RAIL booking technology specialist Rail Online believes the future for the sector is bright, with industry fundamentals such as huge infrastructure investments, increasing e-ticketing options and the global sustainability agenda all signalling a shift towards increasing train travel in future years.
The business, which was established 12 months ago by former Rail Plus/Rail Europe executive James Dunne, aims to reinvent the rail booking experience, in a sector which is worth a whopping US$350 billion a year. Less than 30% of that is currently booked online or in advance, with the rest of sales centred on train stations where people queue up to get a ticket.
Speaking to travelBulletin this week, Dunne said that prior to his work in rail he was involved in airlines, where everything is very standardised. “Rail was different. We have different national rail operators with all different systems and different standards and a lot of pain,” he said. Paper tickets were still used in some parts of the world, every network has different rules around lead times for ticketing, and there were limited API options to automate processes.
“I started thinking, if you want distribution like you’re used to in the airline sector, what would it look like? And that was the genesis of the business,” Dunne said. As his plans progressed, he also spent a lot of time on the road speaking to travel agents. “I love getting their feedback, they’re very frank, it’s very direct, and they kept telling me consistently several key messages: one, the pricing of rail wasn’t competitive with tickets bought directly from the rail carrier website, booking fees are quite high, and the exchange and refund processes were quite clunky. I kept hearing these messages and I thought that if you could address those issues, this business would really work”.
Rail Online sticks to its knitting – the company only sells rail products that can be electronically ticketed, with competitive pricing, and its technology platform has a strong focus on ensuring that an agent or customer can manage their own exchange or refunds themselves. On top of that, having operations in Australia and the UK, with plans for a US presence as well, will allow 24/7 “follow-the sun” support, he noted.
Part of the magic for Rail Online is its people. The complexity of rail means the insights and experience of those who know the sector are invaluable, and so Dunne recruited Kirsty Blows, also formerly from Rail Plus/Rail Europe as GM for Australia/NZ along with several other industry experts. The business received a major boost shortly after its inception when private equity firm Dale Ventures paid $2.5 million for a 20% stake. Dunne told travelBulletin the business currently has about 15 shareholders, and while he’s biding his time at the moment, a further capital raising round is potentially in the offing in the future to really help accelerate growth.
In the meantime a firm foundation has been laid, with Dunne bullish about the prospects for bookings out of Australia and New Zealand over the coming months as long-haul air capacity continues to ramp up. As more flights become available and airfares decline, even more pent-up demand for travel to Europe and North America is likely to be unleashed, he believes.
“Rail will be a major beneficiary as Australian travellers move beyond VFR travel and once again pursue bucket-list destinations across Europe and North America,” Dunne said.
While an awareness of the convenience and cost savings rail journeys offer will drive bookings, he noted there were also other factors at play. “Australian travellers are becoming increasingly aware that rail travel generates just a fraction of the carbon emissions of air travel. This is already a major issue in Europe, where more countries are expected to follow the lead of the French Government and ban short-haul flights.”
The EU’s ambitious climate change targets include plans to double high-speed rail use by 2030 and triple current levels by 2050, with over 5.4 billion euro already committed to major transport infrastructure projects. Competition barriers are being lowered, allowing national operators to operate in different countries, and the US is also pushing forward on high speed rail, particularly in the North-East corridor with the Acela Amtrak network.
Rail Online GM Kirsty Blows noted that while VFR demand since Australia’s borders opened had seen many travellers using rail networks to reconnect with friends and relatives, going forward the company was seeing very strong demand for the Eurail Global pass. Now covering 33 countries including the UK “it represents outstanding value and is ideal for Australians visiting three or more countries…not surprisingly it’s shaping up to be the most popular pass for our customers in 2023,” she said.
Other routes shaping up as strong performers include the Eurostar London-Amsterdam service – a five hour high speed trip now running five times a day, allowing Aussies visiting the UK to seamlessly connect with a European river cruise departing from the capital of the Netherlands. The upcoming Rugby World Cup is expected to see a boost in demand for point-to-point services within France, while in North America the New York-Washington-Boston route is perennially popular, with interest also in Seattle-Vancouver high speed rail connections to cruise departures from both ports.
Blows and Dunne also highlighted Lumo, a new low-cost high speed rail operator in Britain which launched last Oct, offering services between London and Edinburgh, as well as the rise of “executive class” services on Eurostar and Trenitalia’s Frecciarossa high-speed trains which have carriages incorporating meeting rooms for groups wanting to work while in transit.