Bus Charter Service, Except Local

SIC 4142

Industry report:

This category covers establishments engaged primarily in furnishing bus charter service, except local, where such operations are principally outside a single municipality, outside one group of contiguous municipalities, and outside a single municipality and its suburban areas.

Industry Snapshot

According to the American Bus Association (ABA), 96 percent of bus companies provided charter service in the late 2000s and early 2010s, and charter service accounted for 46.4 percent of all bus miles in 2008--more than any other sector of the bus service industry. The Motorcoach Census 2009 reported an industry-wide fleet of 35,217, a five percent decrease from the previous year. Other figures from the ABA showed that annual sales of bus charter services had reached $1.0 billion.

Organization and Structure

According to Dun & Bradstreet's (D&B) Industry Reports, 1,729 establishments provided bus charter service (except local) in the United States in 2009. Most operations were small, with almost 79 percent running fewer than 10 buses, according to ABA, and 76 percent with fewer than 50 employees, according to D&B.

Charter bus service ranked first in terms of vehicle miles traveled. The industry was capital-intensive, as the average cost of a 40-foot motorcoach was about $450,000 in the late 2000s. The industry spent $978 million on new motorcoaches in 2008. Most charter bus companies charged customers--largely private groups paying for one-time trips--either by the mile or by the hour. The average per-mile rate in 2001 was $2.51, which increased in conjunction with the cost of fuel in the late 2000s.

Background and Development

In the 1990s, the charter bus industry looked for growth opportunities based on the growing population of affluent and active senior citizens. To accommodate a more comfort-conscious ridership, charter buses increasingly incorporated ergonomic seat designs, user-friendly lavatories, and kitchen galleys for refreshments.

In order to bring more business to the industry, marketing efforts also became more targeted. Specific interests were targeted in an effort to bring new travelers to charter buses. For example, Motor Coach Industries and the ABA joined resources in 2003 to fund a commercial promoting motorcoach tourism during the 2003 Super Bowl.

In the 2000s, insurance, salary, and marketing costs went up, taking away from already slim profits. In addition to concerns about increasing costs coupled with decreasing revenue, charter bus companies continued to be concerned with the challenge of attracting willing and able drivers, and companies put more marketing effort into targeting the growing numbers of travelers. Travel to Washington, D.C., improved after the security concerns following 9/11 lightened. In 2003, the Transportation Security Administration granted the industry $20 million for motorcoach security measures.

Current Conditions

According to the ABA, the late 2000s were trying for the charter bus industry, due to the economic recession, but by 2010, the demand for bus service was on the rise. ABA attributed the growth to such factors as environmental concerns, frustration with auto traffic jams and airline services, and the ease and comfort of "creature-comfort-laden" modern motorcoach travel. Charter service was also up, as reported by U.S. operators, even though the market for sightseeing and leisure travel had declined somewhat. The ABA expected increased activity once the economy recovered, partly due to the likelihood that Americans would, at least immediately following the recession, favor lower-cost travel and because bus travel continued to be a "green" way to go; buses achieved 206.6 passenger miles per gallon of fuel in 2010. In addition, all EPA-compliant motorcoaches manufactured in 2010 and after were equipped with new technology designed to reduce carbon monoxide and other pollutants.

Industry Leaders

One of the industry leaders in 2010 was Greyhound Lines Inc. of Cincinnati, Ohio. Founded in 1913, Greyhound was the only company that provided a regular intercity bus schedule nationwide in 2010. With 11,150 employees, the company's 2,200 buses carried 20 million passengers to 3,800 destinations annually. Annual revenues in the early 2000s were around $1.0 billion.

Coach USA, LLC, of Chicago, Illinois, was another industry leader. Formed as a company in 1995 with the intention of consolidating independent charter bus operators under a single corporation, Coach became an industry sensation after buying a dozen companies that operated more than 1,700 coaches in nine states. By 1998, Coach had spent $500 million in acquisitions. Under a decentralized management strategy, the acquired companies maintained their individual operating practices and identity while turning finance and marketing functions over to Coach. In the late 1990s, Coach operated 52 subsidiaries, 43 of which were motorcoach operations. After achieving annual revenues of around $960 million in the early 2000s, parent company the Stagecoach Group sold some of Coach's assets in order to focus on the northeast and north-central parts of the country. In 2010, Coach operated 20 subsidiaries with a total of 5,000 employees. Its 2,400 vehicles (including buses, trolleys, vans, and mini-buses) offered intercity transportation services, charter services, and sightseeing tours.


According to the Dun & Bradstreet, the charter bus (except local) industry employed 31,100 people in 2010. New York employed the most workers in the industry, with 2,690, followed by Pennsylvania with 2,650; California with 2,550; Massachusetts with 2,080; Texas with 1,720. The average salary for all occupations in the industry was $31,590 a year in 2008, according to the U.S. Census Bureau.

The charter bus industry workforce consisted primarily of owners or managers (in smaller companies, often the same person), dispatchers, maintenance workers, and drivers. The largest number of employees in the industry were drivers. Drivers transporting more than 16 passengers were required to have a commercial driver's license issued by their home state, and drivers conducting interstate travel were required to be at least 21 years of age. Many employers offered training for the requisite written and behind-the-wheel testing.

In most cases, charter bus drivers were assigned to a trip with the group chartering a bus and remained with that group for the duration of the trip; in the case of intercity charters or tours, drivers remained with the group for several days. Drivers often were assigned on a per-trip basis and available work hours varied greatly, with more work available in the summer months and around the winter holidays. Senior drivers were guaranteed more work than new hires, who might be "furloughed" when no work was available.

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