Rail Travel-Travel Buyers Can Make Substantial Savings
Posted on July 20, 2008 - Filed Under Online travel for less
Tasked with responsibility for business travel, many travel buyers face a frustrating and perplexing time dealing with rail expenditure. Savings can be made but it requires hard work, time and first class communication skills.
Business travel buyers are finding that traditional procurement tactics are of limited use when dealing with train operating companies. The reason for this is due to the structure and set up of the UK rail industry since privatisation.
There are 20 franchise companies that make up the association of train operating companies (ATOC). Their licenses are overseen by the Government and awarded with stringent guidelines.
Rail fares on some routes are strictly controlled even to the point where revenue is shared between rival operators. This means that the normal supply and demand principles that apply with airlines are redundant.
On rail routes that don’t have pricing restrictions there is often little competition. Rail operators are therefore running a monopoly with little incentive to negotiate on price. Why should they if they already have your business?
Train companies will negotiate when you have something to give in return
That said, there are opportunities to save costs but these are often restricted to ancillary services that form part of the total journey cost. For example, car parking and food and beverage charges. There may even be scope for upgrading i.e. travellers pay standard fare whilst travelling in first. Train companies will negotiate when you have something to give in return.
Your train operating company is interested in incremental business. Business they don’t already have. Their competitors are the airlines and vehicles on key intercity and mainline routes. Prove you can influence your travellers switching to rail and you’ll have fruitful negotiations.
When you negotiate with a rail company you must demonstrate you have control of your rail expenditure. This means having accurate data. You will need the class of travel, ticket types, advance purchase details and detailed journey plans.
If your travellers buy their own tickets at stations and claiming the money back through expenses, you’re weakening your position. Accounting packages cannot supply the depth of data required to support your negotiations. Many companies find themselves in this position with leakage accounting for as much as 70% of expenditure. Moreover, there’s compelling reasons for influencing your travellers to buy through approved suppliers.
Most routes offer substantial saving opportunities
Obtaining rail savings is not just about price negotiation. You can take advantage of existing pricing by being more creative. Most routes offer substantial saving opportunities. For example buying a standard open return ticket from Euston to Manchester, leaving early morning and returning the same day would normally cost 230.00euros.
Buying 2 separate one way tickets for the same journey at exactly the same train times can be bought for 70euros. What’s required to achieve this massive saving is the knowledge of knowing what to do, communicating that knowledge to travellers and getting them to change their buying behaviour. Travel management success is about controlling and influencing traveller behaviour.
One influencing tactic that can be used is a self booking tool (SBT). SBT’s make rail timetable and pricing more accessible to travellers. They are by no means perfect but they will help to make your travellers more accountable for their actions. Many companies have reported savings when they’ve implemented SBT’s. BT, the telecommunications company, and one of the biggest spenders of rail travel in the UK, are getting an average rail fare reduction of 30% by getting their travellers to use an SBT.
Ticketing is still an issue but technology will continue to evolve and improve. Desk top printers are already in use. So too are fast ticket machines strategically positioned at main line rail stations and, like the airlines, electronic tickets will eventually be introduced.
Convince them it’s worth making the change and you’ll get substantial rail travel savings
In conclusion, you can make savings in your rail expenditure but to be successful, you must influence your travellers to change their buying behaviour. Convince them it’s worth making the change and you’ll get substantial rail travel savings.
Get your senior management to endorse your strategy. They will want to see the business case before giving their support. This requires a business plan detailing the rail savings on offer and your strategies for realising those savings. The savings projections can be obtained by auditing your key rail journeys. The savings will be substantial as the Euston Manchester example has proven. Invest your time and resource and you’ll deliver a credible and compelling reason to support your initiative.
If you don’t have the time or resource to write your business plan, then help is at hand. We can either lend expert coaching advice or write your plan for you.
If you’d like to discuss this in more detail then email Russell Hart at rh@academyobt.com or telephone 01258-489112.
Russell Hart-Academy of Business Travel-http://www.academyobt.com
Related Posts
- Rail Travel-Travel Buyers Can Make Substantial Savings
- Rail Travel-Travel Buyers Can Make Substantial Savings
- Travel Europe by Rail and Europe Becomes Your Undiscovered Oyster
- Rail Travel
- Holiday Travel Packages — Tips To Get The Most Out Of Your Holiday Travel Package
Comments
Leave a Reply
About US
Something About You releated to your blog, what you do etc.
Theme YGo Sea is designed by YGosearch and MySpace Codes, Affordable Web Directory