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Thursday, Aug. 21, 2008

Travelers turning to highway buses to save on fares

Staff writer

At a time when food prices are on the rise and income levels remain flat, it's not easy finding the money for shinkansen tickets, which cost ¥13,240 per person for a nonreserved seat from Tokyo to Osaka.

News photo
Transport trend: People line up to board a highway bus at a terminal outside JR Tokyo Station on Aug. 13. KANAKO TAKAHARA PHOTO

But there is another form of public transport that costs only a third of that amount and is rapidly gaining in popularity — highway buses. And with gasoline prices also rapidly rising, those who normally drive are also choosing to use the buses, further boosting their popularity.

On one humid August night, the highway bus terminal at Tokyo Station was full of young backpackers, families and businesspeople waiting for buses bound for major cities.

"It's cheap," said Fujie Saito, who was heading to Morioka, Iwate Prefecture, with her 11-year-old granddaughter.

She used to take the shinkansen until a few years ago but then switched to buses because the seats are always reserved, unlike on the shinkansen, on which it is difficult to make reservations during holiday season.

"Gasoline prices are rising so I don't want to drive my car either," said Saito, a resident of Chiba Prefecture.

Bus operator Willer Travel Inc., a travel agency offering highway bus services from Tokyo to Osaka, offers tickets starting at ¥4,000 depending on the type of seat and date of travel, and said more people in their 30s and 40s are reserving tickets compared with last year.

"This may indicate that families that used to drive are switching to buses," said Aiko Ike, a spokeswoman for Willer Travel. Group traveler reservations are increasing, while those of single travelers are declining, she said.

Willer Travel offers highway bus transportation to and from major cities, including Tokyo, Osaka, Nagoya, Sendai and Fukuoka.

Prices for highway buses dropped after the Land, Infrastructure, Transport and Tourism Ministry eased a regulation on operators in 2000, allowing tour agencies to enter the business.

The intensified competition led to a price war that resulted in fares falling to around ¥4,000 for a Tokyo-Osaka trip.

Bus operators claim the cheap prices are the result of their cost-cutting efforts and careful planning to increase profitability.

"Whether we can offer a cheap price depends on how many customers we can get on each bus," said Shigeo Kamada, a spokesman for Bell Planning Co., operator of JJ Liner. "By offering low prices, we attract more customers to the point where we can make a profit."

Kamada, however, admitted the business remains risky for Bell Planning, which runs highway buses between Tokyo and Osaka at ¥3,900.

If the bus operator can't fill more than 70 percent of its seats, it can't make a profit, Kamada said.

"By taking a risk, we gain a profit," he added.

Kamada said 90 percent of the seats for August, the busiest season of the year because of the Bon holiday, were booked.

Low-price highway bus operators don't target the high-end customers who can afford the shinkansen.

"Our target is customers who do not normally ride on highway buses," Ike of Willer Travel said. "We are creating a new market by encouraging people who had been hesitant because of the expensive shinkansen fees, to travel more."

For instance, Ike said, a customer living in Nagoya may feel like visiting the Midtown shopping complex in Tokyo if the trip is affordable. A bus ticket costs roughly the same as a couple of movie tickets.

The strategy seems to be working.

"I came to Tokyo from Osaka to go to a concert with my daughter," said a woman in her 40s who was waiting for the bus home. "Because concert tickets are expensive I want to save money by taking the bus."

The woman, who asked not to be named, said she comes to Tokyo three or four times a year using highway buses.

But tour buses operated by travel agencies are threatening existing bus companies that run fixed highway routes.

Fixed-route buses are obliged to stop at designated terminals and run a fixed number of buses whatever the number of customers. They are not allowed to change routes, prices or the number of buses unless approved by the transport ministry.

Tour buses are chartered buses that can be flexibly changed based on the level of reservations.

"If we prepared five buses but only 80 people made reservations, we still have to run five buses," said Hitoshi Yamakawa, a spokesman at West JR Bus Co., which operates highway buses on fixed routes between Tokyo and Osaka. "But tour buses can cancel three buses if they want and change prices at their own discretion."

JR Bus has petitioned the district transport bureau to change regulations, but so far without success.

"We are forced to compete in the same market under a different set of rules," he said.

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The Japan Times

Article 1 of 4 in Business news


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