TRAIN TRAVEL DISTRIBUTION "The next wave"
Rail Europe 4A Enjoy Europe Travel by Train! 1
I – Train Travel ‘101’
II – RE4A overview
III – Rail / Air comparison
IV– Distribution key success factors
2
I – Train Travel ‘101’
II – RE4A overview
III – Rail / Air comparison
IV– Distribution key success factors
3 I Train travel ‘101’
Key Rail figures
4 I Train travel ‘101’
Km’s of high speed line in operation in 2011
5 I Train travel ‘101’
Why is train travel so interesting?
High speed rail network is booming in Europe and all over the world
Market studies show that for trips below 5 hours, train travel dominates air travel
Trains offers more comfort and freedom of movement for business and leisure customers including wifi on some service, reduced waiting and travel times, at seat catering options, quiet areas & kid zones to name just few..
Train goes from city centre to city centre, avoiding traveling to/from airports
Train travel is more eco-friendly
6
I Train travel ‘101’
Perception of rail travel by customers
7 I Train Travel ‘101’
Evolution of European Railways & Distribution:
European Railways in existence since 19th century All operating independent legacy systems 20th century resulting on more traffic across Europe both domestically and internationally Opportunity for railways to evolve more sophisticated distribution platform Internationalisation of distribution arrived with SNCF(French Railways) and SBB (Swiss Railways) engineer new distribution system called Euronet offering real time booking options 1 stop shop for all rail sales across Europe Euronet plugs into all European carriers systems providing a genuine ‘European’ offering to both domestic & international markets 1995 SNCF in conjunction with SBB launch RE4A 4A’s stand for continents of Asia, Africa, Americas and Australasia RE4A premier rail distributor for all European Carriers globally
8
I – Train Travel ‘101’
II – RE4A Overview
III – Rail / Air comparison
IV– Distribution key success factors
9 II RE4A overview
ID card:
Date of birth: 30th of June, 1995 Shareholders: 50% SNCF (French Railways) / 50% CFF (Swiss Railways) – Staff worldwide: 86 Territories/markets : 4A’s of Asia, Australasia, Africa & Americas 140+ sales agents in 50+ countries 36 consumer websites Products: European Passes & Point to Point tickets including seat reservations + non European Rail (Amtrak [USA], JR [Japan], Korail [Korea], ViaRail & Rocky Mountaineer [Canada], GSR [Australia])
10 II RE4A overview
The General Sales Agents (GSA’s) are the heart of the RE4A activity:
Experts in the sale of train ticket in each of their markets
Professional and trained to use ‘Euronet’ – the worldwide train reservations platform (Training both face to face in Paris & Online and through Educational tours throughout Europe…)
GSAs are customer-oriented and are experts in their markets
RE4A distribution can rely on strong partnerships with renowned travel agencies: Flight Centre Rail Plus JTG THOMAS COOK H.I.S TUI MIKI CARLSON WAGONLIT GTA etc…
11 II RE4A overview
A wide product range: 1. European products: Train tickets: TGV (France), Eurostar (UK-France/Belgium), Lyria (France- Switzerland), Thalys (France/Belgium/Netherlands/Germany), Elipsos (France-Spain), Trenitalia (Italy), Deutsche Bahn (Germany), Renfe (Spain), SBB (Switzerland), ATOC (UK), SJ (Sweden) and more Rail Passes: • Eurail Passes and reservations (only for non Europeans) • "National" Passes: Swiss Pass, France Rail Pass, German Rail Pass… • Others such as "Swiss Packages", combination tours etc.
2. Non European products: North America: Amtrak (USA), ViaRail & Rocky Mountaineer (Canada) Asia: Japan Rail, Korail, Rail Australia, IRCTC (Indian Luxury Trains)
3. Direct connections in Europe for larger ranges and lower fares: SNCF (France) - including Eurostar, Thalys, TGV Lyria etc.… ATOC (UK) RENFE (Spain) Imminent: DB (Germany), and NTV and Trenitalia (Italy)
12 II RE4A overview
A powerful distribution system:
Sales Shops Portals Public websites GDS Channels Call Centres Trade websites Mobile Apps
Distribution Channels Euronet Desktop Application Euronet Web Services Rail Booking Engine
Product Access / Commission / x-rate management
EURONET
Business logics / Real Time connections / BI & Reporting
Carriers' Inventories
13 II RE4A overview
Key figures - 2010: 2012 (Est.):
Sales Volume: 136.9M€ 200.1M€
Pax: 1720 000 2 628 000
Booking: 367 000 550 000
Net result: 4M€ 6M€ after tax
Year B2B v B2C
2007: 95% v 5% 2009: 85% v 15% 2011: 80% v 20% 2012: 75% v 25%
14
I – Train Travel ‘101’
II – RE4A overview
III – Rail / Air comparison
IV– Rail distribution & key success factors
15 III Rail / Air comparison
Worlds apart...
