Under CONTROL

The complexity of fares and inconsistent product makes managing rail travel spend a challenge, writes Gill Upton, but that needn’t stop you getting it under control

Unsexy', 'unglamorous', 'less opportunity', and 'too complex' typify the comments on managing rail travel spend. Travel managers quite rightly focus their time on the big-spend items of air and hotel where cost savings are more easily achieved.

Rail is a less competitive sector with less creative savings opportunities which largely involve getting to grips with the more complex area of culture and behaviour change, which is a much more resource-heavy undertaking.

“It takes hours of effort so it falls down the pecking order,” says Raj Sachdave of Black

Box Partnerships. Nonetheless, he says that companies can achieve 30% savings with very little effort.

TMCS have not helped as, historically, it’s not been an area of interest for them. The more lucrative 11% commission from a hotel booking compared with just 3% from a rail booking explains much of the indifference.

Defending TMCS is Johan Persson, Director of Account Management UK & Ireland at American Express GBT, who blames the complexity of the rail industry. “The industry has made it harder for clients and TMCS to work with rail than with other modes, in a number of key ways,” he says.

“Rail sells non-standardised products, in the UK and elsewhere in Europe. There’s not much market insight into the business traveller when it comes to booking. There’s a lack of consistency in rail, which makes it difficult to manage. And supply chain leverage is nonexistent, because there’s little competition.“

Certainly, the 55 million fares in the system don’t help as it creates a minefield for anyone trying to buy smart. “We’re dealing with old systems that dictate how fares can be applied so there is limited space for creativity,” says Marina Grave of the Rail Delivery Group.

But change is in the air from the increasing focus on sustainability and traveller wellbeing, forcing corporates to look closely at potential modal shifts from planes and cars to rail, switching to rail for Manchester to Glasgow for example. One corporate is known to have mandated European rail travel over flying.

Few travellers fly to Paris today, and European capitals such as Madrid and Amsterdam are joining the fray.

Think again

Ticket delivery methods are easier now that there are e-tickets and tickets sent to mobile devices and LNER has a corporate loyalty scheme on the drawing board.

The fact that the average ticket price has remained stable at £56.32 in 2018 and 2019 despite a 3.3% mandated fares, increase according to Evolvi figures, shows that corporates are making headway.

But it’s not all about cost today. Rail offers better productivity and an arrival point in the city rather than a journey from an out-of-town airport to downtown. Defra figures pinpoint the carbon savings – in the region of 56% when switching from car to rail although some doubt their veracity. “There is no decent qualitative and quantitative evidence that a train is better than a flight,” says Will Hasler, speaking as part of the ITM'S Industry Affairs Group. “Defra multipliers are out of date; we need granular detail.”

Industry observers believe the tipping point of 3hrs 45 minutes has been reached and is lengthening into four hours and beyond. SNCF, for example, points to brisk business