BTN Europe presents an overview of business travel and MICE predictions for this year
Failings in the UK’s rail services have prompted the Williams review, but with £14 billion worth of investment planned, are improvements on the way?
Journalists sometimes look back at past work in search of inspiration, and an article published here exactly 12 months ago compared the rail industry with the White Queen in Lewis Carroll’s Through the Looking Glass, who tells Alice: “The rule is, jam tomorrow and jam yesterday – but never jam today.”
One year on, nothing much has changed for many passengers, with numerous delays not only to trains but to major infrastructure projects, including Crossrail, and plans for new trains. As Josh Collier, head of proposition – rail and ground transportation, Capita Travel and Events, puts it: “We seem unable to keep on schedule with projects, and it’s the same excuse year after year that fares must increase to deliver improvements that don’t seem to come.”
Nobody outside the boardrooms of the privatised train operators would deny that Britain’s railways are in a mess. Even the Department for Transport (DfT) finally got the message last year, ordering a major independent review of the rail industry. All well and good, but neither the GTMC nor the ITM had been approached by the review team.
Raj Sachdave of Black Box Partnerships, a consultant and experienced commentator on rail, says: “This worries me, as it will be yet another consultation in the dark. When will the rail industry learn to engage with experts who understand the future demands of rail?
“I hope the Williams Review will unpick legacy thinking, systems and processes with clear recommendations that are time-bound; offering value for money in both service and price. The whole franchising model needs to evolve, but the rail industry seems to exist in a distant bubble. It needs to innovate in line with how people travel globally.”
Capita’s Collier agrees saying: “The Williams Review appears focused on going back to basics and what passengers are calling out as needing improvement, such as reliability, clear accountability, and good value fares that they can access easily. More competition would help drive down prices.”
The GTMC describes the review as “a step in the right direction”, with chief executive Adrian Parkes adding: “The rail sector has undoubtedly experienced a yearlong PR disaster, yet the commuter and regular business traveller is now having to swallow another 3 per cent price rise with no related benefits.
“This detracts from the positive service delivery of many operators and their investment in new trains, carriages, products and services. What a disappointment for all.
“Rail is always competing with road and too many potential rail users are still opting to use their cars. At a time when we should be focusing on reducing car-related emissions, the perceived poor experience on rail is sending business travellers back to the road.”
Brighter futureHowever, the GTMC still feels that rail has a bright future, and urges the industry to connect with travellers under 35 who are open to switching from car travel in the right circumstances.
Experienced travel manager Will Hasler, who sits on the ITM’s industry affairs committee, will help frame its response to the Williams Review. More competition between train operators – which doesn’t happen with the current franchise model – is one of his key demands.
“If Virgin, for example, is running three trains an hour from London Euston to Birmingham, why not make that two per hour and have another operator for the third?” he asks. “Companies wouldn’t bid so much money for the franchise, but an operator, such as Virgin, could compete alongside Great Western on the London-Bristol route.
“Longer franchises would be a good idea, because if the franchise is up for renewal every few years, it doesn’t encourage train operators to invest. Their profits are wafer-thin, in any case.”
Hasler also called for first class provision to be reduced because with all public servants mandated to travel in standard class, there was no prospect of first class patronage returning to the levels before the financial crisis. But business travellers need a good working environment in standard class.
“LNER is trying to get business travellers to switch from air on the London-Edinburgh route, and when the journey time comes down to four hours it will have a small market to go for,” he says.
“But most businesses won’t ask people to sit for four hours in standard class, and we all know that air fares may be a lot lower than train fares. However, most travellers would prefer the train. Also, why would anyone drive into a major city?”
Competition callMeanwhile, American Express Global Business Travel – now the biggest rail TMC – feels that more competition in the future is needed to reduce the risk of operators with wide-scale geographical reach overstretching themselves. Jason Geall, vice-president and general manager for Northern Europe, says: “The franchise system does generate investment in rail but its flaws have been demonstrated many times, particularly where operators have over-committed on their investment and failed to deliver.
