Phocuswright estimates global travel gross bookings will reach nearly $1.5 trillion this year and more than $1.6 trillion by 2021.
While the majority of that spending is made on air and accommodations, ground transportation is accelerating as a category for activity, innovation and investment.
With so much noise from aviation when it comes to distribution, as well as huge developments in other forms of ground transportation in the past five years, rail can often be overlooked.
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Such treatment is unfair when you think of the many projects being worked on by, and between, rail operators as well as with third-party technology players and multimodal startups.
While train journeys conjure up a certain romance for many, travelers also have high expectations of being able to plan and book via digital channels, to turn up and board seamlessly and to receive all the necessary information should something go wrong.
In short, the sector has been just as impacted in recent years by changes in consumer behavior and the drive for digitalization as any other travel sector.
But, rail also has its share of challenges - commercial, technological, political - to overcome.
Laying the track
To further complicate an already-complex landscape, since liberalization began to gain momentum with the EU directive in 2012 (some countries had acted before that), many countries are having to deal with a mix of state-owned operators and privately run organizations, each with their priorities.
The EU’s Fourth Railway Package legislation to open up access to rail tracks to new passenger operators in 2020 is also being viewed as a positive step in improving the consumer rail experience in each country.
Cameron Jones, chief commercial officer for SilverRail Technologies, says that wherever liberalization has happened, prices have come down, and with investment in product, the overall experience has improved.
With the foundation of liberalization as well as the Full Service Model initiative, launched in 2013 to drive open technology development for distribution, rail operators have begun to collaborate more.
Rail carriers have been shackled to very old technologies, which limits their ability to have product in high web-scale type channels such as Google and Skyscanner.
Cameron Jones - SilverRail
Amadeus head of rail Mirja Sickel says the distribution company is working on a number of initiatives at the European level.
Alongside rail operators and other technology players, Amadeus is involved in developing the TAP-TSI initiative around standards for rail distribution via the European Railway Agency, as well as in developing the European Technology & Travel Services Association initiative around the data consumers have access to.
The company has also been working with German rail operator Deutsche Bahn to offer third-party rail content on its website and other digital channels.
Sickel says that two or three years ago, this kind of collaboration would have been impossible, but companies that were maybe a bit “monopolistic” and “protective” in the past have been driven to open up by consumer behavior and new entrants coming in to the market.
There is also growing interest around sustainable travel, particularly among younger generations.
Recent research from Trainline shows a quarter of those aged 16-24 would drive less to be more sustainable while half of respondents say they are becoming more aware of the impact of their actions on the environment.
In Sweden, and other northern European countries, there is even a shame attached to flying and the resulting carbon emissions termed “flygskam.”
These factors, combined with the friction around air travel and the potential to be more productive on a train journey, help rail to stand out as an attractive option.
A potential further impetus to change is the move by some of China’s online travel giants into rail. Ctrip launched its TrainPal app in the U.K. in September 2018 with an ambitious vision of creating a single access point for global rail bookings.
These players are not likely to wait around for existing services to be ready; they will go ahead and buy or build what they need to achieve their vision.
Minding the gaps
The emergence of the multimodal trend and the idea of mobility as a service (MAAS) also throws rail into the spotlight.
The EU named 2018 as the "Year of Multimodality” to raise its importance as part of the continent’s transport system, as well as to support the drive for more environmentally friendly ways of getting around.
In some ways it might feel like a double whammy for rail operators who now need to be thinking about how they can work with and integrate other rail content as well as additional transport modes.
Sweden can again be held up as one of the star pupils here, as it has already started solving the “last mile” by integrating commuter transport with taxi services.
More recently, mobility tech startup Trafi announced a partnership with BVG, Berlin’s public transport company, to connect mobility providers in the city.
Starting this summer, the mobility service, called Jelbi, will enable consumers to use different transport modes “seamlessly” via a mobile application.
Jones says: “Rail is still at the heart of MAAS. The interesting piece is: How do we get information and coordination between players to be easily exchangeable to make the journey seamless?”
He adds that more sharing of data between suppliers will lead to a much better understanding of demand and therefore a more effective use of services.
There are other pockets of development across Europe, such as carpooling platform BlaBlaCar’s development of an intermodal transport platform with French rail operator SNCF.
BlaBlaCar is already working to combine buses into its application but announced the plan to work with SNCF late last year.
And, there are many other well-funded startups and companies working to combine services so that consumers in built-up and remote areas have easy access to transport options.
Executive Roundtable: At the Speed of Rail
Trainline, SilverRail, Deutsche Bahn and OUI.sncf discuss rail distribution at Phocuswright Europe 2019.
The next station
The required next steps of further collaboration and more openness around data are also the challenges for the rail industry.
There is a general optimism in the industry currently and a feeling of where there’s a will, there’s a way.
Sickel agrees that further collaboration is needed but there is great opportunity for rail providers who take advantage of the technology available and continue to “put the customer at the center."
Her views are supported by Jones, who adds that rail providers also need to address the issue of legacy technology.
“Rail carriers have been shackled to very old technologies, which limits their ability to have product in high web-scale type channels such as Google and Skyscanner," he says.
He feels large investment is needed in this area as consumers change how they research and book travel and expect information in sub-second timeframes.
While progress might seem slow, the ongoing collaboration on initiatives such as FSM as well as the pockets of development and innovation in different countries are all contributing to a growing momentum.
Sickel is hopeful of “significant change” in the next two years and says there are projects that will come to fruition in that time frame.
But, it’s important to remember that it’s an evolving process and a continuing drive to improve the passenger experience.