Mintel predicts demise of family-run coach operators

(24 February 2005)

SMALL family-run coach companies are likely to disappear as the industry’s giants embark on a strategy of vertical integration, according to new research.

The Coaching Holidays report by market research company Mintel has predicted the coaching sector will dramatically reduce in the future with “small family businesses falling by the wayside”.

It follows the recent announcement of a merger between coach operators Wallace Arnold and Shearings, still to be approved by the Office of Fair Trading. The new company will carry one million passengers annually.

Mintel experts believe larger coach companies could purchase hotels and niche transport firms to increase their position in the market. It said operators need to target specific sectors of the market – such as luxury or budget tours – to remain competitive.

More worrying for coach firms, the report predicts it will be difficult for operators to expand their customer base. Its poll found only 15% of holidaymakers who have not been on a coach holiday would consider going on one.

Sales through travel agents are also set to decline with more consumers booking direct, according to Mintel. However, Internet bookings only make up a maximum 5% of coach bookings. Despite this, the future for the coach market is not all bad news, with growth predicted for this year. The total number of coach holidays predicted for 2005 stands at 8.2 million – 5.9 million in the UK and 2.3 million abroad. This compares to 7.9 million last year – 5.8 million in the UK and 2.1 million abroad.

Mintel described the predicted rise as a “tentative comeback” for the sector.

Destinations likely to see growth in this market include Eastern Europe. “Eastern European destinations such as the Czech Republic, Hungary, Poland and Slovakia offer new experiences and a sense of adventure as well as low prices,” said the report.

The Mintel report questioned the trade as well as consumers to gauge the future of coaching holidays.