• Train travel is 90% or more for domestic use
• Train operation and distribution do not follow a common • Air travel is quite international standard
• Air travel and distribution are very standardized • Train travel is mainly operated by national carriers with very limited competition • There are lots private players and competition is important on most routes • There is no full carrier alliance making multi carrier trips complex • Airline alliances/code shares/interlines ease RAIL management of complex itineraries • Average ticket price is low (below 100€) AIR • Average ticket price is high for international routes
Average of 111,000 train per day in Europe Average of 26,000 flights per day in Europe *Air estimates eurocontrol Feb 2011 *rail estimates rail carrier websites
16 III Rail / Air comparison
Structural differences Why rail is not fully integrated on GDS Rail distribution is not standardized and relies on very specific systems GDS solutions have been developed only for train carrier domestic market Product offer is very heterogeneous through custom-made/expert and difficult to master connection
Low average coupon price is a The lack of standards: challenge for profitability makes the development costly and specific for each carrier
requires important product and Domestic focus of operators leaves process support little room for international distribution specificities Train carriers (except limited number) are not IATA compliant (carrier code, Agreement/connections with several accounting code, BSP enrolled etc…) carriers required to offer sufficient destination coverage
17
I – Train Travel ‘101’
II – RE4A overview
III – Rail / Air comparison
IV– Rail distribution & key success factors
18 IV Rail distribution & key success factors
GSA
Web services Euronet Desktop White Label GDS Rail Booking Engine 21 GSAs 1400+ accounts 15 partners 949 travel agencies 17 GSAs 35 B2C websites
More than 90K travel agents connected IV Rail Distribution & key success factors Euronet desktop
► Solution for call centre's, shops or specialty desks
► Advanced functionalities available + administrative / accounting access
► Easy deployment but important training required
► Tool for GSA’s and selected sub-agents
Represents 25% of sales in total but decreasing
IV Rail Distribution & key success factors White Label
► Online B2C solution for non merchant partners
► White label of RE4A B2C sites with basic customisation
► Easy deployment and integration
► Tool for marketing partners with strong brand but no focus on rail sales
Represents less than 2.5% of sales in total but expect growth over the next 5 years
IV Rail Distribution & key success factors GDS
► Travel agencies with small rail revenue
► Smart tab integration on Amadeus/Travelport selling platform
► Easy deployment
Represents less than 2.5% of total sales but can expect this sales channel to grow in the next 5 years
IV Rail Distribution & key success factors Web Services
► Solution for big players with important IT capacity/priority
► Advanced functions available, high level of customisation
► Medium to complex deployment (2 to 6 months) and regular maintenance activities by IT staff (1 version upgrade per year)
► Minimum 1 M€ online rail sales a year
Represents 40% of total sales
IV Rail Distribution & key success factors Rail Engine
► Solution for mid sized company with limited IT capacity
► Main booking functions with basic level of customization
► Easy deployment (2 weeks to 1 month) and low maintenance
►Minimum 100 k€ online rail sales a year
Represents 10% of total sales IV Rail Distribution & key success factors
Online Solution for Consumers
B2C (consumer) websites
Every RE4A market is covered by a consumer Website and social media tools including local face book pages, blogs, twitter accounts etc
Fully market oriented websites: Local selling currency Local language Local fulfillment • Fulfillment by GSAs or, • Directly fulfilled by RE4A representative offices
Represents 25% of total sales
25 IV Rail distribution & key success factors
4 key success factors for distribution
• Touch the biggest customer base by supporting all Multi channel sales channel possible
solution • B2B and B2C/ Offline and Online
• Reach critical size to absorb fix marketing and IT costs Low cost • Keep an agile and low cost organization
• One stop shop for rail product Multi rail content • Manage Europe as a global destination
• Invest in education/training of point of sales to create real expertise Be a real expert • Simplify product ranges
26 IV Rail distribution & key success factors
And the solution is Multi-channel global rail one stop shop
Call centre/TA Multi channel Web B2C solution Web B2B/white label GDS/WS/Rail Engine
Dedicated/ specialised rail systems • One stop shop for rail product Integrated IT from point of sales to Low Cost back office and settlement • Manage Europe as a global destination Agile organization
•Reach criticalMultiple size to absorb direct connectionsfix marketing and IT cost Top 5 European content (SNCF, Multi rail content ATOC, RENFE, DB, TI + others) •Keep an agile andNorth low America cost organization and Asia
Specialised product team • Invest in education/training of point of sales to create Globalreal expertise training and helpdesk facilities Be a real expert Local marketing and sales offices • abstract product heterogeneity
27
What is the future of Rail Distribution 10 years from now???
28 Thank you….
Questions????
29 II RE4A overview
9 representative offices covering RE4A territories and supporting a wide B2B distribution network (150+ sales agents):
Representation offices (and opening date) • Tokyo (1998) • Sydney (2007) • Seoul (2005) • Hong-Kong (2008) • Mumbai (2005) • Bangkok (2009) , Singapore • Buenos Aires (2006) • Dubai (2010) • Singapore (2012)
30