Rail travel remains the poor relation to hotels and air in terms of spend management. It is equivalent to how meetings spend was viewed until not too long ago, but slowly it is playing catch-up, spurred on by the government’s aim to simplify ticket types.
The Rail Delivery Group’s (RDG) mission is to roll out ticketless technology by introducing e-tickets and m-tickets and eradicate the bulk of paper orange tickets by 2020. The target is for 70% of all tickets to be fulfilled by digital ticketing by 2020.
Few believe that deadline will be met as the train operating companies have been slow to respond. The brake on progress is the length of the franchises granted to the train operating companies; too short to allow sufficient profits to be ploughed back. Ticket barcode scanners at stations are still not widespread; getting refunds on e-tickets are still a challenge, and so on.
Currently, passengers on Virgin West Coast can create an e-ticket on Advance fare types, delivered as a PDF, while East Coast doesn’t support e-tickets but does offers m-tickets accessed through an app, but they must be activated pre-travel and it cannot be printed.
Trainline and Evolvi's booking technology has transformed rail spend management. Evolvi, for example, allows multiple sub sets of policies, good data collection and cost attribution. Bookers can compare peak and off-peak fares and see the difference in price between an open return and two single Advance tickets, which can often be cheaper.
Despite annual fares rises – 3.9% this year – the average ticket value across the Evolvi booking platform has fallen, from £59.03 in 2013 to £56.82 in 2017, and is testament to the ability to manage rail spend.
“The key to making savings is to drive compliance,” says Gary Mcleod, Managing Director at Traveleads. “Be proactive and ensure that travellers are not going off-policy or doing their own booking.”
Mcleod reckons the average saving they can demonstrate, when a client moves from unmanaged to a managed framework, is 20%. “It’s quite easily achievable,” he says.
Chris Vince, Director of Operations at Click Travel, says it can be as high as 25% by putting in guidelines. “Buyers can definitely manage rail as effectively as hotel and air as there are quick, easy wins,” he says. ”There is low-hanging fruit to go for.”
The complexity of rail fares can make spend management hard work, writes Gillian Upton, who advises on best booking practice
The next step is mandating the booking channel in order to collect data and get visibility of spend from the management reports. Savings can begin from changing behaviour and the key message is to book early to access the cheapest fares.
The optimum time to book is 14-16 days out, while travelling after 9am and after 7pm on weekdays massively cuts costs. Booking a meeting at 11am rather than 9am can easily save 50% on the fare price. “Educate travellers to look at the fares before they arrange the meeting,” says Mcleod. “Clients don’t mind if you shift a meeting back by an hour to save money.”
Robust communication is key and clients can create prompts on the log-in screens to book early. The one ticket type to avoid is an open return ticket. “Some 80-85% of journeys happen as booked so there is no need to book an open return ticket,” says Mcleod.
The on-the-day Advance tickets, introduced by Cross Country and Virgin, can accrue savings but their availability is limited. There are still a handful of train operating companies who do not offer them, namely Arriva Trains Wales, South West Trains, Southern, Southeastern, Scotrail and GWR.
By far and away the cheapest rail tickets to buy are the Advance tickets where the exact time and date of travel are stipulated. Lone Konradsen, Head of Consulting Services at Capita Travel and Events, says: “Booking a specific train could save you 44% on the cost of a full anytime single.”
Tactical tickets Meanwhile, the jury’s out on split ticketing where a traveller divides their journey into a number of separate tickets. For example, on a London Kings Cross to Leeds journey it could entail buying one leg between London to Doncaster and another between Doncaster and Leeds. More well-known is the Didcot Dodge on West country journeys such as London-bristol. Split ticketing savings can be in the range of 15-20%. “I’d question the value of it,” says Mcleod. “The savings are not massive and the time spent doing it is not necessarily worthwhile. Plus, you have to move halfway through the journey and you’re not guaranteed to get the same seat.”
