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Expected Revenue and Passenger Choices Jernbaneverket Norwegian High Speed Railway Assessment Project Contract 5: Market Analysis Subjects 2 and 3: Expected Revenue and Passenger Choices Final Report 18/02/2011 In association with /Subjects 2 and 3 Surveys Final Report_180211.docx Contract 5, Subjects 2 and 3 Expected Revenue and Passenger Choices 2 Notice This document and its contents have been prepared and are intended solely for Jernbaneverket’s information and use in relation to The Norwegian High Speed Railway Assessment Project. WS Atkins International Ltd assumes no responsibility to any other party in respect of or arising out of or in connection with this document and/or its contents. Document History DOCUMENT REF: Subjects 2 and 3 Surveys Final JOB NUMBER: 5096833 Report_180211.docx Revision Purpose Description Originated Checked Reviewed Authorised Date 3 Final JA/PB JM MH/CR WL 18/02/11 2 Draft Final PB JM MH JD 02/02/11 1 Skeleton of final report MH LMG PB MH 29/10/10 5096833/Subjects 2 and 3 Surveys Final Report_180211.docx Contract 5, Subjects 2 and 3 Expected Revenue and Passenger Choices 3 Contract 5: Market Analysis Subjects 2 and 3: Expected Revenue and Passenger Choices Final Report 5096833/Subjects 2 and 3 Surveys Final Report_180211.docx Contract 5, Subjects 2 and 3 Expected Revenue and Passenger Choices 4 Table of contents Executive Summary 6 Background 6 Collecting new evidence to support the market analysis 6 Emerging findings 7 1 Introduction 16 1.1 Background 16 1.2 Overall Context of the Market Analysis Contract 17 1.3 Purpose of specific report 17 1.4 Organisation of report 18 2 Background and Study Objectives 19 2.1 Introduction 19 2.2 Demand and Revenue Forecasting (Subjects 2 and 3) 21 3 Survey Approach and Development 23 3.1 Introduction 23 3.2 Overall Approach 23 3.3 Development of Stated Preference Exercises 24 3.4 Pilot Survey 34 4 Survey Outputs and Analysis 36 4.1 Introduction 36 4.2 Results of Full Survey 36 4.3 Modelling of Mode Choice and Class Choice 38 4.4 Qualitative Aspects of High Speed Rail 54 4.5 Comparison with Other High Speed Rail Mode Choice Models 63 4.6 Trip generation effects 64 5 Conclusions 66 5.1 Introduction 66 5.2 Recommended mode choice models 66 5.3 Demonstration of mode choice effects 69 5.4 Recommendations for further analysis 74 Appendix A – Pilot Survey Report Appendix B – Survey Questions List of Tables Table 3.1: Attribute levels for pilot mode choice experiment (air users) 28 Table 3.2: Attribute levels for pilot mode choice experiment (train users) 29 Table 3.3: Attribute levels for pilot mode choice experiment (bus users) 30 Table 3.4: Attribute levels for pilot mode choice experiment (car users) 31 Table 3.5: Attribute levels for in-train service experiment 32 Table 4.1: Survey response rates 36 5096833/Subjects 2 and 3 Surveys Final Report_180211.docx Contract 5, Subjects 2 and 3 Expected Revenue and Passenger Choices 5 Table 4.2: Sample distribution by mode and purpose 37 Table 4.3: Sample distribution by origin and destination for long distance trips 37 Table 4.4: Sample distribution by trip length 38 Table 4.5: Interpretation of model fit statistics 42 Table 4.6: Choice model jointly estimated on data from SP1 and SP2 (work purposes) 43 Table 4.7: Choice model jointly estimated on data from SP1 and SP2 (non-work purposes) 46 Table 4.8: Values of time per hour for long-distance private travel in Norway, NOK (2009) 50 Table 4.9: Average values of time per hour from current study, NOK (2010) 50 Table 5.1: Mode choice model for implementation (work purposes) 68 Table 5.2: Mode choice model for implementation (non-work purposes) 69 Table 5.3: Mode Choice Effects (Oslo-Bergen) 70 Table 5.4: Mode Choice % Effects (Oslo-Bergen) 70 List of Figures Figure 2.1: Corridors and Scenarios 20 Figure 3.1: Introduction to HSR alternative presented prior to SP mode choice experiment 26 Figure 3.2: Seat size and spacing descriptions used in the in-train service experiment 32 Figure 4.1: Demographics of sample 38 Figure 4.2: Structure for pooling of SP data in model estimation 40 Figure 4.3: Values of time (NOK per hour) by income group and according to whether the employer paid for the trip (work purposes) 49 Figure 4.4: Values of time (NOK per hour) by income group (non-work purposes) 49 Figure 4.5: Willingness to pay (NOK per return ticket) for improved in-train services (work purposes) 52 Figure 4.6: Willingness to pay (NOK per return ticket) for improved in-train services (non-work purposes) 53 Figure 4.7: Impact of factors on attractiveness of current mode (existing car users) 54 Figure 4.8: Impact of factors on attractiveness of current mode (existing air users) 55 Figure 4.9: Impact of factors on attractiveness