Five trends to watch in intercity bus travel

Scheduled bus service is taking some surprising turns, according to the Chaddick Institute at DePaul University. The institute produces a widely read Outlook for the Intercity Bus Industry report authored annually by professor Joe Schwieterman and Brian Antolin. Its latest analysis shows that:

1. Germany-based Flixbus has launched U.S. service, focusing on the Southwest. After rolling out Los Angeles – Las Vegas and Los Angeles – Phoenix service last month, it is adding weekend Phoenix – Las Vegas, Los Angeles – San Diego, and San Diego – Las Vegas service. Flixbus contracts with Arrow Stage Lines, American Explorer Motorcoach, Gray Line Arizona, Pacific Coachways, Transportation Charter Services, and USA Coach to manage bus operations while internally handling technology, ticketing, and marketing. Planning for additional expansion is underway.

2. The sharp rise in gas prices over the past few months bodes well for bus travel, which is less affected by fuel costs than car or plane travel. Oil prices hit $70 in late May, up from $55 in January and just $48 in June 2017. A sharp rise in air fares should enhance demand at long-haul operators such as Greyhound, Jefferson Lines, and Trailways lines.

3. The Northeast remains the country’s hottest intercity bus market. On the heels of extensive service expansion last year, new niche routes are popping up. In recent months, BoltBus launched Philadelphia – Washington, DC service via Baltimore, added New Haven, CT to its New York – Boston route and made DuPont Circle in the nation’s capital a stop. Greyhound launched Albany – Philadelphia service via the George Washington Bridge station in Upper Manhattan. Go Buses added Mounty Holly, NJ to its New York – Washington, route.

OurBus recorded the largest expansion with new weekend New York – Syracuse service, Philadelphia – Washington service via Columbia MD, and White Plains – Boston trips. The company also now serves Newark, NJ to the nation’s capital and launched in Florida with Miami – Tampa service. More expansion, possibly in Chicago and California, is expected later this year.

4. Federal support for rural intercity bus service is growing. The Federal Transit Administration’s “5311” program, used for subsidies for service to places with populations under 50,000, are set to grow to $591 million in fiscal year 2019, up from $577 in the current year. State governments are rolling out new services with these funds and other public dollars. Colorado’s Bustang program, for example, has been expanded to include trips from Pueblo to both Alamosa and Lamar.

5. First Group reported reduced earning for Greyhound during the 2018 fiscal year, which ended in March. Low fuel prices for most of the year kept fares low, limiting revenue growth to 1.7% although Greyhound Express “like for like” revenues were 7.7%. Results for Stagecoach’s Megabus are due out soon.

More information about recent trends are in the Chaddick’s Outlook for the Intercity Bus Industry reports, available for free download, by emailing, or calling 312.362.5731.