The future of rail travel

Group commercial director, Stewart Harvey, presents an HRG video perspective on the future of rail travel.

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Back to the Future, the film title, has become a much-overused newspaper headline ever since its release in the 1980’s. However, one major development that has transformed travel in recent years makes me think of the exact opposite phrase: Forward to the Past.

I am talking, of course, about rail. Invented in the 19th century, it lost ground massively to air in the second half of the 20th century, but it has fought its way back to become the short-haul transportation mode of the 21st century. Now the corporate travel industry needs to start managing rail in a 21st century way too.

It is the widespread introduction of high-speed trains which has spurred the rail renaissance. Often travelling at 300km/h or more, Europe is rapidly joining up as a single network covering France, Belgium, the Netherlands, Germany, Italy, Spain and the United Kingdom. On routes like London-Paris or Milan-Rome, we now sell many more rail than air tickets at HRG, and the numbers are growing all the time. Europe has a larger population than the USA, but only 35 per cent of the land mass, so I believe the potential for even greater use of rail is enormous.

And the rail revolution is by no means confined to Europe, where we sometimes forget it was the Japanese who first fulfilled the potential of high-speed rail with their amazing bullet trains. Now the Chinese are getting in on the act. 1 July saw the official launch of the Beijing-Shanghai high-speed service, built in a barely believable 39 months at a cost of 221 billion yuan (£21 billion sterling). Before the new line opened, the fastest rail journey time between China’s two largest cities was ten hours. The new service does it in just 4 hours 48 minutes.

The scale of rail development in China is almost impossible to comprehend. The government plans to run 90 trains a day on the Beijing-Shanghai line, and it has completed or has under construction 10,500 miles of high-speed track. That’s more than has been built in the whole of Western Europe in the last half-century, although a major fatal rail accident in July lent weight to those critics who think China has developed its network too quickly.

Don’t rule out India joining the Chinese at some stage either. India has an extensive existing 19th century network, and the Indian railway is said to be the world’s largest employer. The Indian government has investigated modernising through the construction of six high-speed corridors. Finding the money won’t be easy, but India knows it needs to make that kind of investment to keep pace with its major emerging Asian rival.

As to why there is such a rail frenzy in Europe and Asia, the answer isn’t hard to find. Trains are greener, faster (from city centre to city centre), more comfortable and more productive. Travellers can avoid those time-hungry transfers to out-of-town airports that are followed by long security queues and walks to the departure gate. Then, once on board, they can work in quiet surroundings for a couple of hours or more at a stretch – something that is very hard to manage on a short-haul flight.

In fact, business travellers are becoming such big fans of rail that at HRG we have seen a noticeable trend for them to accept longer journey times. Travellers know they will get more work done, so they will now willingly accept up to four hours, whereas a few years ago the limit of acceptance was closer to three hours.

Travel managers are well aware of the big switch to the train too. It has made them more determined to control what has often proved a challenging segment of their travel spend in the past. However, this is where the brakes get applied to the runaway success story that is rail. What corporate clients want is very simple: they want the same booking, billing and data processes for rail as they receive for air. Unfortunately, they are not always getting them.

There is a legacy problem here. Historically, the distribution systems for booking air and rail were completely separate. The distribution industry did finally realise a few years ago that customers want to compare air and rail departure times and prices on the same screen, but results so far have been sporadic. Some rail operators have been integrated with air on some global distribution systems and self-booking tools, but it remains very much a patchwork quilt for now. At HRG we are doing everything we can to resolve the situation, partly through applying pressure for improvement to distributors (and rail operators, who often use disappointingly antiquated reservations technology) and also through introducing technology fixes of our own.

Meanwhile, travel managers also have work to do to bring rail management up to the same high standards as the rest of their programmes. In particular, we find policy is not controlled as tightly as for air. A common problem is allowing travellers to buy fully flexible rail tickets even though they would be required to book restricted tickets for the same trip by air. Allowing travellers to buy at the station on departure is another familiar story, yet if they booked in advance they could easily reduce the fare by 50 per cent or more.

We have introduced a communications programme to help our clients change these ingrained rail booking habits, and the message is starting to be heard, especially among public sector organisations, which have dramatically cut their rail spend over the last year. We think the same could be achieved in the private sector, where we often hear stories of travellers saying they need fully flexible rail tickets when this turns out not to be the case.

I am confident many more travel managers will get on track to better control of their rail spend over the next year or so. For one thing, it is a largely untapped source of savings for travel programmes that are now otherwise extremely mature. For another, more businesses are appreciating that rail represents an increasingly large slice of their spend – in some cases the biggest. HRG is climbing on board the rail revolution, and we cordially invite you to join us.

All prices quoted in Chinese yuan and GB sterling.
Prices quoted correct at time of activity.

 

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