DON'T WAIT FOR CHANGE: GO OUT AND MAKE IT
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by lain Sherriff, MITA
A WELSHMAN EXPANDS BY CONTRACTING
LAST year when speeding across Northern Europe in the trans-continental express I first met T. Hilling Davies. More by chance than design I found myself face to face across the lunch table with this enthusiastic and energetic coach operator from Tredegar, the little mining village at the head of the Welsh valleys.
Of course. I had heard of Hilling Davies many years before, in fact back in 1966 when colleague Derek Moses visited him to learn how the business which he inherited from his father in 1961 was expanding.
I opened the conversation on the question of this expansion because I had read that this young man had increased his fleet from 13 to 54 coaches in five years. It came as something of a surprise when he said: "We are still expanding. business is increasing every week and by next year I shall have cut my fleet in half".
My surprise obviously registered, because I was invited there and then to go along to Tredegar to see this expansion by contraction at first hand.
How can a business expand while the fleet is halved? It depends largely on how one measures expansion. Good businessmen like T. H. Davies use their bank balances as their unit of measurement.
To appreciate the picture fully we must return for a moment to 1966 when R. I. Davies and Son was operating a mixture of services. Works' contracts, miners' contracts, schools services, stage carriage services, domestic tours and a very few continental tours—this was the type of traffic in which the company was involved. In fact, Hilling Davies admits that in these early days he took on every job offered, in the belief that the bigger the fleet he had the more successful would he be considered to be.
Critical examination It was two years ago that he began to change the pattern of things. A critical examination of the revenue from each service revealed the loss makers and he decided immediately that these had to go. Strangely enough the traditional industry of South Wales. coal mining, was eating up the benefits of the profitable services and so, gradually and with regret, Hilling Davies rid himself of his miners' contracts.
He tells me that miners' contracts caused him more trouble than any other section of his business. Constant wrangling with the NCB for better rates, finding drivers who were prepared to start at around 5 am. and finish after 11 pm.. and providing coaches which were acceptable to the miners. These were only some of the factors with which he had to contend.
The principal factor, however, was one of economy. The Coal Board paid him £35 per week for a seven-day week for a coach to transport men to and from the pithead for three shifts each day: that was three return trips. He paid his driver £30 per week. It takes very little calculation to show that such a service can only be a loss maker.
What is more surprising is that it is part of the contract, I understand, that operators are not permitted to pick up another party on completion of a NCB run, until they have reported back to the garage. If, for example, having dropped the miners the driver is then passing a school which is his next lifting point he must run past it to the
garage, and then return to the school. If he short-circuits this operation the Board deducts a mileage allowance from the invoice.
Although Hilling Davies criticizes the Board he accepts the argument that increased transport costs for miners would inevitably mean increased coal prices. This in turn would mean less demand for coal which would resultin pit closures and consequently loss of traffic to him. He views pit closures in South Wales as inevitable in the next decade and while, to some, South Wales without its coalfields is unthinkable, to him it is a stark reality. "So. the traffic will go anyway," he says.
Difficult to accept What he finds most difficult to accept is that no sooner has he given up an uneconomic service than another operator in the area steps in to snap up the business.
When Hilling Davies. was shedding his uneconomic services he looked for a field where expansion would be guaranteed. In 196 6 he was involved in foreign tours but felt that very soon the conventional foreign tours market would reach saturation point. He also recognized that the older people from the valleys would welcome the opportunity of visiting countries which until then had been no more than a name on an atlas.
He first devoted his energies to promoting tours for senior citizens (this young man thinks there is something not quite right about the term "old-age pensioner"). During the first year he took 1,000 people over to Ostend; in September 1970—in one month—he took 1,000 people to Ostend. This is some indication of the measure of growth of this particular segment of the tours market. In fact he took his last party of senior citizens for the 1970 season over to Europe on a 10-day tour which started on November 15.
