The financial reality of running a coach business in 2026

By Lynn Krige, Chief Financial Officer, The Coach Travel Group

Running a coach business has always come with financial challenges, but there is a lot for operators to think about at the moment.

Fuel is an obvious one. It is a major cost for any operator, and when prices stay high, there is only so much a business can absorb before it starts to affect the bottom line.

Then there is everything else. Labour costs have increased, National Insurance has gone up, and operators are dealing with more legislation and regulation. For businesses working on fixed-price contracts, particularly some local authority contracts, passing those additional costs on isn't always straightforward.

That puts pressure on cash.

At the same time, you can't simply stop spending.

Coaches still need maintaining. Older vehicles eventually need replacing. Operators need to invest in technology and, where possible, start moving towards newer, lower-emission vehicles.

So one of the questions I think about quite a lot is: when is it actually worth investing?

A new coach is a big commitment. There are always other things that a business could spend that money on, so it is important to understand what you are getting back from that investment.

At The Coach Travel Group, we tend to look at capital expenditure in two broad areas: growth and maintenance.

Growth is probably the easier one to understand. If there is a genuine opportunity to win more work or expand the business, investing in additional vehicles can make sense.

Maintenance is a little different.

You are investing because you need to keep the business running properly. You don't want to let the average age of your fleet get too high or end up spending more and more money keeping older vehicles on the road.

It can be tempting to put that investment off when money is tight. Sometimes that is the right decision. But putting something off doesn't necessarily mean you have avoided the cost.

An older vehicle can cost more to maintain, and there is also the risk of reliability becoming an issue.

For an operator, that matters. If a coach doesn't turn up, there is a knock-on effect for everyone. Customers are affected, contracts still need to be delivered, and another vehicle has to be found.

So when we look at buying a coach, it isn't just about the price of the vehicle.

We have to think about what it will cost to run, how reliable it is likely to be, what work it can take on and whether it gives the business an opportunity to grow.

I think the same applies to technology.

There is no shortage of technology available to operators, but I don't think you should invest in something just because everyone else is talking about it.

There needs to be a reason for doing it.

What problem is it solving? What is it going to save? What is it going to improve? And ultimately, is it going to make a difference to the business?

For me, that is what the finance function is there to help with.

It isn't about saying no to spending money. It is about asking whether we are spending it in the right place and whether the business can support that investment.

That becomes even more important when costs are rising.

But there is another side to this, which is where I think being part of a group can really help.

There is an obvious benefit to scale. A larger group can potentially have more purchasing power and access to more resources and expertise.

But having a lot of businesses and vehicles under one umbrella doesn't automatically make you more efficient.

You have to actually make the scale work.

For us, that means looking at where we can work together more effectively, whether that is procurement, sharing expertise or making better use of the assets we already have.

Vehicles are a good example.

If one operator has a particularly busy period and another has some capacity, there may be an opportunity to support each other rather than going outside the group.

That flexibility is valuable.

The same applies to procurement. Buying as a group can give us more leverage, but there is no point having that buying power if we don't use it properly.

Data is helping us too.

We have much more information available across the business now, including through tools such as Power BI. It means we can look at what is happening across the group more easily and get a better understanding of where things are working well and where they aren't.

That helps us make better decisions.

Ultimately, I think the financial challenge for the coach industry is finding the balance.

You can't ignore rising costs. You can't keep putting investment off forever. But you also can't spend money simply because you feel you should be investing.

Operators need to keep their businesses healthy while preparing for what comes next.

That means maintaining fleets properly, investing where there is a clear benefit, looking after cash and making sure the underlying business is profitable.

I think that is particularly important when we talk about the industry's move towards cleaner vehicles and new technology.

We all understand why that investment is needed. The question is how operators are expected to fund it.

Businesses can absorb higher costs for a while, but they can't do that indefinitely. At some point, the cost has to be reflected somewhere, whether that is through investment being delayed, margins being squeezed or prices increasing.

That is why I think there needs to be a realistic conversation around government support and the financial pressures operators are facing.

If we want a modern, reliable and lower-emission coach industry, we need businesses that can afford to get there.

For me, good financial management isn't about spending as little as possible.

It is about knowing when to spend, where to spend it and why.

And when you can combine that with the scale and flexibility of a group, you have more options available to you.

Size on its own doesn't create value. It's what you do with it that matters.