Feature: Rail Travel
All ABOARD!
The migration from air travel to rail for domestic journeys continues to steam ahead for the corporate market, but will rising fares slow progress? Dave Richardson examines the changing face of corporate rail travel
ALL THE SIGNS are that business use of rail travel is continuing to grow, despite harsh economic times and much touted hikes in walk-up fares that in some cases were much higher than inflation. But the business community has to accept that the cost of rail travel will keep on rising, making some businesses start to think twice. Britain’s railways are currently funded roughly half by passengers, and half by taxpayers. The government wants passengers to pay about 75 per cent so fares will continue to increase, and higher fees are also inevitable as the commission paid to TMCs is cut.
The Association of Train Operating Companies cut the commission rate from five per cent to four or three per cent last year, the higher rate applying to TMCs which provide a financial guarantee against their collapse. From April this year the rate goes down to
three per cent with all TMCs having to provide this guarantee, and the result will be higher transaction fees or, if commission is rebated, less of a kick-back to the corporate. But as most business users are now aware, major savings can be made by online booking in advance – irrespective of hikes in walk-up fares. As the table on page 25 shows, the
Evolvi booking platform can claim savings of up to 80 per cent on peak time business trains booked two weeks in advance. Savings tend to be much less when booking a few days ahead as most businesses do. Evolvi handles over half of all TMC rail sales
and 27 per cent of all rail bookings made online. The MI it provides is very rich and includes strict policy compliance tests, and it can flag up transactions where a higher fare is booked rather than the lowest available. In 2010 it drove up revenue by eight per cent to £262million, whereas total rail sales through TMCs increased by 4.3 per cent to £522million.
22 I THE BUSINESS TRAVEL MAGAZINE 18 I THE BUSINESS TRAVEL MAGAZINE
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