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European rail growth: technology reaches its limit

March 21, 2011
Author: Eve-Marie Morgo

European rail has reached tipping point. That’s according to Tony Berry, Director of Industry and Airfare Distribution at the Hogg Robinson Group, who says current technology can no longer keep up with rail’s growth. This has effectively put an end to all expansion until the technology used can handle it.

Rail Customer Experience

Yet, growth there will be. De-regulation is around the corner and in 2014 EU legislation will come into force allowing foreign companies to manage travel within once heavily protected borders. It will be the last in a series of EU measures which will see European rail travel open up and the monopolies of old perhaps feel the strain of competition.

And it is hoped, and expected, that this de-regulation will usher in a period of rapid growth in rail travel.

For Tony, the challenge that lies ahead is to find a way to get travellers out of planes and cars (the traditional modes of transport) and into trains so that deregulation bears fruit.

For passengers to switch their travel habits, two things need to occur:

1. The cost of rail travel must not outstrip that of air.

2. Booking a trip needs to be easy, simple and effective. The technology that allows this needs to be at the traveller’s fingertips and not restricted to the specialist rail company.

 

For rail operators, a large part of their strategy depends on whether or not they can lure business travellers away from the skies. Indeed, it’s this market segment that is most accustomed to air travel. As Tony says, there is a perception that air travel is faster and more comfortable. The air industry knows this and airlines have worked hard to lock these customers in. The rail industry has to break this.

Already, certain lucrative business routes have seen their market share increase, notably Milan-Rome and Madrid-Barcelona, largely thanks to the advent of high speed rail. The goal is to increase this. This can be done by offering more products and services in order to make the rail experience more like that of air.

 

Yet, it’s about more than just tempting travellers with ancillary services and products on board. Rail companies need to provide customers with the total rail experience.

This starts pre-journey, when travellers will have all the necessary information regarding their trip at their disposal. They need to have choice and companies need to explain all that is on offer. They need to be able to book a trip wherever they are and whenever they want. Today’s travellers are technologically savvy and mobile hungry and on-the-go solutions are becoming increasingly important in the fight to attract a booking.

And the customer-centric approach does not end when the train pulls into the station. Post-trip it’s important to gather all feedback possible so that rail operators can set expectations for future travel. A relationship between operator and customer needs to be built. This is what the airline industry has been doing for years.

Taking some of the airline industry’s market share will not be easy, but it’s possible. Once rail’s offering is on par with that of air, they can fight for a piece of the lucrative pie.

Give travellers what they want, and they will come.

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Reinventing rail in europe:
the battle for the customer

The Battle for the Customer will ask how rail can use it to strengthen customer focus and look to other industries for best practices in terms of the strategies and mindsets that drive change.