How far down the track is the seamlessly integrated rail booking that buyers want? Dave Richardson investigates
IN AN IDEAL WORLD, booking rail travel would be fully integrated with booking flights, hotels and other parts of the business travel jigsaw, deploying a full range of mobile booking options. But the world is far from ideal, and long-term growth in rail traffic could be undermined by the fragmented nature of the railways themselves.
This is frustrating for the online systems that dominate booking rail travel in Britain, and yet they have made real progress over the last couple of years and have brought major innovations to market. Evolvi and Thetrainline.com have both launched mobile apps, and are now pushing ahead with plain paper ticketing. But due to the limitations of Britain’s rail infrastructure, the day when a mobile device could store a ticket to access ticket barriers and be read by ticket inspectors looks a long way down the line.
GROWING MARKET SHARE
Evolvi, which sells exclusively through TMCs, is the clear market leader in corporate online booking. Last year its share of the business travel market moved up five percentage points to 55 per cent as it launched its new-generation platform, Evolvi-ng. Annual ticket revenues rose by 19 per cent to £340 million, while annual transactions grew to 5.52 million from 4.7 million, with 540,000 registered users linked to over 200 TMCs.
This happened at a time when many businesses were cutting their total travel spend, but more were switching travellers to rail or making it part of corporate travel policy for the first time, rather than allow staff to book their own tickets and claim on expenses. Evolvi has also faced more competition, not only from Thetrainline.com but also from new entrants such as Redspottedhanky. But as Evolvi managing director Ken Cameron points out: “New entrants have yet to gain traction in our part of the industry, but may well have made strides in the consumer market.” According to rail industry figures, Evolvi’s £340 million ticket revenue in 2012 compares to £275 million for all others combined.
After years when Evolvi’s average transaction value was declining, it increased by about £1 to £61.81 in 2012. But advance booking through systems such as Evolvi is still reaping dividends for businesses, as walk-up fares are increasing by around 6 per cent per annum.
In what is thought to be an industry first, Evolvi has developed a mobile app (for Apple and Blackberry devices) that captures management information (MI) and ensures policy compliance. Trade relations director Jon Reeve says: “We are also optimising interface with third-party systems such as self-booking tools and expense management, and we can already store lodge card information.” Plain paper ticketing has started for Chiltern Trains, with other train operators to follow, and electronic refunds will become a reality by the autumn. Reeve adds: “Plain paper ticketing can only be used for advance purchase tickets with seat reservations on a particular train because of a fraud risk, as there’s nothing to stop people printing out the same ticket again and again. But this is of interest as more businesses book advance fares, and the top 10 per cent of our customers have seen double-digit growth in advance fares over the last two years.”
Thetrainline.com already has a wide selection of train operators available on plain paper printing, including franchises run by First Group, Virgin Trains, Cross Country, Greater Anglia, Grand Central and now East Coast. Its app, however, does not include business tools such as MI and policy compliance. Thetrainline.com’s head of distribution, Ian Cairns, says: “Advance tickets represent a considerable chunk of business, including 40 per cent of one TMC’s bookings with us. American Express was the first TMC to go live with plain paper ticketing and we see uptake slowly growing over the next 12-18 months, taking away some of the need to use desktop printers.” He adds: “The rail industry has been slow to move with mobile ticketing, but it is looking at setting standards and it is inevitable that this will come.”
Evolvi’s Reeve agrees: “The market wants any journey to be fulfilled by a barcode on a mobile device o plain paper. But it’s difficult to do that with the limitations of the rail infrastructure.”
CALCULATING TRUE COST
Unlike Evolvi, Thetrainline.com also deals with corporates direct, and is working with them to identify the true cost when they allow people to book tickets themselves – including missed opportunities to choose lower fares, and the cost of reimbursing expenses. Thetrainline.com’s head of account management, Clare Morrissey, says: “We definitely believe there is still growth in the market, as many clients still don’t mandate rail travel. When corporates have our ‘cheapest ticket’ travel policy tool turned on, 84 per cent of purchases are for the cheapest ticket for that journey.”
She adds: “Our app is now being extended to business bookings, but it is a mechanism to book tickets rather than a complete end-to-end business system.”
KEEP IT SIMPLE
TMCs and buyers are happy with the savings and efficiencies offered by online booking systems, but express some frustration that rail is not as simple to book as air. HRG reached a milestone in the year ending November 2012 when, for the first time, it booked more rail tickets in the UK than air or hotels. Tony Berry, HRG director of industry and fare distribution, says: “It’s interesting to look at how competition between airlines and rail companies on UK domestic routes is evolving, with product enhancements and flexible price playing a key part, particularly in first class. UK business travellers prefer rail travel to air on routes of three hours or less, and travelling by train has re-emerged as a genuine alternative to air travel.
“But corporate clients want the same booking, billing and data processes for rail as for air, and this has presented challenges as distribution systems for air and rail have traditionally been completely separate. It makes good sense to satisfy travellers’ appetites for mobile solutions by permitting apps, but it’s vital that any mobile tools are integrated in your travel programme.”
One travel manager for a global business consultancy firm agrees: “E-ticketing is undoubtedly what we want to see from rail booking systems, so you can simply swipe your smartphone at the barrier. Airlines have gone ticketless and are now adopting mobile boarding passes, but the rail industry lags behind with no electronic barriers at many stations.”
He adds: “As a company we are moving to mobile technology, and we’re talking about a lodge card for rail bookings when we get higher online take-up. But people are resigned to the fact that when you book rail travel, it’s bureaucratic. Most train operators run monopolies, so complacency sets in.”
