The FMCSA Is Raising the Bar Just as Motorcoach Demand Becomes Harder to Predict
By Danny B.
The motorcoach industry may soon face a major change in how new operators are allowed to enter the business.
The Federal Motor Carrier Safety Administration is moving toward a proposal that would require new motor carriers to pass a proficiency examination before receiving interstate operating authority.
For years, obtaining a USDOT number and Motor Carrier Authority has been largely an administrative process. Applicants certify that they understand federal safety regulations, but their actual compliance knowledge is often examined only after operations begin through the New Entrant Safety Assurance Program.
That could soon change.
At first glance, this may appear to be another compliance story. But it is arriving at a complicated moment for the motorcoach industry—when international tourism is softer, group-travel patterns are shifting, and operators are already competing for fewer predictable passenger movements.
Two Industry Pressures Are Beginning to Collide
The proposed FMCSA examination could make it more difficult to start a new passenger carrier.
At the same time, the demand environment that new and existing operators are entering is becoming less predictable.
International visitation to the United States declined approximately 5.5% in 2025, falling to about 68.3 million visitors. U.S. Travel identified the sharp reduction in Canadian travel as the primary driver of that decline. A return to the 2019 international visitation level is not currently expected until 2029.
Canada has been the clearest warning sign.
Canadian-resident return trips from the United States dropped 25.4% in 2025 compared with 2024. Canadian travel spending in the United States also fell by approximately C$3.3 billion. Although some monthly comparisons improved during spring 2026, Canadian travel remained far below 2024 levels.
The slowdown has not been limited entirely to Canada. Foreign visitation to the United States declined in 2025 even while global tourism continued growing. Reuters reported reduced arrivals and spending from Canada, Mexico, and parts of Europe, showing that the United States lost travel demand while competing destinations continued gaining it.
Travel from the United Kingdom, continental Europe, Mexico, Japan, South Korea, China, India, and other Asian markets should not be treated as one uniform trend. Some markets are beginning to stabilize or are forecast to grow during 2026, while others remain weak. The broader point is that the dependable post-pandemic recovery operators expected has become uneven.
What Tourism Statistics Mean Inside a Motorcoach Company
A decline in international arrivals does not stop at the airport.
It eventually reaches:
Receptive tour operators
Charter bus companies
Casinos and shopping destinations
Hotels and convention centers
Theme parks and attractions
Restaurants serving group tours
Tour guides and destination-management companies
Operators providing airport transfers and multi-day itineraries
A single international tour group may generate several days of motorcoach work.
The coach may transport passengers from the airport to a hotel, operate local sightseeing tours, travel between multiple cities, serve attractions and restaurants, and eventually return the group to the airport.
When one 40- or 50-passenger international group cancels its trip, the industry does not lose one transfer. It can lose several days of vehicle utilization, driver hours, hotel movements, attraction stops, meal transfers, and related tourism spending.
That is why international visitor numbers matter to private operators even when they do not market directly to foreign travelers.
The Industry Is Not Losing Travel—It Is Losing Predictability
The situation is not simply that nobody is traveling.
Worldwide tourism demand remains strong. Travelers are still spending money, taking vacations, attending events, and purchasing experiences. The problem is that a portion of that activity is being redirected away from the United States or toward different types of trips.
Domestic tourism, sports travel, school movements, weddings, casino trips, military transportation, emergency transportation, corporate events, and religious travel may remain strong in individual markets.
The 2026 FIFA World Cup may also produce substantial demand in host cities and transportation corridors. The National Travel and Tourism Office currently forecasts international visitation to rise approximately 3.2% in 2026, supported partly by World Cup travel. However, even that projected growth would leave total visitation well below the level federal forecasters expected only a year earlier.
This creates an unusual operating environment.
Operators may experience strong demand during specific events, weekends, or seasons while still facing weaker weekday utilization and fewer dependable international tour series.
A full calendar for one month does not necessarily mean the overall market has recovered.
Why FMCSA Wants a Proficiency Examination
Under the current system, companies can begin operating after completing registration, insurance, process-agent, and authority requirements, provided no other restriction prevents the authority from becoming active.
The concern is that completing the paperwork does not prove that a new operator understands the rules governing:
Driver qualification files
Hours-of-service compliance
Drug and alcohol testing
Vehicle inspection and maintenance
Accident reporting
Insurance and financial responsibility
Safety-management controls
Recordkeeping requirements
Passenger transportation is not a business where regulatory knowledge can be learned entirely through trial and error.