of current mode (existing train users) 56 Figure 4.10: Impact of factors on attractiveness of current mode (existing bus users) 57 Figure 4.11: Impact of factors on likelihood of using HSR (existing car users) 58 Figure 4.12: Impact of factors on likelihood of using HSR (existing air users) 59 Figure 4.13: Impact of factors on likelihood of using HSR (existing train users) 60 Figure 4.14: Impact of factors on likelihood of using HSR (existing bus users) 61 Figure 4.15: Impact of tunnels on likelihood of using HSR 62 Figure 4.16: Concerns regarding tunnels 63 Figure 5.1: Implied tree structure for work model 67 Figure 5.2: Oslo-Bergen: HSR Fare against Revenue (2024) 71 Figure 5.3: Rail-Air Market Share (Nelldal-Troche, 2001) 72 Figure 5.4: Rail-Air Market Share (Steer Davies Gleave, 2006) 73 5096833/Subjects 2 and 3 Surveys Final Report_180211.docx Contract 5, Subjects 2 and 3 Expected Revenue and Passenger Choices 6 Executive Summary Background Jernbaneverket has been mandated by the Norwegian Ministry of Transport and Communications to assess the issue of High Speed Rail (HSR) lines in Norway. There is a National Transport Plan covering the period from 2010-2019 which includes relatively minor enhancements to the railway network. The ministry wishes to understand if going beyond this and implementing a step change in rail service provision in the form of higher speed concepts could “contribute to obtaining socio-economically efficient and sustainable solutions for a future transport system with increased transport capacity, improved passability and accessibility”. The objective of the Phase 2 study is to identify a common basis to be used to assess a range of possible interventions on the main rail corridors in Norway, including links to Sweden. Within this overall remit, the objectives of the two Subjects of the Market Analysis Contract covered by this report were: • to determine the willingness to pay (WTP) of travellers by high-speed rail services, given that this mode represents a new product on the Norwegian transport market; and • to gain a quantitative understanding of the aspects of the service that motivate travellers’ choice of mode between high-speed rail and other modes of transport: air, car, bus and ferry. A bespoke survey has therefore been designed, undertaken and analysed for this study which has provided parameters for the demand model system developed in Subject 1 (Demand potential for high speed rail in Norway), which is then used to forecast fare revenues for HSR. Collecting new evidence to support the market analysis The introduction of HSR in Norway would bring a completely new travel alternative for travellers and as such it would not be reasonable to predict demand for this new alternative using existing models. Not only would HSR bring levels of service – journey time, comfort, fares, access characteristics – that are unknown in Norway at present, it would represent an entirely new concept in the market. For this reason evidence on likely demand, and willingness to pay, needs to be collected from stated preference (SP) experiments, which allow the collection of evidence on how travellers consider an alternative which does not exist in the travel market with which they are familiar. For this study, respondents who were making journeys that were plausible candidates for transfer to HSR were interviewed and asked to participate in a stated preference choice experiment. Within the survey the respondent was asked to focus on a recent long distance trip. They were then asked to participate in two SP experiments. The first experiment offered the choice between HSR and the mode that the respondent was observed to use, while the second offered choices between different configurations of the HSR service, posed as a class choice experiment, giving more detailed insight into preferences for aspects of the HSR service. The mode choice experiment was specified with three choice alternatives. The respondent could decide to remain with their existing mode, switch to high speed rail, or if neither of these were acceptable could indicate that they would choose not to make the trip under the scenario described. The attributes which were varied in the mode choice experiment included: travel time (described by access time, waiting time, in-vehicle time and egress time), service frequency, the number of interchanges and the cost of the journey. Respondents were also offered HSR options in which the amount of time with views and amount of time in tunnels differed. The second stated preference experiment was designed to provide willingness-to-pay estimates for the in-train service components, and as such was set up in the context of a choice of travel class.
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