming history. “People are not feeling very secure any more. There is a high interest of getting rid of ticketsales at packed counters in terminals. Because we are getting much more used to do things online this will have an impact on the user preferences. It also will have impact on the requirements for online ticketing by buscompanies, which in many countries is still very low.”

Starting up again

Hofmann addresses the issue of starting up the business again and warns how to go about this. There is no ideal situation, he believes, but it can be become more data driven. “The cost of a ramp up can be very high, especially when you put up the full network, but putting up a small part of it can also be not ideal. There will be a lot of data driven forecasting in setting up business based on demand in a smart way, a lot of requirements in doing user acquisition very smartly and dynamic pricing will become important because users might expect higher prices but can also fluctuate on each route. Reacting to this will become a key to success for especially for intercity-operators.”

Data driven forecasting is only possible with a good digital environment. Hofmann says investing in digitization is needed. “But because of the Covid-19 crisis the pockets are not as deep as before. Marketing can cost a lot especially when it is not performance driven. This will be a challenge for the bus and coach companies. But I think it is worth it because companies who can overcome these challenges will have a lot of opportunities when coming out of this crisis. They will be much stronger.”

Closer to home

He believes that people will go on vacation but stay much closer to home, as he calls it “on bus distance”. “People will travel much more in their own country or cross-border. It will take away people from flying and entering the coach. So it can be a positive outcome of the crisis. On the other hand people will have less money but in the mid term bus and coach can be winners also because the mega-trend which is still there, the shift from private mobility to shared mobility. This was because of ecology reasons but now also because of economics. This trend will remain and bus and coach will also be the winner.”

 

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