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European rail growth: technology reaches its limit

March 21, 2011
Author: Eve-Marie Morgo

According to Tony Berry, Director of Industry and Airfare Distribution, at HRG, European rail has reached a tipping point, bringing growth in rail travel. But how can you lure business travellers away from the sky

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.

Yet, growth there will be. European rail deregulation is around the corner and in 2014 EU legislation will come into force allowing foreign companies to manage travel within once heavily protected borders.

Deregulation will bring growth in rail travel. How rail companies can lure business travellers as the most profitable customer segment -> need to provide total rail experience

Deregulation in a period of rapid growth in rail travel

For Tony, the challenge is to find a way to get travellers out of traditional transport modes into trains. There are 2 steps to switch passengers from air to rail travel

  • The rail cost must not outstrip air's one
  • The rail booking process needs to be easy and simple 

A large part of railway's strategy depends on luring business travellers away from the skies. There is a perception that air travel is faster. Airlines are aware of this common thought and have worked hard to lock these customers in. Will the rail industry be able 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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