“Reliability is essential – business travellers need assurance they will get to their meeting on time. They need a guaranteed seat and a comfortable working space. Delays, timetable changes, strikes, overcrowding and complex pricing result in people losing confidence.
“Productivity and wellbeing are increasingly seen as KPIs for travel programmes – as is the traveller experience. So a good working and resting environment, including wifi, quality food, power points and seat comfort, are areas to focus on.”
Lance Goodson, managing director of Uniglobe Carter Travel, is a small rail TMC – but he has strong views on the quality of the rail experience.
“On all of my recent intercity rail journeys in first class I have been heavily delayed leading to missed meetings. There were platform changes at the last minute without adequate warning, causing me to miss the train,” he says. “I have also had poor wifi connections, as well as sitting in a filthy environment with no mains power.
“We need to create true competition on the same route and have more high-speed lines,” he adds. “Also I would prefer we have all major infrastructure owned and operated by UK companies, not offshoots of German or French railways.”
Fare simplificationRail booking service Evolvi says it would like the Williams Review to simplify fares, but despite the complexity of the existing system and the annual increases in regulated fares, it is continuing to save customers money.
Andrew Cantrell, Evolvi’s IT director, says: “Much of the debate will inevitably be influenced by the Rail Delivery Group consultation on fares regulation and reform, which has yet to publish its findings. Simplifying the fares infrastructure is fundamental to delivering on any value for money promise.
“In this environment, more corporate travel specialists are turning to online platforms such as EvolviNG and the EvolviWS API, and are succeeding in optimising budgets as a result. Evolvi customers paid an average ticket value that was lower in 2018 than in 2017 – £56.32 compared to £56.83 – despite a 3.4 per cent increase in fares. Transaction volumes were up from 8.6 million in 2017 to 9.4 million in 2018.”
Concerns about cost are being amplified by abolishing the fixed charge for a Ticket on Departure (TOD) picked up from a station ticket machine, in favour of a charge based on the ticket value, with a surcharge on tickets picked up from manned ticket offices. This will save costs for third-party retailers, but could cost businesses more if savings are not passed on.
The Rail Delivery Group, which brings together train operators and Network Rail, says: “Third-party retailers play an important role. At their request, and following an extensive consultation process, the rail industry has agreed to a new system of charges much more reflective of the changing nature of retailing and ticketing. It’s good for third-party retailers and good for passengers.”
The cost of rail could be reduced if businesses claw back the compensation due to them for delays, with new franchise agreements bringing down the threshold for paying compensation to 30 or even 15 minutes’ delay.
Third parties are stepping in to automate the process. Both Travel Compensation Services (TCS) and Railguard are targeting business travellers, with predictions that other parties, currently hawking payment protection insurance claims, will switch focus to rail.
The Business Travel Compensation scheme launched by TCS is taking off because corporates are worried about traveller welfare, it says. Some corporates reclaim the money themselves while others allow employees to keep it, especially when delays occur outside working hours.
“A change of franchise holder could be the turning point, as the new operator has a clean sheet of paper and harsh targets to achieve,” says TCS managing director Sarah Dalby. “Up to 3 per cent of journeys are typically delayed, but by claiming the compensation due we can save a company 4-5 per cent of its total rail travel budget. We are actively working with more TMCs.”
Railguard works exclusively with TMCs, winning a GTMC award for innovation last year. Managing director Matt Freckelton says: “Our average claim value is £44, and we can recoup up to 3 per cent of a company’s rail spend, rising to 7 per cent when all operators move to the 15-minute threshold. We even claimed back 0.6 per cent of a company’s annual spend with compensation arising from one particular incident when people were delayed travelling to their annual conference.
“We estimate that the total delay compensation that could be claimed back is £700 million a year – but in 2017-18 only £81 million was actually paid out, because people didn’t bother to claim.”
With the latest National Rail Passenger Survey revealing that passenger satisfaction has fallen to a ten-year low, there is no end in sight to rail misery. Passengers of all types look to the Williams Review to usher in genuine change and for all of them, improvements cannot come fast enough.
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