While U.S. motorcoach operators are starting to roll again after more than a year of inactivity, their counterparts in Canada are still stuck in park.
The U.S.-Canada border has been closed to non-essential traffic since March 2020, when the COVID-19 pandemic was spreading in both countries, and the Canadian government has yet to announce a concrete reopening plan.
That has left Canadian motorcoach operators wondering if the 2021 tourism season will be as big a bust as the 2020 season.
“My feeling is that 2021 could be as bad as or worse than 2020,” said Mike Cassidy, owner of Coach Atlantic Maritime Bus in the Maritime region of Eastern Canada, consisting of the provinces of New Brunswick, Nova Scotia and Prince Edward Island. “That means we would have two back-to-back years of little or no revenue.”
Cassidy said the family-owned company experienced a $33 million decline in gross revenue in 2021, and could see a similar decline this year if tourism doesn’t resume soon. The peak tourism season runs from mid-May until early November, with a large amount of business coming from cruise ship passengers and multiday tours.
No plan for reopening Canada
But with no border-reopening plan from the government, it is difficult to plan ahead for when tourists might be able to travel to Canada or when Canadians can take motorcoach trips to the United States.
“There is very little charter business, no cruise ships, no multiday tours,” Cassidy said. “It could be too late in the year to salvage tourism. You can’t turn the season on in the middle of it. People are not going to book trips to Canada with no plan to reopen in sight. We could be beyond the point of planning for 2021, so we are all looking at 2022.”
The Canadian travel industry, including the country’s largest airlines, has been lobbying the government to come up with a clear plan to reopen travel and the border. But Canadian Transport Minister Omar Alghabra said in late May that it was too early to commit to a date for reopening.
Prime Minister Justin Trudeau has suggested that Canada would have to achieve a 75% vaccination rate for the border to be reopened to non-essential travel. After a slow start in getting vaccinations to its citizens, Canada has seen the rate increase in recent weeks while the rate of infections has slowed, leading to cautious optimism that the country is heading toward reopening. More than half of eligible Canadians had received at least one dose as of late May.
Hoping for pent-up demand
“Vaccinations are the solution to getting us back on the road,” said Larry Hundt, owner of Great Canadian Holidays & Coaches in Kitchener, Ontario, and a member of the UMA board of directors representing Canada.
Hundt said operators are hoping that business will pick up some by late summer and fall, especially if schools are back in session and sports resume. “We’re hoping there is pent-up demand,” he said. “The question is, are we going to see it in the fall or not until spring?”
The fallout from the pandemic has forced some operators out of business, while others have had to downsize and sell off facilities, Hundt said. After nearly a century serving the Canadian marketplace, Greyhound Canada shut down May 13, permanently cutting all bus routes across the country.
A decline in passengers, hastened by COVID-19 travel restrictions and a deregulated marketplace, proved insurmountable for the troubled carrier. The bus company had struggled for years with declining ridership and increasing competition.
Lobbying for government aid
The motorcoach industry, led by Motor Coach Canada, has been trying to convince the federal government to provide aid specifically to operators. However, so far, it has offered only subsidized loans, wage subsidies and other help to all eligible businesses and nonprofits.
“Operators already are burdened by debt. The last thing they need is more debt,” Hundt said.
Vince Accardi, President of Motor Coach Canada and the Ontario Motor Coach Association, said the groups have been talking with the federal government about providing some form of targeted assistance to help operators maintain liquidity.
“We are still in conversations with them,” Accardi said. “We’re hopeful.”
In the middle of all the COVID-19 confusion, the Canadian motorcoach industry has been deregulating, province by province, resulting in a patchwork of regulated and unregulated areas.
“Deregulation will, in time, spawn more operators and more business,” Hundt said. “Ultimately, it will be a good thing. But now is not the time to throw more chaos into the industry.”
‘Patience is wearing thin’
John Wilson, President and CEO of Wilson’s Group of Companies in Victoria, British Columbia, said he is frustrated with the way the Canadian government has handled the pandemic. “The late response by the government has been atrocious,” Wilson said. “We’ve been patient with the government, but our patience is wearing thin.”
He said his company now has 40 employees, down from 225 before the pandemic. He has managed to keep most of the maintenance staff by securing outside work. But drivers are on hiatus, and he is concerned that many won’t come back. “The average age of our drivers is 54, and retirement is looking good right now for some of them,” he said.
Many former employees have found public-sector jobs, which are plentiful in Victoria, the provincial capital, Wilson said, adding that when business begins picking up, finding workers could be challenging.
“It’s going to be, ‘Great, we’re opening,’ but then you look around and you have no staff,” he said. “They don’t want to come back. It’s too chaotic. So we are going to have to be selective about the business we take.”
Cruise ship exemption
One issue that concerns Wilson is a bill passed by the U.S. Congress and signed into law by President Joe Biden in May that exempts cruise ships from the Passenger Vessel Services Act, which requires foreign-owned ships to visit at least one foreign port when traveling between states.
Under the act, foreign-flagged cruise ships traveling from Washington state to Alaska are required to stop in British Columbia, which has resulted in “a huge amount of business” for motorcoach operators there, Wilson said.
But because Canada has banned cruise ships from its ports until at least February 2022, major cruise lines had canceled their summer Alaska voyages, effectively killing the Alaskan summer cruise season, an important source of the state’s tourism dollars. Alaska’s congressional delegation responded by introducing the Alaska Tourism Restoration Act, which allows cruise ships to sail directly to Alaska without having to visit Canada.
The waiver is set to expire when Canada lifts its ban on cruise ships, but Wilson is concerned that it could be made permanent. “This will be devastating to us, even more so if it continues after the pandemic,” he said.
Still, Wilson and other Canadian operators are confident that business eventually will return and the industry could emerge from the pandemic shutdown even stronger.
“Most everything has been affected by the pandemic,” he said. “It has been raw and emotional. But I think it is going to come back, and we are going to see our industry work together more closely than ever.”
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