November 2017, Amsterdam
Rail appeal: a natural addition to the connected journey
It’s estimated to be a $1.3 trillion market and companies from across the travel spectrum are waking up to it, writes Sally White
Rail deals are piling up! Travellers, hoteliers, OTAs, aggregators, investors and rail companies - all seem suddenly to have woken up to the opportunities here. Everything is going for it. Traveller numbers are rising as journeys by road and air become more hassled and as rail benefits globally from pro-rail policies to manage urbanisation and pollution.
New technology is capturing traveller data and the EU, for one, is now putting on pressure for publication. Anyway, the data is already revealing a growing market and the appetite for online services.
Guestimates give rail over 10% of the $1.3 trillion world travel market (so says UNIFE, the European rail manufacturers’ association) with growth forecast to continue at around 2.6% a year. In Asia, the source of a third of the growth, the numbers are huge – 2.5 billion travellers a year in China alone, according to the country’s Rail Corporation. India and Japan are also big rail travellers, as are the French and Germans (42% of EU travel). The EU rail market is worth €3.5 billion, or twice the size of its low-cost airline market, according travel software group Sabre.
Sabre’s website notes that within Europe, air travel is declining in many markets, while currently cross-border rail accounts for around just 5-10%. But “we believe there is a significant potential to grow that proportion,” Christoph Klenner, Secretary General of the European Technology & Travel Services Association, is quoted as saying.
SilverRail, the rail ticketing and distribution platform, says the market is ready: “More often than not, people underestimate, or don’t realise how relevant rail is across Europe and the extent of its demand. For instance, a lot of people don’t know that when rail’s journey time is reduced to 2.5 hours or less, 80% of travellers prefer to travel by rail instead of air. With the introduction and growth of high-speed rail between key cities in Europe, a journey time like this is becoming more and more of a reality, and as a result rail travel between these has become the norm and preferred choice.”
Up until recently rail has not been a market that travel’s biggest brands have bothered with much, but this is changing rapidly
Online travel's biggest brands – including Expedia, Ctrip, Airbnb, and TripAdvisor – have taken a look at the numbers and moved into the space. Up until recently rail has not been a market they’ve bothered with much, but this is changing rapidly with some forecasters suggesting that nearly half of bookings will be online by 2020.
Expedia did the deal with SilverRail because in its view “rail’s shift online is one of the fastest growing areas of innovation in the $1.3 trillion travel market.”
This view is borne out by an EU report on railway competition, Eurobarometer, which found that rather than having to buy tickets at stations, “65% of Europeans would like more ways of buying tickets – eg. online, via smartphones or on board.”
Making it easier is SilverRail’s latest platform, Silvercore, which enables “all rail content to be displayed consistently, regardless of rail carrier or global market, keeping the user experience simple and efficient.” Historically, rail operators thought locally not internationally, making the booking process a fragmented and laborious one.
Moves in the last few months, showing the way the rail travel market is going, range from Accor Hotels’ purchase of 50% of the company behind the iconic Orient Express brand to Expedia’s acquisition of SilverRail Technologies. Germany’s Deutsche Bahn (which moved into UK rail buying Arriva in 2010) has made an alliance on ticket sales with most of Central Europe’s rail operators. Rome2Rio, the multi-modal travel specialist, has added rail booking to its coverage for a range of countries, including France, Germany, Canada and Sweden: Japanese high-speed rail comes next.
Rail's appeal grows on the back of a number of trends, namely connectivity, ease and price
Rod Cuthbert, Executive Chairman, Rome2rio
“Rail's appeal grows on the back of a number of trends, namely connectivity, ease and price,” says Rod Cuthbert, executive chairman of Rome2rio. “In Europe particularly there are many desirable destinations that are not served by international airports, and if they were, we all know how increased security procedures have added to the overall time in airport.
Rail companies are also increasingly aware of the need for connectivity during travel with moves from large operators such as Amtrak to improve their service.”
On the scope for rail’s potential as a partner for hotel groups he comments: “With the recent modernisation of ticket sales and the shift in the ownership across the rail sector further consolidation of services could be a great thing for customers. It seems natural to be presented with an opportunity to book your hotel as you purchase your ticket, especially on apps and mobile web.”
And he says, speaking from long experience of negotiating partnerships for Rome2Rio, across the whole of the travel spectrum, including with hotels: “Partnering with hotels providers does not need to be complicated to be effective!”
Join us for EyeforTravel Europe 2018 where senior executives from Trainline, SilverRail and EuroRail, Rome2Rio will be speaking