Rail focus: The decade of the train

Dave Richardson explores the future of domestic and European rail travel

IMAGINE A TIME when you can travel throughout the UK and Europe on high-speed rail services, bypassing airports and with a booking process as simple as that of the airline sector. Imagine that you can make reservations and get access to wide-ranging information about every aspect of your journey on your mobile device.

Imagine that you do a great business deal, have a bottle of wine over dinner on your way home, and fall asleep when you should be getting off at an intermediate station. Normally you'd feel pretty stupid, but your mobile's alarm will sound just before the stop and rouse you to action.

Utopia? Perhaps, but these developments are either under way or a reality right now. The Teenies, or whatever we're going to call this decade, could well be the new Age of the Train.

Britain

WHEN IS FIRST CLASS not first class? When it's a Scottish Executive package

To quote from the website of East Coast: "Book a standard Scottish Executive Package for £199 for travel between Edinburgh, Dunbar, Motherwell or Glasgow and London, and enjoy a complimentary upgrade to first class in both directions; plus, get a whole host of other great perks. It certainly beats flying!" Scottish Executive costs a lot less than the walk-up Anytime fare in standard class (£271), while the first class Anytime fare is nearly double at an eye-watering £373.

The traveller might baulk at the journey time compared to flying (just under five hours from Edinburgh), but you'll travel in comfort and spend your time productively, with free wi-fi and power points in first class. East Coast and Virgin Trains are starting to eat into airline dominance on the Edinburgh/Glasgow-London routes, and with journey times set to come down further, their share will increase.

The interesting thing about Scottish Executive is that booking it doesn't breach travel policy, which in these austere times forbids first-class travel for most organisations. Everyone is happy - the accounts or procurement department, and the traveller.

But why should the train operating companies (TOCs) be happy? The answer is that those with a high proportion of first class seats are deep in the mire because of the recession, with first-class occupancy down dramatically. East Coast, Virgin and First Great Western have too many first class seats for today's business climate, while standard class is often so full that passengers without reservations may have to stand. But it isn't easy to re-configure the trains, and to simply turn over first class seating to standard class would undermine the whole concept.

Raj Sachdave, strategic business development manager of Capita Business Travel, says: "Scottish Executive is a first class product, but it doesn't say that on the booking tool. Business travellers are having to move out of first class because of policy, but only some booking systems flag up that this package actually costs less.

"TOCs are becoming more creative in managing yield. They are also considering a first class product stripped down to the basics while keeping a good working environment, which would not breach travel policy."

The key is not to call it first class - which is what Eurostar has already done, retaining its full-frills Business Premier service but introducing Standard Premier.

Guild of Travel Management Companies (GTMC) figures show that rail continues to grow, but at a slower rate: in the 12 months to September 2010, rail transactions grew by 13 per cent to over 14.5 million, but growth in the July-September quarter was only 7 per cent over the same period in 2009. GTMC CEO Anne Godfrey says: "First class is no longer an acceptable option for either the public or private sectors, meaning you are less productive when travelling."

Carlson Wagonlit Travel director of programme management, Nigel Turner, adds: "Standard class is increasingly crowded, and fares are going up. Many fares will increase in January and the availability of lower advance fares is decreasing."

TOCs may be trying to fill their empty first-class seats, but some are nearing the end of their franchises and are unwilling to invest. Virgin's franchise is up for renewal in March 2012 and National Express East Anglia's in October this year. East Coast - run by the government since National Express defaulted on its franchise in November 2009 - will be put out to tender some time this year.

Europe

THE SIGHT of a Deutsche Bahn ICE high-speed train at St Pancras International in October was both striking and symbolic. Eurostar will face competition for the first time when the German operator starts running through the Channel Tunnel - but it has expansion plans of its own, including through-trains to Amsterdam (four hours) and Geneva (around five hours).

October's publicity exercise was a statement of intent, but Deutsche Bahn does not expect to start services until December 2013. It is building a new fleet of Intercity Express (ICE) trains able to operate safely through the tunnel (the train which came in October was empty), but it also needs regulatory approval from the British, French, Belgian, Dutch and German authorities.

The plan is to operate three services a day formed of two coupled trains, which split in Brussels, one train proceeding to Cologne (four hours) and Frankfurt (five hours), the other going to Rotterdam (three hours) and Amsterdam (four hours).

Whether business travellers would switch to rail depends partly on travel policy - rail is obviously greener - and on how you view the end-to-end journey. If they're travelling from city centre to city centre then rail is competitive up to three or four hours, but if you can work in comfort for the whole journey then going by rail is much more productive even on longer trips.

Direct trains to Germany, Holland and Switzerland are an exciting prospect, but it is already possible to travel beyond Eurostar's gateways of Paris, Brussels and Lille with one change of train. One may need to change stations in Paris, but Brussels Midi is very convenient, with services by Deutsche Bahn, Thalys and various Dutch operators.

Deutsche Bahn director of international sales, UK & Ireland, Oliver Schmidt, says: "Connections with Eurostar work well, but having to change trains is a psychological barrier. Changing trains is simple, but connection times could be improved."

Deutsche Bahn already handles a lot of UK business travellers, mainly to Cologne and the Ruhr area, but only 40 per cent arrive via Eurostar, with 60 per cent flying into Germany and using domestic services.