Community characteristics When studying the market Hilling Davies believes that it is essential to examine the characteristics of the community which you are serving; this is well illustrated in the thinking behind his schools' continental tours. He points out that at one time school parties from Wales to the Continent travelled by coach from their school to Cardiff, by rail from Cardiff to Paddington, across London to Victoria by coach, then by rail to Dover, where they walked onto the ferry to be con veyed to Ostend.
This may do elsewhere in Britain, but not Wales. "Welsh families are very close-knit units." he told me, "and the parents worried a great deal when their children left the valley and they were out of touch until they reached Ostend". He points out that they are very much happier now that they know the children will be on the same coach on every leg of the journey and furthermore they are in possession of a route card and can contact the coach, either directly or through Hilling Davies, at most stages of the tour.
These schools educational tours got under way in 1969, when there were 31 tours. In 1970 there were 110 and by October 31, 1970 the company had 90 tours booked for 1971, a sure indication that educational tours are a growing market. In addition to this Hitting Davies has contracts for 80 per cent of all Scottish educational tours to Europe. He "bends over backwards" to ensure that these tours go without a hitch and consequently he has a very good relationship with the local education authority. Unlike many other operators whom I have met he tells me he njoys an economic rate for schools' contract work.
The schools' contract work occupies most of his coaches during term time; they are • used for education tours during the vacations.
A progress chart of R. I. Davies would be heavily marked with change and one of the changes which has to be introduced into next year's educational tours is a three-day trip to Ireland. This has been arranged in conjunction with B and I lines through Swansea and Cork. Children from the Welsh Valleys will visit Ireland for less than 15 inclusive.
By way of contrast to Continental and Irish tours the service which his father started at Merthyr Tydfil is still in operation; a number of the works' contracts have disappeared but a new one has been introduced. He runs three buses each day on a stage carriage service, carrying employees of the Inland Revenue to their office. This very serious and intense young man allowed himself a smile when he said "That is a constant and. I fear, an expanding market".
In addition to schools' trips into Europe, he arranges seasonal runs for the general public; trips to the Dutch tulip fields in May; the Ostend illuminations, rather than the Blackpool illuminations, in September; beer and wine festivals at Innsbruck and the Tyrol in October. As a token of goodwill to England he takes coachloads of Welsh women to London during November and December on specially organized Christmas shopping tours.
Hilling Davies looks for an opportunity, assesses its potential, measures the demand and fills it.
Like all good Welshmen his sporting interest is Rugby Union and he arranges for his fellow enthusiasts to travel by coach to Murrayfield, Twickenham or Colombes Stadium, Paris, when the National team is playing.
Tredegar is a most unlikely place to find such a successful coach operator as Hilling Davies and at first sight it is difficult to see how he can attract and retain the right type of labour force; nevertheless, he does. His drivers are handpicked, well trained for their task, well paid and they enjoy excellent fringe benefits.
For example, on the day I visited the garage one driver who had been on the' sick list reported back and was immediately dispatched in a coach which was going to Austria. He travelled at the company's expense.
While on continental tours, in addition to their normal day off drivers have a free day on a Sunday. On this day they have permission to use the coach to take the passengers on a day tour. The passengers pay the driver for this un-scheduled run, he in -turn pays his employer for the fuel he uses. "This is a nice little bonus for the man," says Hilling Davies. He points out the passengers are unlikely to spend a free day with an unsociable, unhelpful and careless driver, and pay him for it.
Close -knit unit
As he had pointed out earlier, the Welsh family is a close-knit unit and husbands and fathers do not take kindly to being away from home for almost all the summer months, so that when there are empty seats on a continental tour the driver has permission to take his wife and family as guests of the company. He is required to pay only for their accommodation.
In this highly specialized continental tours market Hilling Davies contends that nothing less than 100 per cent service is acceptable. The oldest vehicle in the fleet is a 1968 model and he has a sister company in Ostend, RCT Travel, where two coaches are based against possible emergencies.
In four years he has built up a new business. His income has increased enormously and this he has achieved with half the vehicles which he used in the past. "There is no place for loss leaders in this business." he says, "they are all right for the supermarket: coach operators can only survive if all of their services are running economically."