Imelda Aspinall, UK Travel Manager & Group Coordinator at MBDA, says it’s difficult to include split ticketing options on a booking platform so has parked the idea for now. “A few bookers are savvy and book them but they do have to invest time in doing it,” she says. Moreover, the train operators are busy eradicating these loopholes.
First class thinking The jury is out over first class travel, although its appeal endures. With its extra space to work, more privacy, free teas and coffees and wifi included in the fare, this is where the multiple travel policies take hold.
There are many companies who dictate standard fares across the entire population of travellers and have a total ban on first class, but others who have one policy for 90% of the workforce and another for the remaining 10%.
But who are the 10%? Across Capita Travel and Events’ customer data as a whole, around 12% of rail tickets purchased are in first class, but once you take out
professional services and legal firms from the mix, that figure drops down to 2%. “It’s generally revenue-generating employees using first class, and not always necessarily the top earners,” says Konradsen.
First class is undeniably a good product and the case for improved productivity is strong, says Click's Chris Vince. “Advance first class tickets are often the cheapest option if you look at total travel cost and add up the cost of the coffee, bacon roll and wifi. We recommend a tolerance level in the policy – an extra £10 might let them upgrade and be more productive.”
Travellers at MBDA, for example, are permitted to purchase Advance first class tickets if they are cheaper than standard tickets on the day of travel.
Some companies are utilising data analytics to find the ROI of first class over standard class. If a traveller is able to work one more hour in first than in standard class on London-manchester, for example, then “you don’t have to be earning much more before that ticket is paid for,” says CWT’S Harman.
Doing a deal Aside from educating travellers on ticket types and the times of meetings, buyers can approach the operators to negotiate soft benefits. Success will depend entirely on your volume of spend. It’s worthwhile approaching them if your rail spend is over £100,000 a year. It will also depend on your routes: those with more competition, such as Birmingham-london where there are three train operating companies, are more likely to negotiate.
Capita suggests trying for a deal on those routes where there is modal competition between air and rail. Some TOCS will offer a deal to the TMC as a reward, or to Evolvi, rather than on a per client basis.
“My message would be, if you have a reasonable amount of spend with a train operator then approach them and ask,” says Melanie Glass, Head of Client Services at Evolvi. Adds HRG'S Ian Windsor: “If you don’t ask, you don’t get. London-manchester is a really busy route so there is no reason to give anything away, but on London-scotland there is more scope.”
Another strategy is to take advantage of emerging technology such as price tracking, advises CWT’S Harman: “Firms like Yapta are well established and work with businesses and TMCS to find savings through automatically tracking flight and hotel prices but there’s also similar technology for rail.
“Trainline now offers a price prediction tool allowing business travellers to track the price of Advance tickets through its app,” she says.
Putting it into practice One travel manager trying to take all this good practice on board is Imelda Aspinall at MBDA. Having tackled air and accommodation over the last three and a half years she is now turning her attention to rail. Aware that the company loses out on MI as there is no mandate to use their TMC for rail bookings, the first change will be the implementation of an online booking tool later this year and to mandate its use.
MBDA'S employees travel between four UK offices in Stevenage, Bristol, Bolton and London as well as bases in France, Italy, Germany and Spain on a regular basis.
“Car hire is our major competitor to rail as our major sites are out of the way so we use an Avis implant,” says Aspinall. “We know we spent £1.4million on rail last year through the TMC but we also know that’s
only a fraction of the total.”
Having had the freedom to book what they want to date, her plan is to get the 100 or so travel bookers on-side and she has already created a focus group of top users to start the process of change.
“The question ‘What’s in it for me?’ will always be the main issue but once I have strong MI I'll start looking at negotiating soft benefits and those will be the rewards. But first, TOCS want to know what volumes can be shifted,” explains Aspinall. Both e-tickets and m-tickets will be requirements once the booking tool is implemented too.
“Rail is a difficult nut to crack,” she says. “There are so many ticket types and it’s still very confusing. I think booking tools struggle sometimes in presenting rail as there are so many algorithms to go for but I know that there are better solutions out there.”