What We Learned at World Rail Festival 2019, and What it Means for You
The World Rail Festival is an event held in Amsterdam each year that brings together passenger rail operators and vendors from all over the world.
We at Revenue Analytics are proud to have sponsored and attended the event. I was joined by our CEO, Dax Cross, our VP of Rail & Cruise, Stan Ward, and our Customer Strategy & Success Specialist, Bennett Garland. We enjoyed meeting with industry peers and introducing our new, next-generation Revenue Management System, FareVantage™.
Attending World Rail Fest allowed us to connect with people from the UK, the U.S., Scandinavia, continental Europe, Indonesia, South Africa, and more, and their story is the same—advanced Revenue Management is essential for the modern passenger train operator.
Here are the three biggest takeaways that we hope will bring deeper industry insight and more successful collaboration moving into 2020 and beyond.
1. Customer Focus is Front and Center
Regardless of the decision that must be made, it’s apparent, and frankly necessary, that rail companies keep their customer top-of-mind. This is something we’ve heard before, but the way this plays out across all levels of the business is exciting.
For example, from a commercial level, the industry is beginning to update entire fleets to lure in additional passengers with additional comfort, while at the operational level, they’re adding more stations to give customers more flexibility for their travel needs.
Gone are the days of setting schedules and hoping passengers will come, since this “build-it and they will come” mentality is no longer aligned with what customers expect.
Instead, differentiation is the key to increasing the overall size of the rail pie.
To do so, passenger rail must be more creative in their travel techniques than their air and ground counterparts—focusing on the most tangible and problem-solving benefits they can provide the customer.
The goal? To keep the customer’s happiness at the heart of these decisions, 100 percent of the time.
2. International Expansion Equals Increased Competition
Train operators are migrating to other countries that are not their home base. And though Eurostar, for example, has been doing this for quite some time, lower-cost carriers are beginning to expand into regions that historically have been void of competition. While the competitive impact here will be very interesting, what remains to be seen is if these new entrants will increase overall demand for passenger rail.
Thus, it’s important to include your competitors in your pricing decisions, but not too explicitly.
Okay, but why?
You need to know the direction your competitors are heading in terms of price, but you shouldn’t follow them too closely or you’ll spiral price downward.
Be proactive in identifying these pricing changes. Let your pricing managers know about them, and then let them make an informed decision based on their market and pricing knowledge.
Remember, the bigger the playing field, the bigger the competition. And with increased competition, Revenue Management becomes even more important than it has been in the past.
3. Going Green is the Way to Go
Ridership is growing in large part because customers today are more environmentally conscious. When it comes to green credentials, passenger rail has more to offer than the competing alternatives. To take just one metric, CO2 emissions are 64% lower than driving according to this BBC article.
So, if rail operators continue to reinforce this environmental benefit, they’ll have a strong lever to lean on against non-rail competitors.
This is an interesting approach to gain demand because it provides a genuine differentiator against other modes of transportation.
Furthermore, ensuring your prices are correct and in line with other modes, all things being equal, travelers prefer the convenience of rail and the perks it offers such as Wi-Fi, expedited security, and less downtime.
Putting it all Together
Both during the event and around the dinner table, discussions revolved around an ever-changing industry. Today, train operators have more on their plate than ever before as they try to find balance between growing customer expectations, expanding competition, and increasing ridership.
Because the industry is becoming more saturated, the stakes are now raised for departments within a single company to not only work together, but to work better together, and more often.
One way to achieve cross-departmental collaboration is with a modern Revenue Management System that can help improve this organizational alignment. With the right technology, Revenue Management teams will have the ability to work faster and smarter, and achieve significant improvements in ridership, revenue, team efficiency, and customer experience—all at the same time.
Revenue Analytics has helped some of the biggest corporate names in the world do just that for over a decade and now brings that expertise to the passenger rail industry. Book a demo with FareVantage™.