Patrick Marks has been in the motorcoach industry for nearly 40 years, joining the Wisconsin company started by his father and building it into a popular tour operator with 11 buses and 25 employees.
But it all came to a screeching halt last April, when Marks’ company, Nationwide Travelers, became an early motorcoach industry casualty of the COVID-19 pandemic that would go on to force hundreds of operators out of business during 2020.
“March 15 was our last trip because everybody stopped traveling,” Marks said. “We were a motorcoach tour company, and without people traveling, there was no business. It was such a shock. It seems incomprehensible that a thriving business can just dissipate overnight.”
Better to shut down
While many motorcoach operators were able to hang on for months despite having little business, Marks decided it was better to shut down than to keep spending money without any income.
“How much do you invest in hopes it will come back?” he asked.
The 66-year-old Marks, who ran Nationwide Travelers with his wife and brother, said he sold all but four of the company’s motorcoaches “for 50 cents on the dollar.” He used the money to repay more than 700 customers for deposits they had paid on future trips that never materialized. He said he hopes to sell the remaining motorcoaches when the industry picks up again.
482 motorcoach operators
Nationwide Travelers was far from the only operator to go out of business last year. According to the Federal Motor Carrier Safety Administration, 482 motorcoach operators lost their operating authority — either voluntarily or involuntarily — in 2020, up from 96 in 2019. Around 100 to 120 motorcoach companies lose their operating authority in a typical year.
FMCSA spokesman Duane DeBruyne said most of the operating authority revocations last year — 280 — were involuntary. Another 176 revocations were voluntary, while 26 operators filed MCS-150 “out of business” forms with FMCSA.
DeBruyne said involuntary revocations of operating authority are mostly due to a lapse in insurance. “This lapse can be either intentional or unintentional, the latter being the most frequent,” he said. “Thus, it would be hard to discern if an involuntary revocation was the result of a carrier going out of business.”
Lapsed motorcoach insurance
An unintentional lapse in insurance could be the result of a policy cancellation based on an operator’s accident record or the failure to keep up with premium payments. It appears that there were many operators who were unable to make insurance payments because they had little or no income after the pandemic-caused travel slump.
Several operators apparently intentionally dropped their insurance coverage on buses they were forced to park or sell after business dried up last spring and they decided to close their companies.
It is unclear whether the closures will continue at a similar rate this year, now that at least some federal government stimulus money has been earmarked for the passenger travel industry. But the amount of assistance is far less than was originally proposed in the Coronavirus Economic Relief for Transportation Services (CERTS) Act — $2 billion, down from $10 billion.
Marks said that if federal funding had been approved early in the pandemic, he might have been able to survive. “But it’s too late for that,” he said. “The federal money was needed much earlier. Some of these operators who have a lot of debt to banks, I don’t know what they are going to do.”
‘A great year’
Before the industry shut down in March, business was strong, Marks said. “It was looking like a great year, then everything stopped. It’s unbelievable the way it all happened, how a virus can destroy an industry.”
Making matters worse, he said, was the fact that Nationwide Travelers was on the verge of being sold after two years on the market. “My brother, who is 64, had been wanting to retire, so we put the business up for sale,” Marks said. “In February, somebody was very interested, and we were about to sit at the table to draw up the paperwork.”
Then the pandemic hit and the potential buyer backed out. Nationwide closed a little more than a month later.
“Now that I’m out, I don’t know if I’d want to get back into it,” Marks said of the motorcoach industry. “It’s kind of sad, because I really enjoyed it.”
This story is part of an ongoing series about how the COVID-19 pandemic impacted operators, drivers, mechanics, dispatchers, vendors, and local communities. If you have a story to share, send us an email at firstname.lastname@example.org.