Eurostar's new e320 trains can operate across the European high-speed rail network, and 10 are on order for delivery from 2014. Top speed is slightly higher at 320 km/h (200 mph) rather than 300 km/h (187 mph), meaning a small cut in journey times to Paris and Brussels.

The existing fleet - in service since 1994 - will get a much-needed make-over starting this year. Eurostar plans to install wi-fi across the whole fleet, a service not currently available yet offered by TOCs, including Virgin and East Coast.

Investment in new and refurbished trains totals £700 million, ensuring Eurostar is well placed to take on competitors. A revamp of on-board service in September saw the introduction of Standard Premier, at prices from £189 return to Paris/Brussels compared to £450 in Business Premier. Passenger numbers rose by 6 per cent to 4.6 million, and revenues by 18 per cent to £404m, during the first half of 2010.

According to Michael Birtles, managing director of Erail Travel, a specialist rail booking agency for Europe: "Travelling by train really is the relaxing way to do business and is surprisingly cost-effective, too. For many journeys, such as London to Cologne or Rome to Milan, the overall journey time is about five hours by train or plane. But many travellers overlook the quality time on a train to prepare for a meeting and arrive relaxed.

"Even the cost is on a par with low-cost airlines, such as London to Frankfurt from £92 return in standard class."

BOOKING SYSTEMS: BRITAIN

MOST CORPORATES already realise the value of advance booking and managing their rail spend, but another increase in many walk-up fares this January could persuade more small and medium enterprises to consider advance booking.

The government regulates some fares, and is allowing a 3 per cent increase above inflation. The £12 billion annual cost of running the railways is currently shared 50-50 by passengers and the taxpayer, but the government wants passengers to pay 75 per cent so further increases are inevitable.

Regulated fares include most season tickets, and some off-peak and Anytime day return tickets. TOCs can increase unregulated tickets as they wish, including long-distance Anytime and advance tickets.

Some travel management companies suspect advance tickets in standard class are being restricted. But Jonathan Reeve, trade relations director of Evolvi, says: "There is no evidence that TOCs are deliberately restricting advance ticket quotas. But these quotas are now being filled more quickly as more travellers are ussing standard class.

"We are still seeing a double-digit growth in overall volumes, as private sector travel is buoyant. But it is a concern that the private sector will also be hit. In time there will be potentially significant fare increases for business travellers, particularly for walk-up tickets."

Meanwhile, thetrainline.com is driving forward with new technology. A new mobile app allows travellers to buy tickets from their handset and collect them moments later from ticket machines at over 900 stations. More than 900,000 have already downloaded a free iPhone app, and this will soon be extended to most other smart phones.

The app lets travellers configure their home station, manage favourite journeys, and store credit card details. In response to a survey, thetrainline.com is working on developments such as an app to wake the traveller up just in time for their stop, and automatic notification to family or friends when they are nearly home.

Soon, e-ticketing will be available via a secure barcode delivered to the mobile, but only for travel on TOCs that have invested in barcode readers on trains or at ticket gates.

Richard Rowson, thetrainline.com's product development director, says: "At present these apps are aimed at consumers paying by card at ticket machines, but we will extend this to the corporate market paying on account. It's a question of balancing functionality with ease of use."

BOOKING SYSTEMS: EUROPE

IT'S SOMETIMES SAID that air travel is easy to book but stressful to experience. With European rail, it's the opposite.

An alliance of high-speed rail operators called Railteam - including Eurostar - tried and failed to come up with a Europe-wide reservations system. The European Commission is now trying to bang heads together using all the latest information and ticketing technology, in a project called TAP TSI (Telematic Applications for Passenger Services - Technical Specification for Interoperability).

The GTMC has asked Evolvi and thetrainline.com to represent it on a steering committee, in the hope that European rail will one day be integrated into their systems. GTMC CEO Anne Godfrey says: "There is no joined-up ticketing process across Europe, and sometimes a business traveller has to pay by card and claim expenses. I'm optimistic that commercial interests will win through and that this will change, as everyone would gain from it."

The European Commission (EC) hopes a system will be in place by 2013, but the global distribution systems (GDSs) already have major rail operators on their systems and are working on enhancements. HRG industry and fare distribution director, Tony Berry, was one of the speakers at a recent European rail forum organised by Amadeus.

"What we need is access to corporate and net fares, and simplification of the fares structure," he says. "At present we use GDS and direct booking, but booking rail needs to be integrated with air, car rental, hotels and a full range of MI [management information] including emissions reporting. The EC's plans are very ambitious, but very necessary."

The head of Amadeus' rail business unit, Diane Bouzebiba, says the GDS has been used for booking rail in domestic markets for 15 years. But travellers and travel sellers face a lot of frustrations with cross-border travel. "Getting everyone's agreement is long and tortuous, but the EC project is a major milestone," she says.

"We had the technology to work with Railteam, but co-operation between rail operators doesn't come naturally because they focus on their domestic markets."

Travelport and Sabre are also focusing on rail, with Travelport's Universal API being developed to give travel bookers an informed choice about all forms of transport.

Travelport's senior product manager Phil Donathy says: "You can already see Eurostar fares alongside air fares, and we are working on the same for the German and Dutch rail systems. I know EC discussions are taking place, but we have already made an investment."

Rail is very much more complex than air - with tens of thousands of possible station-to-station journeys in Europe.

Each rail network has its own rules and standards for all kinds of things - age limits for children's fares, for example. But it would be a travesty if business travellers miss the European rail revival.