HRG’s Berry says that as demand for mobile booking apps increases, so does the need for a common pricing and ticketing platform. “A centralised system, incorporating ticket validation when boarding the train, improves the data available to both train operators and TMCs,” he says.
Capita Travel and Events – the largest TMC supplier of rail bookings with nearly two million transactions a year – feels that corporates now want more than the rail ticket in the same booking. The message about savings of up to 40 per cent achievable by online systems is well understood, but corporates want ancillary spend – such as onboard wifi
, food and beverage, and station parking – included. Capita’s head of rail, Raj Sachdave (pictured), says: “Our Interactive Campaign Manager software, with ‘intelligent’ email confirmations, can deliver negotiated savings on these ancillaries, and we’re also building in a trial of taxi booking at the station to be billed back to Capita.”
Sachdave says that plain-paper ticketing is a welcome development as more corporates buy advance tickets, but it isn’t the silver bullet. “Our customers have been teased too long about the introduction of mobile ticketing,” he says. “But there needs to be clearly-defined leadership by a government agency or a group of rail franchises under one company’s control. Technology companies are going one way and train operators another, when what we is need harmony. There is no point making mobile ticketing available when there are several ways of doing it.”
According to Carlson Wagonlit Travel (CWT), corporates are now booking rail travel an average of 7.6 days in advance – a major cultural shift over the last couple of years. CWT director Nigel Turner says mobile booking is essential as more TMCs and corporates adopt their own mobile solutions. “Currently, 48 per cent of rail travel for all CWT clients is booked online, with some clients as high as 98 per cent,” he explains. “This, combined with the proliferation of mobile apps, has been described as a challenge for buyers looking to keep travellers in policy. However it could, and should, be recognised as an opportunity.”
Turner says apps such as CWT To Go can improve the traveller’s experience – they can sync itineraries and receive updates to their smartphones. “If integrated with the online booking tool and expense management system, it can capture data for the buyer, including information on behaviour patterns and spend.”
BRITAIN’S RAIL NETWORK is carrying more passengers now than at any time since the 1920s, when the network was much bigger. The Association of Train Operating Companies (ATOC) says the strength of the central London economy, high petrol prices and good value advance tickets are driving growth, while rail watchdog Passenger Focus reports generally high levels of passenger satisfaction.
ATOC is predicting up to a 21 per cent increase in passenger numbers by 2020, helped by huge investment in electrification of lines, and new Intercity Express trains entering service from 2017. More than 1.4 billion passenger journeys were made in 2012, double the total in 1981.
Evolvi’s Jon Reeve says: “We need to think about what else can be done to maintain this growth. Why not incorporate simple associated services into the ticketing process, such as station car parking and onboard refreshment vouchers? Also, provide live train running information onboard. It’s all feasible – it just takes some vision.”
GOVERNMENT’S FRANCHISE SYSTEM
UPHEAVAL IN THE GOVERNMENT’S franchising system for Britain’s railways could delay the industry-wide introduction of technology to make possible ticketing by mobiles and other smart devices. The Department for Transport (DFT) was found to be at fault in last year’s debacle over renewal of the key West Coast franchise, covering the main business routes from London to the West Midlands, the North West and Scotland. The franchise award to First Group was later rescinded, with incumbent Virgin Trains being allowed to continue.
The fiasco – which will end up costing taxpayers tens of millions of pounds – has led to an ongoing review of the franchising system, and the announcement of a new timetable for franchises due to be renewed over the next couple of years. Although not formally announced, it now seems likely that the DFT will opt for shorter franchises of up to around eight years in future. Problems forecasting revenue growth further into the future arose with the West Coast franchise renewal, which was due to run for 14 years until 2026.
But shorter franchises discourage train operators from the major investment needed in new infrastructure, such as electronic barriers and ticket readers able to recognise mobile or smart tickets.
The DFT has announced that another key business route, East Coast, will be put out to franchise again by February 2015, having been effectively nationalised since 2009 when National Express walked away from the franchise. Virgin Trains will continue to run West Coast until April 2017, and several other major franchises have been extended while the DFT gets its act together. The Great Western franchise (First Group) will now run until July 2016 instead of ending this year.
Evolvi’s trade relations director, Jon Reeve, comments: “Short-term franchises mitigate against the wider adoption of new ticket fulfilment techniques. Train operators will not want to spend a lot on infrastructure, or any other large capital expenditure, if their franchises only have a few years to run.”
EUROSTAR MAY BE easily bookable on global distribution systems (GDSs), but booking other European operators is more problematic, and integrating rail and air bookings on the same display is taking a long time.
Amadeus is the leading GDS for booking rail, claiming the “first truly global rail sales platform”, which includes Eurostar, SNCF (France), Thalys (international, based in Brussels), Lyria (Switzerland/France), Trenitalia (Italy) and SJ (Sweden).
In its report, The Rail Journey to 2020, Amadeus predicts that long-distance passenger traffic in Europe will increase by 21 per cent (2.2 per cent annually) to reach over 1.36 billion journeys by 2020. Factors include an increasing number of high-speed lines, more competition, and more co-operation between train operators, and also between train operators and airlines.
Amadeus says improved booking systems are a vital part of this growth. Thomas Drexler, director of Amadeus Rail, explains: “Building standards for data exchange, booking and ticketing services will fundamentally change the way the traveller will view rail travel. It will make rail travel more accessible, and improve the perception that rail is the way to travel across Europe. This will, in turn, encourage the idea that through-ticketing is a must for this to be successful.”