An operator can purchase a used coach, secure insurance, obtain authority, and begin accepting trips without necessarily understanding the true costs of maintenance, driver compliance, roadside inspections, preventive maintenance, or federal documentation.
FMCSA’s proposal is intended to require applicants to demonstrate that knowledge before they are permitted to operate.
A Higher Barrier During a Softer Market
The combination of tighter entry requirements and less predictable tourism demand could reshape the competitive landscape.
Starting a motorcoach company has always required capital, but the true startup cost extends far beyond purchasing a vehicle.
A new operator must account for:
Commercial insurance
Vehicle refurbishment
Preventive maintenance
Tires and major components
Driver recruiting and training
Electronic logging and compliance systems
Drug and alcohol testing programs
Licensing and registration
Working capital
Seasonal fluctuations in revenue
If international group demand remains soft, new carriers may enter the industry expecting immediate charter revenue that is no longer guaranteed.
A proficiency examination may therefore do more than test regulatory knowledge. It may force entrepreneurs to slow down and understand the business before committing substantial money to equipment.
That is not necessarily a bad thing.
What This Could Mean for Established Operators
Experienced and compliant operators may benefit from a higher standard of entry.
Poorly prepared carriers frequently compete by offering prices that do not fully account for maintenance, insurance, driver wages, compliance, or future repairs. Those prices can temporarily distort a local charter market.
When these companies encounter a major engine failure, insurance increase, regulatory problem, or seasonal revenue shortage, they may be unable to continue operating.
A stronger entry process could reduce the number of companies entering the market without adequate safety knowledge or financial preparation.
However, established operators should not assume that fewer startups will automatically improve business conditions.
The larger threat may be underutilized equipment.
If international tour series remain weak, more operators may compete for domestic charters, school contracts, sports teams, churches, weddings, and casino work. That could place additional pressure on pricing even if the total number of licensed carriers declines.
The World Cup May Create Demand—but Not an Automatic Recovery
The 2026 FIFA World Cup offers the industry an important opportunity.
Host cities will need airport transfers, team and staff transportation, sponsor movements, fan shuttles, hospitality transportation, and regional charter service.
But operators should be cautious about treating one major event as proof that the broader tourism market has fully recovered.
World Cup demand will be concentrated around specific dates, cities, routes, and contractual relationships. Some operators may have exceptional results, while others located outside host markets may see little direct benefit.
There is also a risk that companies will purchase equipment or add drivers based on temporary event demand without securing enough work for the months that follow.
A major event can fill buses.
It cannot, by itself, repair a weak year-round sales strategy.
What Operators Should Do Now
Operators should approach the next several years with more discipline than optimism alone.
First, companies should diversify their customer base. An operator dependent on one international receptive company, one casino, one school district, or one corporate account is exposed to sudden changes in demand.
Second, operators should measure vehicle utilization by customer type. Knowing that a coach operated 180 days last year is not enough. Management should understand how many days came from international tourism, domestic charters, contracts, school work, sports movements, and seasonal events.
Third, operators should avoid expanding solely because a major event temporarily increases demand.
Fourth, companies should review their compliance systems as though they were preparing to take the proposed FMCSA examination themselves.
If management cannot confidently explain its driver-qualification process, maintenance program, hours-of-service controls, drug-testing requirements, and accident procedures, the company has a larger problem than a future exam.
The Bigger Lesson for the Industry
The motorcoach industry is entering a period where owning equipment will not be enough.
Operators will need to understand regulations, tourism flows, customer concentration, utilization, pricing, maintenance costs, and cash flow.
The proposed FMCSA proficiency examination addresses only one part of that equation: whether new operators understand federal safety requirements.
The marketplace will test everything else.
International visitors are still coming to the United States, and major events will continue to create opportunities. But the reliable recovery many companies expected has become slower and more uneven.
The strongest operators will not be the companies with the largest number of buses sitting in the yard.
They will be the companies that know where their passengers are coming from, understand what each coach costs to operate, maintain multiple sources of revenue, and refuse to expand faster than demand can support.
The barrier to entering the motorcoach industry may soon become higher.
Given the current tourism environment, the barrier to surviving in it may already be higher.
Sources
Federal Motor Carrier Safety Administration
National Travel and Tourism Office
U.S. Travel Association
Statistics Canada
International Trade Administration
Reuters
About the Author
Danny B. is the General Manager and CFO of BuyCoachBus, where he specializes in motorcoach acquisitions, fleet management, refurbishment, and industry operations. Through The Motorcoach Insider, he provides practical insight into regulatory changes, tourism demand, fleet economics, maintenance, and the business realities facing private motorcoach operators.
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